Will China Displace the US As the Worlds Economic and Political Superpower

Over the past 15 years I have had the privilege of travelling to China on a regular basis and have witnessed the fantastic economic miracle that has seen the transformation of China into a modern economy.

Cities such as Shanghai and Beijing have been literally transformed in less than a generation into gleaming cities that inspire awe in those that have seen this transformation. In almost all areas of the economy China has transformed itself into an industrial powerhouse and for all intensive purposes has caught up with the west in many critical areas.

In contrast to this continued and seemingly unending economic miracle the last decade has seen the United States first battered by September 11th then a series of costly wars. On the domestic economic front a series of unending economic problems.

A decade ago the bursting of the first internet stock bubble gave us a first taste of things to come. The last near global meltdown brought about by the US housing bubble and leading to the worst recession since the great depression has shaken confidence and led to considerable speculation as to the structural decline of the US.

As this article is going to press it is august 2011 and the latest US crisis the artificial and political crisis brought about by the debate about the government debt ceiling has heightened the sense of malaise and the feeling that America is now becoming more dysfunctional both politically and economically. While a political deal has been struck there is a growing sense that things cannot continue and will likely get worse before they get better.

There is no drought that the United States is facing some troubling problems with respect to the economy. In both the short term and the long term America has many challenges that it will have to face. So far it must be said that it is not doing a particularly good job of facing these challenges and the politics of the US currently does not inspire any degree of confidence.

With respect to China similarly there have been many years of uninterrupted growth and truly outstanding successes. In this article I neither wish to dwell on the success of China nor the problems facing the United states.

If we look at the world there are of course many factors that must be considered when analysing whether the US will continue in its privileged position as both the global superpower and preeminent economy.

If we analyse the world and the strength of all countries both economically, politically and militarily there are many factors to consider.

First geographically and demographically the United states cannot be displaced from the preeminent position on the American continents. With a population of over 300 million and its large diverse economy no country in either north America, south America or central America will ever be in a position to challenge the US. Most are too small and only perhaps Brazil with roughly half the size population of the US can over the long term perhaps get close to its size economically.

So if America can never be challenged in its own backyard how about the rest of the world. Well Africa is a non issue. there is no indication that in the middle east whose countries outside of oil markets will ever challenge the US as a preeminent power in the world.Yes middle east countries can cause problems for the US however none will ever occupy superpower status and most have much smaller population bases.those with richer economies are largely based on a single commodity Oil.

With respect to Europe, almost all problems that America faces the Europeans have.Most European countries are also aging rapidly and likely to be in worse shape than the US with respect to entitlement programs. There is no reason to believe that either Britain, France or Germany the largest economies could ever challenge the US for economic or military preeminence.

Russia and the former Soviet republics are also not a challenge to the United States.Russia has based its economy largely on energy. Russia is forecast to shrink by almost a third in population over the next generation. It is highly unlikely to ever challenge the US again as a preeminent economic or military superpower.

The Japanese also are highly unlikely to ever challenge the Us again for economic preeminence considering their rapidly aging population and the host of other problems that they are currently facing.

And here there is an important lesson. In my lifetime 30 years ago the future was supposed to belong to Japan. the Us was written off as a second rate power in decline. That was just before the Japanese stock market imploded and the property market crashed. Their economy has never recovered.

Which essentially leaves China and India. both with populations of over a billion people and both growing.

India however has a long road to go before it could ever hope to catch up to the US. India is also highly diverse with hundreds of different ethnic groups. it is very unlikely that in the next century it would challenge the US as a superpower economically or militarily.

So really the future will continue to hold the US as one of the most important nations globally. Whatever short term problems the US faces it will be one of the 2 most important countries on earth.

The question will only be whether it will remain the most important country or whether it will lose that position to China.

Here again let us put this in perspective. Yes China is growing rapidly and yes it will surpass the Us in total economic output shortly. this does not mean it will become a country that is more important to the World than the United States.

The following are some advantages that the US has that China does not.

The use of english around the world as the dominant language of business and because of history will realistically never be displaced by Chinese. And make no mistake this is a very critical advantage. The cultural and historic ties that the US has with Europe means that it is unlikely to be surpassed by China in its influence in this area.

