The U.S. Falls, China rises

The U.S. is facing an unprecedented financial crisis. Perhaps not only it will lose its financial dominant status in the world, but it will lose its economic dynamic. China could seize the chance and replace the U.S. as the no. 1 economic power in the world.

In order to save the failing banks, the U.S. congress passed the $700 billion bailout bill. This increases its national debt to about $1 trillion making the U.S. country that with highest debt in the world. A superpower has tons of debt; many of its borrowers are underdeveloped countries. How ironic is this?

We can predict that the U.S. will go into a recession, and some corporations will go under. The wars in Afghanistan and Iraq make U.S. debt increase. The U.S. will have to pull out of those countries due to the wars’ high cost.

The U.S. is in a financial crisis. Its deficit is sky high, and from now on, it must depend on other countries. If other countries stop lending money to the U.S., it will not be able to continue with its insatiable appetite for money. What makes people anxious is that if other countries, including China, start selling the U.S. treasury bills, then the U.S. would have to pay higher interest rates, making its economic recovery take up to 10 years.

The U.S was too confident in its free market theory of loose financial regulations. It has only itself to blame for the current financial crisis. But its financial crisis spread out to the rest of the world, making the U.S. highly irresponsible as a superpower.

Now that the U.S. has made a mess in the financial market, China, as the world’s factory, has enough power to stabilize the world’s economic order. Likewise, China could replace the U.S. as the world’s leading economic superpower.

China has improved its image after the successful summer Olympics. Moreover, after its successful space flight mission in late September, it proves that China has the skills and advanced technology. More importantly, as a responsible member of the world, China has played an important role in crises. In 1997, amid the financial crisis in Asia, China saved Asia’s economy by not devaluing its currency. China has played a more important role than the U.S. when it comes to stabilizing the world’s currencies.

China has a huge population; it could have purchased most of the world’s products. China has 88 big cities, and its developments have started to move toward rural areas. Once its rural areas starting to have purchasing power, China would have the world’s no. 1 ranking in GDP.

China has also focused heavily on education, and due to its enormous population, Chinese people have work hard and study hard to get ahead. Although India’s economy has tremendous growth, it hasn’t done enough work to stabilize the country, such as education, and sooner or later, its growth will slow down.

However, if China really wants replace the U.S. as the world’s no. 1 superpower, it must reform several areas. As a result of tainted milk scandal, the world has less confidence in China.

Chinese companies selling tainted milk exposed several weaknesses, including failed business ethics, imperfect food inspections, inspections that don’t measure up with advanced nations such as the U.S. If China doesn’t solve these problems, they will occur again. At the same time, ever since the end of the Cultural Revolution, Chinese people’s moral values have changed. China needs time to reestablish its moral values.

Moreover, China has to start doing something on its corruption problems. If Its corruptions continue to occur, then the society will pay a price for it. Local towns and Beijing have different rule of laws, makes government officials hard to govern.

China should open up its financial markets on its own pace. Take the U.S. for example; deregulation has made a mess on the U.S. financial markets. And now, with the U.S. in trouble, this is historic moment for China. China must take this opportunity to strengthen its economy and its soft power. It must learn from other countries’ lessons so that it can replace the U.S. as the world’s no.1. power.