With the onset of this century, it was widely acknowledged that the 21st century would also, be the American century although China was an extraordinarily emerging economy. But the momentous growth China exhibited both in the economic and technological domain within the first decade of this century and assuming the place of second-largest economy surpassing Japan in 2010 analysts started apprehending China as the next challenge to American hegemony at the international level. China’s embarking upon BRI in 2015, the world’s largest economic project encompassing more than 100 countries, the politico-economic analysts are not short of throwing a shadow on the American position of enjoying the status of the sole superpower of this century. They are now vividly exclaiming that the present century was an American century before 2015. Now it has started losing in favor of both China and Russia.
Rising Chinese Influence
Going a little bit into history we can say that the base of present China was laid down by Den Xiaoping in 1978 when introduced market reforms that started attracting transnational corporations (TNCs) from all over the developed world into China making it the largest exporter of the world at the moment. There is no blinking the fact that power moves through the economic corridors. It was true for Great Britain during the colonial era, it is true for the USA at the moment and it appears to be gaining weight in the years ahead in favor of China. The relative decline has started for the USA in favor of China though still the former enjoys both economically and militarily a formidable position at the international level.
Fall Of The Soviet Union
The dismemberment of the Soviet Union, the abolishment of the Warsaw Pact, and the fall of the Berlin wall in 1989-90 were the climax of the USA. NATO started expanding towards the East making Russia squeeze. The fall of Baghdad in 2003, and before that capture of Afghanistan in 2001 also put a stamp on the American century. It was said at that time that the post-cold war era is the American century era. However, the notable politician also hinted at the emerging multipolar world in one way or the other. For instance, in 1990 Margret Thatcher said that the world was divided into three political spheres, dominated by the dollar, yen, and the Deutsche mark. Likewise, Henry Kissinger, in 1994, his book ‘diplomacy’ predicted the dawn of a new multipolar
age.
Post-1990 Multipolarity
Multi-polarity was visualized in 1990 but not in the sense that China would be posing any challenge to the United States. Even in 2001 when the United States entered Afghanistan it was supported by its European allies i.e. UK, France, and even Russia and China. But things changed when the United States invaded Iraq in 2003. It lost the support of France, Russia, and China. Hence Iraq was the turning point. Chinese spectacular economic rise by 2010 happened to be a tectonic shift. Russia under Putin stabilized to the extent that when the Western powers managed to change the pro-Russian regime in Ukraine in 2014 Russia managed to annex Crimea and started a movement for autonomy in Russian-speaking Eastern Ukraine adjacent to Russia. By 2019 Russia gained confidence to the extent that it went for an aggressive posture in protecting Bashar's regime in Syria in absolute defiance of the United States’ policy in Syria. This all speaks about the ending of the uni-polarity of the United States. The same political reality was also witnessed during American elections in the form of a slogan like, ‘let us make America great again’. Under the circumstances, the great pressure on the Trump regime was to give a boost to the American economy. First president trump went for a parting away policy. He dissociated from Trans-Pacific Partnership (TPP) and decided to deal with the countries on a bilateral basis. He further went for the imposition of tariffs on imports from other countries notably on steel and aluminum and earned the resentment of not only China but its old allies like Canada, the EU, and WTO. This all led to a trade war with China as China retaliated in the same coin. Hence the impression that the USA is declining started to prevail. At the same time, China kept on moving on the economic front and didn’t poke its nose into changing and protecting regimes in the world. On the other hand, the NATO expansion policy of the West caused the birth of a robust economic organization that is the Shanghai Cooperation Organization (SCO) which included India also. This organization could be visualized as a countermeasure or having a great neutralizing impact against any economic sanctions imposed by the United States against any country.
Causes of US Decline:
When we look into the causes of this relative decline of the US economy and the emergence of the Chinese we see that globalization hurt the United States, as TNCs started leaving their home countries notably in the West for China hungry for cheap labor and utilities along with the attractions of huge Asian markets. China accumulated a huge cheap exportable surplus to be exported. Resultantly America along with other countries became net importers of Chinese goods with a huge negative balance of payments. This all started a trade war with China. Unemployment became a great problem for America and European countries except for Germany. In the UK this resulted in Brexit and in America, it brought Trump into power as he talked against the immigrants, particularly the Latinos. Europe except Germany has started shuttering its borders for the immigrants in response to rising xenophobic sentiments. The West now considers that the WTO in 1995 was not a good decision as they are not at present at ease in protecting their economies from the international competition especially posed by China and East Asian countries. But at that time it suited them because China and the East Asian phenomena in the present form were not there. Now the countries which led the world towards economic openness have started retreating into protectionism. Despite all this will the economic pendulum will keep on moving towards China the biggest challenge to America at the moment? It depends on the Chinese capacity to face the challenges it is going to face the ever-decreasing number of its young working force in the face of increasing old age people. These demographic challenges are not there at least in the United States.
China's One Child Policy:
China’s one-child policy as adopted in 1979 has started showing its negative impacts on its young working force. It was in this background that China ended this policy in 2015. China’s total fertility rate i.e. birth per woman which should be 2.1 has come down to around 1.5. In areas like Shanghai, it is even one. That means china’s over 65 population is going to explode shortly. According to one estimate “it may rise to 325 million from the existing 135 million by the year 2040” (Why Population will drive geopolitics- by Nicholas E Bierstadt). By 2040 India’s working-age population may exceed China and at that time china’s over 65 population would be around 24% against India’s 12%. This all is going to make Chinese labor expensive. As a matter of fact, it has started. This may lead TNCs to move toward those countries where the labor cost is not only cheap but they are closer to big consumer markets, for instance, Mexico with respect to the USA, Turkey and East European countries for the West European countries, Malaysia, and Thailand for Japan and wealthier parts of China. The shortage of young working force in China may also benefit India, Bangladesh, Vietnam, and Pakistan concerning extremely labor-intensive industries. On the other hand, the American advantage is that its fertility rate is higher than China i.e. 1.8 (against the ideal of 2.1 to keep the population intact) on account of its welcoming immigration policy. Around 50 million people immigrated to the USA from 1950 to 2015. It is at present the third most populous country after China and India. By 2040 its population may increase to 380 million from the existing 330, and it will have a higher younger population than any other rich country in the world. By 2040 it will have more births than deaths. In Japan, deaths outnumber births. That is one reason for its waning economy as it didn’t encourage immigrants like the USA.
Conclusion:
In the wake of the aforementioned inter alia its competitive edge in innovative domains, it appears that the American economy may not be waning to the extent as visualized by some analysts. It will be the most important player in the international politico-economic arena along with other emerging nations notably China and Russia.
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