As congress gets into the later stages of debate on whether to pass the Biden economic agenda, it is worth taking a pause and thinking about what’s at stake here.
America is the world’s dominant super power and has been for quite some time. China is now a legitimate rival due to the total size of its economy but if you look beyond that, in many respects it is still a developing country and lags developed nations in key statistics: GDP per capita, education rates, quality of its research and development, and more. But, what is undeniable is that in the last 30 years, we’ve seen one of the most impressive economic transformations in history in China. By opening up many parts of their economy to the type of liberalization and competition that made advanced economies what they are today, they have seen massive economic growth and increase in their wealth and standard of living.
Many people are now asking if China will overtake US as the dominant superpower in the world? They have many more people than US and their economic growth rates exceed anything we see in advanced nations such as US, Japan, or western Europe. Will they continue to grow at higher rates and eventually have a much larger economy and therefore more influence around the world? Will they start writing the rules for science, business, economics, etc the way US has done for a long time?
The answers to these questions are complex and I hope to examine many of these issues over the coming blog posts but one thing that we can be certain of is that it is not just what China does that will determine who will rule the 21st century. Just like any competition, like running a marathon, no matter how great your rival is, if you train harder and outwork them, you can end up on the winning side. That means that if America, who is currently in the pole position, makes better decisions than its up and coming rival, then we will continue to be the word’s dominant and most influential nation. Why does this matter? Why can’t we let China write the rules for a while? Well, because China is an authoritarian country and if their model becomes the dominant model , we will live in a very different world with less freedoms and lower quality of life. Just take a look at what they are doing in Hong Kong, South China Sea, and to the ethnic minorities in China.
This raises the stakes for the decisions that will be coming out of Washington in the next few weeks and months. What are the right decisions that will keep America on top? We will examine some of these decisions in this series.