Donald Trump has launched a trade war with China, worried that previous administrations have unwittingly been helping Beijing to overtake the U.S. But can China afford to be the world’s next superpower?
The average Chinese, after all, is still poorer than the average Mexican. China’s greatest natural resource — its 1.4 billion-strong population — has largely finished urbanizing, is already aging and, as soon as 2023, will start to shrink. No superpower has developed in those circumstances before.
Nor has any big country escaped the so-called middle income trap — the theory that emerging economies tend to get marooned between USD10,000 and $15,000 per capita GDP — without liberalizing and developing a reliable rule of law. China, under President Xi Jinping, is doing the opposite.
Xi’s supporters say their country is different and Western economic models just don’t apply. China will be a great power, they argue, but one entirely unlike the U.S. There’s evidence to suggest China can afford to be whatever it wants: Beijing increased defense spending more than tenfold since 1990, while actually reducing the military’s share of the government’s overall budget.
Not even China knows yet what kind of superpower it will be. The answer, though, is likely to determine issues of war, peace and global economic growth for decades to come. Marc Champion, Bloomberg
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