Will China Surpass the U.S.? Not So Fast

Everyone has been claiming that China’s rapid rise is going to threaten American dominance. They point out not only how the leaders of Asia, Africa, Latin America and Oceania have recently been flattering and paying their respects to Beijing but also how Hu Jintao and Wen Jiabao are met by huge crowds, who are eager to catch a glimpse of China’s leaders, in every nation they visit.

They’ve certainly got a point. American dominance, maintained for over six decades since the end of World War II, has been shaken by the Wall Street financial crisis, and it has started to decline over the last three years. To be honest, Washington has only itself to blame. Alan Greenspan, former chairman of the Federal Reserve, admitted to mistakes in his policies, and Timothy Geithner, current secretary of the treasury, is under fire from progressive senators.

Pessimists say that Americans have been living beyond their means for years, that consumption levels far exceed the gross national product, and that these habits are finally catching up with them. But others warn against jumping to conclusions by pointing out that the U.S. gross domestic product in 2008 was still three times that of Japan and four times that of China.

There are two additional, and perhaps more sensitive, reasons for America’s dominance. First, it still has the world’s strongest military, which remains unchallenged. Second, the American dollar remains the only form of global currency. As long as the printing facility in Fort Worth, Texas continues producing currency, people all over the world will continue to keep American dollars in reserve.

While America may now be slightly less optimistic about a swift economic recovery, it’s too early to predict that China will surpass the United States. Given America’s growing problems and shrinking sphere of influence, is it really possible that China could one day replace the U.S. as the world’s superpower?

The question can be approached from two angles that are entirely independent of questions of military strength. The first is social structure, and the second is political interference with the economy. China’s rapid economic development has created numerous problems, but the most serious one is wealth disparity. According to the latest statistics, the threshold for entering the ranks of China’s newly rich is $100 million RMB. How many millionaires does China have? Already 875,000!

Deng Xiaoping launched economic liberation with the slogan “a socialist market economy with Chinese characteristics.” Thirty years later, this nonsensical and contradictory theory has all but disappeared, and regardless of how the Chinese Communist Party tries to spin the facts, the truth remains that China today is simply a capitalist nation with all the inherent problems that were decried by Marx and Lenin.

But China is not only capitalist. Its power is concentrated in the hands of the nine members of the Politburo Standing Committee of the Communist Party of China, who have absolute authority over all levels of the government. After the housing markets in Shanghai and Beijing were recently over-speculated by the Wenzhou Group, prices plummeted 30 percent as a result of an order issued by the Standing Committee. China is able to appease the people and address the roots of its problems because such orders are so effective.

Taiwan neither has such a system nor could such a level of administrative efficiency ever be conceivable here. Americans have a self-deprecating joke: What’s the slowest, most wasteful and least efficient system in the world? American democracy, but the other political systems are even worse. Even though the prevailing opinion is that American dominance will be carried away by the economic recession, I think that it’s still too early to tell.