Chinese world order
With the United States facing a financial meltdown and record budget and trade deficits, the world is witnessing an emerging world order where the United States is no longer the dominant force. Unlike earlier dominant powers -- Rome and Britain-- that faced catastrophic military crisis before collapsing economically, the United States is dwarfed economically by China's industrial might. Rome collapsed when it faced the attacks by the vandals and British empire collapsed in the wake of two world wars. But the United States is facing an economic meltdown although it faces no real military threat. It is becoming dependent on rising China as an economic juggernaut. By the middle of 2007, China achieved several historical milestones: it displaced Canada as the biggest exporter of goods to America; it displaced America as Japan's biggest trading partner; it displaced Japan as Australia's biggest trading partner and it displaced America as the European Union's biggest trading partner. All this happened at a time when the United States has been facing a financial meltdown and massive budget and trade deficits.
In fact, America must borrow from China in order to buy manufactured goods from China.
Another casualty of financial meltdown in the wake of sub-prime mortgage crisis is the collapse of American consumer confidence. With most Americans facing a mountain of debts after indulging in unaffordable mortgage, they can no longer act as an engine of growth and collapse of consumer confidence has become the biggest obstacle to any economic recovery. As opposed to anaemic growth of the American economy, the Chinese economy has resumed its stellar growth after a brief slowdown. In fact, the Chinese economy has replaced America as the engine of growth for the world. The quick jaunt from deep recession by Germany and France can be attributed, in good part, to fairly strong demand in China. French exports to China rose by 14.2 per cent in the second quarter of 2009. By all accounts, China is providing a shot in the arm for the struggling world economy. The driving force behind the rapid recovery has been the Chinese government's stimulus package worth 4 trillion Yuan (about $600 billion).
With heavily dependent on the Chinese largesse, the United States is now reduced to the role of the only military power capable of projecting power. Undoubtedly, the military remains the United States' strongest card; in fact, it is the only card. Today, the United States wields the most formidable military apparatus. But how long a military power, suffering from seemingly insurmountable economic problems, can hold to its unique status as the world's only superpower? As Prof. Martin Jacques, of London School of Economics, writes in his recent path breaking study When China Rules the World: "The fundamental problem of China for the US is not its military strength but its economic prowess. This is what is slowly and irresistibly eroding America's global pre-eminence. If the US comes to see China as primarily a military issue then it will be engaging in an act of self-deception which will divert its attention from addressing the real problems it faces and in effect hasten the process of its own decline." China's rising economic clout and America's faltering economy will mean that the United States will be obliged to depend on China to finance its vast military machine and at some point the United States will be obliged to cut back military expenditure. By that time, the United States might become an economic weakling, unable to maintain its status as a superpower. Only by disengaging in military conflicts in both Iraq and Afghanistan, the United States can bring its deficits under control. But will the American leaders listen?
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