The economic bogeyman in America’s competitive future is China, and for those old enough to remember, the fear of China eating America’s lunch as the No. 1 economic power in the world is reminiscent of the day we once feared Japan’s rise.
That fear, popularized in the ’80s, proved short-lived. Today, there is no shortage of experts saying China’s future dominance is certain. “When China Rules the World,” a new book written by Martin Jacques and praised by Goldman Sachs’ chief economist Jim O’Neill, predicts that by 2027 China will overtake the U.S. as the world’s No. 1 economy.
Americans may have already bought into the concept. A December Pew Research Center poll showed just 27 percent of Americans believing the U.S. is the world’s No. 1 economic power, with 44 percent saying China is already there.
Well, it’s not. And no one really knows whether China will actually get there by 2027, if ever. If you go looking for it, there is ample evidence that China has enough of its own problems to prevent it from going all the way, and on the other end, it’s not entirely certain that the U.S. has to stand for it.
Retired U.S. diplomat Tom Hanson, speaking in Minneapolis recently, identified America’s fears. They have been echoed by Lawrence Summers, director of the National Economic Council. China accelerates its role as an exporter, America continues to careen on a path of reckless consumption. The U.S. increasingly relies on credit, and China holds our credit.
But wait a minute. China is dependent upon exports, but globalism and economic expansion is today trending toward a decline in global trade. China’s one-party state has a limiting effect on further development, squeezing the door to foreign investment. This comes at a time when the quality of Chinese goods frequently is called into question.
Demographics — China’s one-child policy — will result in a rapidly shrinking population at about the same time it’s supposed to become the world’s top economic power.
So our fear of China may be somewhat misplaced, unless that nervousness helps motivate us to fix our own problems.
That is, we must agree with President Obama, who said in his State of the Union address, “We need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America.”
Until now, the jobs question has been considered mostly a domestic issue rather than a worldwide competitive issue. But we should see it more in international terms. Our status as No. 1 is at stake. And in America, it’s just not good enough to be No. 2.