The United States has also demonstrated a large advantage in having societies around the world adopt its culture and some aspect of its values, including paradoxically in China. The same cannot be said for the Chinese.

American brands are still global and dominant in many areas. How many Chinese brands can you name… American multinational companies still dominate globally. How many global Chinese companies can you name…

At this point it is also important to ask a very fundamental question. What actual structural advantage do the Chinese have..

They are not rich in resources. So the Chinese must scramble to try to go into areas that have proven very difficult in the past. Areas like Africa… Many areas in which they are trying to establish themselves have proven very volatile in the past.

While arguably the American political system has problems the Us has been fundamentally stable for well over 100 years. It is not at all clear that China will continue to enjoy a stable political climate in the coming generations.

Here again i am not going to enter a debate on the Chinese political system or structure.I will only say that it will only likely to face challenges when domestic growth slows or for that matter ends..

One of the main undisputed advantages that China has enjoyed has been a cheap labour force that is highly disciplined and hard working. The costs of labour in China however have risen and will continue to rise. Just as japan lost this advantage so will China. at that time it will have to rely on innovation to fuel economic growth.

Certainly as long as China is playing catchup in areas like construction and infrastructure there is room for more domestic growth. there are clear indications however of a developing bubble in housing in China as well as a dramatic decrease in the effective return on capital.

None of this takes away from the tremendous accomplishments of the Chinese or the fact that in my opinion China will continue to become a more and more important player on the world stage. I also wish the Chinese well in terms of navigating the road ahead.

The truth through is that America whatever its current problems will continue to play a crucial role in the world economy and on the world stage for the balance of the 21st century.

China’s Mercantilism and New Global Economic Order

Modern communication technology has allowed China to achieve a centralized bureaucracy that has a smaller chance of becoming overextended and too top heavy. The danger, of parts of central government melting into regional structures with rebellious consequences, is diminishing every year. The risk is not totally gone however if rapid economic growth bumps into serious stagnation and even GDP reversal. As of today, China has the creaky uneven centralization of 18th century France and is gleefully engaged in large scale mercantilist practices.

Chinese society is not yet fully urbanized and consolidated. Beijing cannot yet engage in cutting edge mercantilist practices as done by Japan and Singapore. Chinese political center only recently overcame last remnants of feudalism, warlordism, and peripheral regional integration. Having dealt with that, China is pursuing the same economic path that allowed Kaiser’s Germany to rapidly grow by taking advantage of British post-mercantilist free trade period. It is very historically appropriate. There is no need for Beijing to emulate Spanish, British, or French mercantilist experiences.

For a nation of 5 year plans, it makes sense to try to skip developmental steps and leap from macroeconomics of Kaiser’s Germany to those of Japan. As of today, China has done rapid neomercantilist development by the book:

1) Government imposed positive trade balance through protectionism and currency control (yuan pegged to the dollar)

2) Self sufficiency in agriculture and manufacturing of basic to advanced goods

3) Acquisition of large amounts of money and gold (around a trillion dollars worth as of 2009). Controls to prevent wealth from flowing out of the country through protectionist restrictions on imports

4) Large scale mining and infrastructural projects to increase use of domestic resources and terrain. Hamilton and Quinsy Adams would be proud of what Beijing’s coastal elite have achieved in the last 20 years. China has also secured 60% of Africa’s resource exports and are structurally integrating Central Asia and Siberian Russia into their resource feeding network.

5) Keeping the overall population’s wages low to increase country’s overall manufacturing exports. That is easily accomplished by underdevelopment of Western provinces like Tibet. One child policy is more imposed on the wealthier Mandarin ruling coalition than the periphery ethnic groups. Uneven implementation of one child policy keeps periphery ethnic groups more fertile and poorer. Coastal urban ruling peoples spend more energies on advanced wealth generating employment rather than saving to augment multiple children.

