The Race Against Time: America vs. China

When I visited my grandparents in France last month, they continuously reminded me of how important it was for me to keep learning the Mandarin language.

In the span of just a week, I must have heard them say the following statement a hundred times: Europe is in such bad shape, you must keep up with your Chinese studies. The way things are looking, who knows, maybe you'll move to China for better job opportunities - just like your parents left France for the United States.

It struck me as amazing that my European grandparents, both about fifty years older than me, could bring themselves to tell their granddaughter to look to China for the future.

They had known the real Communist China, the Tiananmen Massacre China -- Red China. Yet, here they were encouraging me to keep studying Chinese language and history, in case the West collapses.

Indeed, from my grandparents to the media, the buzz about China's rise appears overwhelming and omnipresent, along with the United States' alleged demise.

My grandparents' view that in the next fifty years China will overtake America as the world's economic and political leader is not entirely unfounded.

With a booming economy that has annually grown between 8 to 12 percent over the last decade, China is now the second largest economy in the world.

The World Bank predicts that China will likely surpass the U.S. as the world's largest economy by 2030.

China is already the world's biggest exporter, manufacturer, oil consumer, and holder of foreign reserves with an amount valued at $2.6 trillion as of 2010.

Consider that in the last 30 years, China has been able to pull 500 million people out of poverty, according to the World Bank's China 2030 Report. That is close to half of the total population.

If we wait another 30 years and assume that the Chinese economy stays strong, the world could see close to 1 billion Chinese citizens living above the poverty line.

Just in terms of numbers, it would be difficult, naïve even, to deny Chinese resurgence and domination in the global landscape.

On the other hand, the United States has embarked on a steady decline -- politically and economically -- for the last twelve years.

Between the Iraq and Afghanistan Wars, the 2008 financial crisis, and the seemingly intractable climate of political hostility, the U.S. no longer seems like the most reliable savior for countries around the world.

Standard & Poor's downgrade of the U.S. credit rating in August of 2011 was tangible evidence of the country's demise as a powerful world leader.

The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges, read a statement put out by Standard & Poor last summer.

Today, the U.S. economy is not growing like China's, but is rather in a fragile recovery.

Americans suffer from 8.3 percent unemployment, as last reported by the U.S. Bureau of Labor Statistics, and an oppressive national debt of more than $15.6 trillion.

Although a strong economy may not necessarily translate into geo-political power, it does provide the financial foundation for nations to invest in other vestiges of power, such as its military. But with economic weakness and decline, such foundations crumble.

Indeed, at the beginning of this year, the U.S. Department of Defense called for 10 percent cuts in military spending for the next 10 years.

As the U.S. begins to focus inward to strengthen its economy and cure its national issues, it leaves room for competing foreign powers to establish their own spheres of global influence and take greater pieces of international policymaking.

China's economic strength immediately suggests it may emerge as the most likely challenger of the U.S. domination of world affairs.

But can China truly become the world's next superpower?

There is no doubt that the U.S.' global presence is still strong. International institutions such as the United Nations and the International Monetary Fund still operate basically as vehicles of American foreign policy, seeking to promote peace and prosperity through democracy.

Other indicators include the fact that reserve currencies are widely backed in U.S. dollars and that English is certainly the language of businesses around the world.

Hence, the Asian Century is not yet upon us.

Despite China's remarkable economic development, its capabilities as world leader are not so evident.

In addition to coping with a U.S.-established international order, China must face its own internal problems.

These maladies, as the Eurasia Group calls them, include heavy dependence on exports combined with a low consumption rate, a vast gap between the rich and the poor, the developed/developing country paradox, and extreme pollution problems.

The Chinese government has addressed these issues in its 12^th 5-Year-Plan, but analysts remain skeptical that the government can truly overcome these problems.

Because China's economy is largely based on low-cost labor and exports, it would require extreme restructuring of the economy for China to evolve into an high-tech powerhouse, on par with the world's top developed countries.

Not only would economic reform require that the majority of the population move above the poverty line, compensating for low consumption, it would also necessitate drastic cultural reforms, given that the Chinese are extremely averse to spending.

The rich-are-getting-richer phenomenon only aggravates the consumption problem. As wealth stays concentrated in the hands of business elites and senior government officials, consumption remains repressed, explains the Eurasia's report, China's Great Rebalancing Act.

In addition, China's foreign policy will remain ambivalent and weak as it transitions from a developing country into a developed state. As seen in such recent international crises as Libya, Syria and Iran, China will most likely refrain from spearheading any international initiatives that would jeopardize its trade and economic relations.

Finally, China's impressive economic growth has left it with an even more impressive environmental problem. Whether the Chinese government will be willing to overhaul its economy to protect the environment is extremely doubtful.

China's problems seem even more daunting than the United States' economic recovery.

Ultimately, it appears that China seizing world leadership lies in how fast the U.S. loses its global power and how fast China can overcome its internal problems - i.e., the race for which country can effectively solve its domestic issues the fastest.