China’s economic success has now become so clear that its relation to China’s overall position in the world has become a major topic of international discussion.

For example, the regular column of the Financial Times chief foreign affairs commentator, Gideon Rachman, was recently entitled rather sensationally “When China becomes No 1”. The recent announcement by United States Defence Secretary Robert Gates that the US would increase its military commitment in East Asia, simultaneously with running down its presence in other areas, was interpreted as “countering” China.

Much of this discussion is deliberately alarmist and intent on spreading confusion on one of the world’s most serious issues. A typical example was the ridiculous amount of publicity given in Europe and the US to a ludicrously titled book by Martin Jacques When China Rules the World – a thesis which leaves aside the rather small issue that China neither shows any evident desire to rule the world nor has the power to do so even if it wished to (China accounts for 8.6 percent of world GDP and has a military capacity which, on generous estimates, is well under half of the US!)

In the worst of this genre the previous evil caricature of China embodied in Sax Rohmer’s notorious “Doctor Fu Manchu”, seeking to dominate the world by fiendish criminal conspiracies, has been replaced by China as a “civilization state” having a basic incompatibility with the values of other cultures. The fact that Beijing held its Olympic Games under the odd slogan for such a “civilizational” onslaught of “One World, One Dream”, and that bluntly at present the cultural impact of the US is greater in China than is the cultural impact of China in the United States, does not lead to people abandoning such views – it is well known that conspiracy theories are particular impervious to facts (Elvis Presley is alive and working in MacDonald’s, aliens landed in New Mexico in 1947 etc)

Regrettably sometimes even responsible journalists appear to give in to the desire to create headlines by exaggerated theses. For example a piece by Martin Wolf, chief economics commentator of the Financial Times, rightly one of the world’s most respected journalists, appeared last year under the graphic title “Will China’s rise be peaceful?” – a headline which, with its question mark, evidently raised the issue of a war which was clearly likely to be of major dimensions as it involved China.

China’s leaders regularly rebut such theories by expressions of China’s peaceful path. But for those who believe in China’s evil intentions, whether for “civilizational” or other reasons, naturally such expressions cannot be trusted. Therefore it is worth demonstrating why from the economic angle, that is from the fundamental premise of China’s rise, China has a direct interest in peaceful development and it is only others who threaten it.

The common ground of the types of analyses noted above is that China’s rise is due to economic success. China’s 9.9 percent a year GDP growth rate, sustained for over thirty years, is indeed unprecedented. The relative weakening of the position of the US, the second trend necessary to pose Gideon Rachman’s rhetorical question of China becoming “number one”, is similarly due to its declining economic performance.

The decline in the relative economic position of the US is real. On World Bank data the US share of world GDP at market exchange rates has fallen from 38.5 percent in 1960 to 24.5 percent in 2009 – the latest year for which comprehensive statistics are available. In parity purchasing power (PPP) terms, the US share of world GDP has declined to 19.5 percent.

In economic competition the US has therefore been relatively losing. Efforts to deflect attention from this by focusing publicity on genuinely world beating individual firms, such as Apple and Google, does not alter the reality that US GDP has been shrinking as a percentage of world output while that of China, and other developing countries, has been rising.

The same pattern is shown in terms of companies. As recently as 2004 US companies accounted for 38.9 percent of the revenue of the world’s largest publicly quoted companies – the Forbes Global 2000. By 2010 that share had shrunk to 29.9 percent.

In contrast to the economy, in military terms the US maintains overwhelming dominance. The US military budget is greater than all other major countries combined.

A conclusion regarding “competitive strategy” in neo-con circles in the US from these facts is therefore simple. They seek to transfer competition from the peaceful sphere of the economy, where the US has been losing, to the military sphere. That is the logic which, most strikingly, led to the aggressive military policies of the George W Bush administration.

Even if we were to disregard the (entirely accurate) statements by China’s leaders that far more is to be gained by cooperation than by competition, it is clear that the rational “competitive strategy” of China is the exact opposite of the US. China evidently has no interest whatever in seeking confrontation in the military sphere, where it is weaker. Instead its advantage lies in peaceful competition in the economic field – where it is strong.

The only area in which China simply has no option but to build up military strength is to prevent an attack on itself – as the latter would be aimed at preventing by other means China’s economic development. Furthermore, while the US enjoys overall military superiority over China, the US has to spread its forces across the globe, whereas China’s are concentrated within its own borders. Therefore, while overall militarily China is weaker than the US it is a realistic goal for China, given that relatively soon its total GDP will equal that of the US, to ensure it would prevail in any military attack on itself.

China’s rational strategy, even from the point of view of its own interests, let alone the wider ones of humanity, is therefore to engage in peaceful economic competition while possessing the military strength to defend itself if attacked. The general interests of humanity, which in the long term coincide with those of the population of the US, require the US also to pursue a peaceful strategy of economic development. Indeed when US policy has diverted from such interests, for example in Vietnam or Iraq, fortunately eventually the sense of the US people themselves helped force withdrawal. But unfortunately, for reasons outlined above, some US neo-con circles still short sightedly believe that instead of seeking cooperation or peaceful economic competition the US should seek to transfer matters from the sphere where it is currently losing, the peaceful one of the economy, to a military one.

Any coherent analysis, therefore leads to the conclusion that the threat of non-peaceful outcomes does not come from China but from elsewhere. This, not the alarmist and irresponsible rhetoric appearing in sections of the media, is the core of the situation in Asia.

– John Ross


Updated and expanded new Chinese edition just released.


Turkish edition just published!

When China Rules the World is the first book to fully conceive of and explain the upheaval that China’s ascendance will cause and the realigned global power structure it will create.

New edition available now from:

Amazon UK
and all good booksellers.

US second edition is available now via: 

Amazon US