6) Keeping of imports limited to natural resources and large scale buy outs of foreign expert talent in anything from engineering, electronics, economics, and hard sciences

Current opinion and international action has just been reactive so far. Westerners are mainly focused on China’s attempts to prevent rapid devaluing of the bought dollars (before all of them are eventually used on natural resources anyway) through creation of an international reserve currency . Some look on how the international recession, can be used by China, to move from less advanced manufacturing to price competing with Germans and Japanese when it comes to advanced electronics and electric cars. Chinese confidence in constructively criticizing the existing international economic system is often noted.

Very little attention has been paid to the implications of the world being pulled into a mercantilist arrangement. China is becoming more predictable and thus out-maneuverable. Originally, Britain became economically successful because it added free trade theory onto mercantilist practice earlier than Spain or France. It stayed one step ahead of the competition. However, the new economic hybrid has created oligarchal capitalist interests who then used liberal theory to reduce state’s involvement in the economy. Wealthy exporting interests (who controlled the house of commons and people’s opinion through printed media) used appeals to individual freedom to dismantle the mercantilist/free trade hybrid that made Britain powerful and wealthy to begin with. Britain coasted along but economically declined as hybrid societies were able to build up new waves of industrial assets through neomercantilist practices (Germany/ United States). As Britain declined in industrial might, it focused on its core strength of money management and that lead to the torch being passed down to Wall Street in the 20th century. The great competing banking hubs of Europe (Paris, Berlin, Moscow) were looted in the wars/revolutions. We now see what happens when banking and finance is the core strength and emphasis of the economy.

China is now in the process of moving to the final stage of manufacturing asset concentration through focus on development of advanced products like cars and computers. Rapid economic assimilation of Taiwan and Hong Kong will quickly aid in that process. Western investment in Taiwan created a base for high technology and competitive know how. Many Taiwanese oligarchs have already basically integrated their companies with mainland ones. Ideologically, Taiwan’s Kuomintang political center, can now smoothly cooperate with Chinese authorities. People forget how important socialism was in Chiang Kai Chek’s original nationalist ideology.

Very soon, China will begin manufacture of high technology goods to compete with Germany and Japan for markets in Russia, Europe, and North America (as well as lower end cheap electric cars sold to developing nations). They will be forced to utilize existing free trade international system (perhaps stabilized by IMF’s Special Drawing Rights currency basket) to push these products abroad.

How would Chinese like to see the world once their products flow onto middle class Western markets? They would like to see no protectionism from Europe, Russia, Japan, or North America. They would like to see rule of law and capitalist adherence from everybody in the world. They’d be fine with North America and Europe reduced to South American-esque resource providers and vacation destinations. We can see that if China takes on Japanese level importance in high technology exports, they’ll be able to then finally consolidate nationally and relax the amount of force needed to keep social stability.

In a few decades, the communist leadership in Beijing will then be able to claim that not only did they bring the nation out of poverty but they:

1) beat Westerners at their own game like Japan did (but without a period of war over resources)

2) created real feeling of nationalism, inter-ethnic peace, and modern nation state like Chiang Kai Chek wanted

3) avoided Soviet Union’s mistakes when undergoing Perestroika while properly utilizing communist fruits of mass literacy and emphasis on science/engineering

4) took the torch from United States as the Global role model when it comes to free trade, peaceful co-existence, lack of harmful interference in other societies’ business, isolationism, respect for borders of small states, and business cooperation

5) built more for the developing world than the financially oriented English speakers by swapping resources for real engineering construction projects

6) helped create a stabilizing one world currency for more even international development

Such claims will allow Communist party to win election after election for a number of decades even if they then allow political pluralism. Many Asian states continued to have one party rule for decades even after democratizing. Cultural collectivism and emphasis on agreement allows power elites to work smoothly together. Taking into account Britain’s experience, China can easily continue to pragmatically evolve, build a financial center through Hong Kong, bring new resources (such as Helium 3 from space exploration), and guide humanity by being its center of progress.

History has shown that leading global elites will not allow such unimpeded ascendancy. Cutting off resources and containment is too blatantly hostile. Japan and Imperial Germany have demonstrated that. Advanced hybrid of mercantilism and free trade (from a society strong enough economically and technologically) will be the only way to counterbalance Chinese ascendancy. Only European Union with English and Russian speaking allies has what it takes to effectively compete and prevent formation of a long term hegemon that is culturally and psychologically uncomfortable for Westerners.

