From Sandton to Shanghai

(An old symbol of China’s bygone colonial legacy nestled in the bamboo mountain retreat of Moganshan near Shanghai. Picture: Julian Hewitt)

The Chinese economy is still on track to overtake the USA economy in real GDP terms in less than 2 decades Is this the ominous decline of the American empire and rise of the new Chinese global order?

I think not. It’s a question of Empire v Economy and is often easy to get swayed by the latter as the overriding measure of global worth. Empire v Economy is really a hardware v software debate or putting it even more bluntly, it is a question of ideology v stuff.

The real issue at stake is not so much country X v country Y , but really a battle of ideologies. At a trade issue, China can command considerably sway over USA policy and decision makers and even the throngs of Wall Mart consumers directly impacted. Here China has strong elements of leverage over (for example) the USA in terms of a significant trade deficit, artificially strong currency and rising American consumer credit built up on cheap Chinese imports.

Of course, if you do favour the Economy argument, then it is worth keeping in mind the other side of the GDP debate. By the year 2030, China’s GDP capita is predicted to reach the 1990 level of Western Europe and Japan. Given China’s population size and the complexity this brings, it is close to inconceivable for China to ever lead the way on this front.

In my mind, the recent clash of interests over Tibet scratched the surface of one very interesting dimension. While China can have strong sway on a country to country basis, its power and influence over a more united West seems very adolescent in comparison. In many ways, China was at a loss how to actively engage with the West - apart from marshaling statements of support from emerging economy friends and filling page upon page of propaganda in local Chinese newspapers.

So in my view, whether or not China’s economy eclipses the USA economy in 2027 misses the point. It is all about Empire. Let us assume that the USA is an empire. There is some debate about this but a quick glance at the USA’s military presence around the world shows there is some fire behind the smoke. Before the USA it was the term of the British Empire and so on.

The reality is that both the USA and UK are really part of a broader Western Empire whose democratic, social, educational, legal, capitalistic and of course religious nature all drew strongly from Christian influences. That is to say that over the last half a millennium, while individual countries in the West have experienced rising and falling fortunes, a vast economic entity has all arisen out of shared common values.

It is important to create this broader distinction, because there is a time in the future that ideologies will come into play when people really start to analyse the nature of Chinese software that it brings to the global stage and ideological lines will be drawn not between country v country parameters but on a broader Western Empire v China context.