Earlier in the article, it was mentioned how Chinese bureaucracy, has a small chance of being destabilized again. There is precedent for this happening at numerous times in China’s history with horrible civil wars and revolts from poorer less developed periphery. China’s gini index, that shows country’s income inequality between the rich and the poor, shows that China is even more economically unequal than United States. Today, Beijing’s authoritarian rule keeps the lid on trouble from elites from either the oligarch coastal factions, rural/regional factions, and urban West emulating liberals.

European Union’s job, to deal with the near future, involves:

1) Being proactive rather than reactive to Chinese, American, or Russian moves

2) Acquiring valuable allies to augment influence. That means working first with Russia to kick American/British influence out of central Europe and then with England to push American influence out of NATO. NATO can then be ended and America approached as an equal power to work with.

3) Being pragmatic and not looking at human rights when acquiring resources from other nations. Europe still has time to lock onto substantial amounts of resource exports from the third world, especially Africa. It can join Russia in developing the Arctic energy reserves and help Russia outbid Chinese resource extraction/exploration companies in Central Asia.

4) Consolidate EU structures, such as the European Parliament, so more coherent action can be undertaken with more popular trans European legitimacy.

5) Use advanced collective protectionist methods to keep an edge in high technology products to stay a step ahead of China. Contribute even more constructively to global currency formation through IMF where Westerners still dominate.

6) Work with United States and England to manage the geopolitical, social, and economic decline of United States peacefully and productively. Invite young American professionals to European Union to displace social pressures from relying on less assimilative Muslim immigrants. Become the stable adult co-equal mediator between Russia and United States so the two former superpowers can productively contribute and provide nuclear protection. Open borders to young educated Westerners from around the world to counterbalance aging of Europe.

7) Develop strong ties to regional powers like Japan and India to counterbalance Chinese cultural influence. To do that, rapidly expand economic cooperation with them in the sphere of building climate change infrastructure, energy, military, and space

8) Comprehensively educate the public on climate change and loss of technological edge to China in non-confrontational terms. Take the lead in recognizing petty-infighting (like Poland’s mistrust of Russian cooperation in Europe) and offer tangible economic/developmental incentives to major actors to overcome them.

Brussels has enough time to still effectively consolidate before China does. It will require the same long term vision, developmental eye, and good historical sense as the one possessed by their Chinese politburo counterparts. Europe is more economically egalitarian than China. It has more power elites and cutting edge professionals. It must find a way to be protected by Russo-American nuclear umbrella (without being controlled by them) so not too much money is spent on integrated European defense. Together, Western peoples of the world got close to a billion people and have as much of a shot as Chinese (less than half the Chinese speak the ruling dialect of Mandarin). Western civilization has the qualitative expertise to provide solid competition that will benefit all of humanity.

Forecast America 2008 – The Church and the Nation

As a fledgling believer about four decades ago I began to have dreams. They were like movie previews of events to come usually personal but at times more universal in nature. It was spooky enough having the dreams but even more unsettling was the fact that of several thousand dreams over the years not one was ever wrong.

Always checking the dreams against the Bible to make sure there were no inconsistencies was my first rule of interpretation. But often my dreams needed no interpretation; they came on a “what you see is what you get” basis. I saw the events exactly as they happened; no interpretation needed.

I’ve never accepted the ability to view the future as merely novel or interesting but have approached it all with the deepest sense of responsibility. The Bible strictly warns that if someone purports to have heard from God when they have not they will be totally responsible for that error, or lie if they are mistaken or just being presumptuous.

Very few dreams had to do with world events for which I have always been thankful. I believe I will see more as the need arises. In one dream I did see the return of the Lord and in another message I was warned of an economic collapse in America that will dwarf the stock market crash and the dust bowl days combined. I can see the future but I can’t predict what God may show me about the future.

What has guided me over the years has been the definition of a prophet I found in the Bible and one other source. The biblical definition says “And he said, hear now my words: If there be a prophet among you, I the LORD will make myself known unto him in a vision, and will speak unto him in a dream.” (Nu 12:6)

The other definition was that a prophet is one who “tells forth the will and counsel of God.” This definition implies that prophecy is not relegated to only speaking about the future and is in perfect harmony with a verse from the book of Revelation that says “the testimony of Jesus is the spirit of prophecy.” (Rev 19:10)

Today more Bible prophecy is being fulfilled than in any other time in history. The two major events having to do with Jesus Christ are his first coming (Messianic prophecies) and then his second coming (pre-millennial prophecies.) Obviously the bulk of prophecies yet to unfold are pre-millennial. Up to about one quarter of the Bible is made up of pre-millennial prophecies.

As a boy I watched my grandfather load himself and a few of my uncles into an old flatbed truck and travel 35 miles to a nearby city to consult with a Portuguese Feiteceira (witch) who would tell him why his poultry business was not doing so well at times. He would slay a few chickens and throw them on his neighbor’s front yard to break the curse and go on with business as usual.

This is not prophecy as the Bible sees it. In fact this book that speaks so much about future events has serious warnings about seeking the future or pretending to know the future. Prophesying for money, prognosticating, witchcraft, necromancy, (reading the liver) astrology, stargazing, psychic reading and soothsaying are all strictly prohibited by the scriptures. If God has something to say he alone picks his mouthpieces and he alone certifies them. The most unique thing about these oracles is this; they never prophesy anything that conflicts with or denies the “prior” revelation…the Bible.

Many people are studying the prophetic side of the scriptures today. That study is referred to most often as “eschatology.” Unfortunately not everyone doing these studies is qualified. Those who are Biblically grounded and who shun liberal interpretation are seen to be the most reliable. These matters are not for the novice or the person who is just dabbling.

Many certified eschatologists are also good at making predictions or accurate forecasts about the future because they compare current events against the prophecies in a responsible and balanced fashion. You won’t hear a lot of “thus saith the Lord” from these kinds of people. They will research, analyze, and speculate in a learned and biblically grounded manner and their view of things can generally be trusted. It behooves the hearer to pick your prophets with care.

One thing you will never hear from a real prophet is the naming of a specific date or time for the return of the Lord. Christ strictly warned that no man would know the exact time of his return. (Mt 24:36) What Christ did say was that we would be able to see the season or the generation in which his return was imminent (Mt 24:32) and not to see it would be our folly. Refusing to see it is even worse and even that was prophesied to come as well.

It is in the spirit of the aforementioned that I make my predictions for America for 2008. They are “soft predictions” so don’t get nervous. But do watch carefully because you will lose most of the bets against their accuracy if you are a gambling person.

If a liberal democrat of the top contender variety is chosen to lead this county in the upcoming election all bets are off. My forecast for America if that happens is far too bleak. That eventuation would produce the fastest and most severe downward social and moral trend this country has ever experienced. I am speaking here of a Clinton or Obama win in the race for president as if I really needed to say that.

Keeping in mind that the President represents only one part of our three branches of government and the social trends of the population can often outweigh all three branches of government. We can’t hold a single leader up to more than they can produce. If a conservative values based individual like Alan Keyes or Mike Huckabee is chosen the difference will be large but the will of the people must never be left out of the equation.

In fact it is the “will of the people” that is my next prediction. Government by representation has severely faltered in America over the last decade. Our reps are not voting our will like they used to. In the EU failure to get the remaining countries into the EU block of nations has resulted in the abandonment of popular votes and referendums. Now the parliamentary decisions are being counted on more than ever rather than the will of the people. Enter America.

Government that Ronald Reagan tried so hard to make less lumbering and unwieldy has re-fattened in the last decade. The fed will tell us how we are going to live; it’s easier than wading through millions of opinions and cumbersome referendums. Top reps are streamlining much legislation on local, state and federal levels with or without regarding the “will of the people” to wit California’s twisted and almost unbelievable passing of SB777. Lest we forget the other brazen example of the slaughter of “for the people and by the people” the NAFTA derived Mexamerica superhighway controversy looms large as a perfect example of leaving out the “will of the people.”

As for sharing pulpits with candidates who think babies have no rights and gays should have even more rights, this is all part of the well defined “apostasy” of the church promised in Biblical prophecy. Preachers with mega-churches who refuse to call men to repentance and salvation through Christ’s sacrifice on the cross are also part of the predicted “falling away.” Prosperity gospel, cotton candy religion and feel good theologies are all elements that will leave the church divided and impotent more in 2008 than ever before. I predict that apostate churches will flourish in 2008. I can add that these churches will be the first to be struck down by the Antichrist and the most severely dealt with by secular forces in the not too distant future.

Conversions to Christianity will continue to flourish in third world countries as they are now in parts of Africa, Central America and South America. China will continue to see the Christian faith grow in spite of fierce resistance and persecution. This must not be read as proof that the apostasy is not underway. God is able to keep both promise and prophecy fulfilled and moving forward at the same time. One of the last day’s signs is that the gospel will be preached throughout the world at the very same time that whole nations will be tearing up the roots of the church and eventually directly opposing and persecuting the church worldwide.

I believe that natural disasters will occur with greater frequency than ever before in 2008. Perhaps some serious earthquakes in the western US and some deadly weather conditions around the rest of the country. As always no one in the secular world will acknowledge that any of this has to do with Gods direct influence. Increased frequencies of any natural phenomena will be noticed but attributed to natural causes and glibly explained away by scientists and other “experts.”

On the positive side many wandering stars will be re-gathered in 2008. Thousands of people who have been straddling the fence for years will return to the faith they were once tutored in. Additionally new converts will sweep across every age group and the intensity of their conversions will be notable. They will be accompanied by dreams, visions and even some miracles. An entire generation of Joel 2:28 Christians will begin to emerge in 2008. If you know the scripture this promise has probably just lifted your heart and maybe produced a smile on your face, if you do not know what Joel 2:28 says nothing said here will make any difference anyway.

Finally events in the rest of the world will catapult America into some sudden foreign policy changes. Iran will prove to be the peskiest and ultimately the most dangerous influence in the Middle East. Europe will flex new muscle politically, militarily and the Euro will push the dollar down to new lows before a worldwide economy emerges. 2008 will see upheavals in the economies of several countries and Canada will be among them.

Hollywood, TV and media in general will plunge to new depths of prurient immorality and the government will have little effectiveness in curbing it. It will be a year of giving the people “what they really want” even if it is choking them to death.

2008 could be said to be the year of the sinking ship. An old analogy used by evangelists years ago now will take on new meaning in 08. A large ship stranded at sea with no power or ability to communicate is sinking fast as the Captain comes down to the grand ballroom to announce what looks like the greatest act of benevolence ever seen at sea. He announces that the ships stores are open to all and they can have anything they desire and they can do anything they want to do. The passengers are gleefully delighted and begin to indulge themselves without reservation.

A few sailors and passengers who know what is really going on try to warn the rest that the ship is taking on water from below and is sinking. These doomsayers are mocked, scorned and ridiculed. The analogy is simple the ship sinks! The more personal license and uninhibited behavior that is encouraged in any society is directly linked to the amount of time to the final plunge to the bottom. 2008 will be taking on water at an alarming rate and a few sailors will be trying to herald the warning against a backdrop of self assured collective solipsism and the deep blindness caused by self indulgence. God help us in 2008.

As I move down the one way road toward the end of my walk in this old world two things grow stronger everyday. One is the love I have for my God and his son the Lord Jesus Christ, the other is the love I have for America. It is because of both that I can say that with prophetic fulfillment comes a dark night upon the whole earth. I can say with Christ that if your going to work some good with your life you had better do it now because “the night cometh, when no man can work.” John 9:4

If you are a conservative American don’t be discouraged because a few names have fallen off the wagon. Remember the alternatives and that most of the liberals were not ever on the wagon to begin with. Fight the good fight.

As for faith in God remember as the ball drops this year in Times Square there is also a door closing to a countdown of God’s prophetic timetable. Don’t bother with a New Years resolution and don’t insult God by bringing in the New Year with a drunk and a midnight kiss. Its not about resolutions or reformations it’s about repentance. Pause as the New Year comes in and get right with God.

With a simple and heartfelt prayer in the privacy of your home, office or car you can call upon Christ to forgive all your sins and invite him to come into your life. He won’t refuse anyone and that always included you. Happy New Year America!