The Greatest Challenge in the 21st Century: Global Governance
Some Chinese philosophers believe that when China dominates the world, there will be no borders. There will be one great nation with great harmony. China will create a more just world. The capital would be in Beijing. The first part of this – China dominating the world – is very likely to come true in this century. Great harmony and more justice is very questionable.
The U.S. economy has been the global leader since overtaking Great Britain in 1872. The Chinese economy will become the global leader during this this century. The impact on global affairs will be profound.
Although the media has paid very little attention to this event, China will pass the United States this year in the size of their economy, according to the World Bank, based on Purchasing Power Parity (PPP). PPP is a measure used to compare economies by factoring in differences in the cost of goods and services among countries.
In addition to China’s new position, India will pass Japan this year in PPP to become the third largest economy. What about a comparison based on nominal Gross Domestic Product (GDP), that is, a comparison at current exchange rates?
The Economist magazine’s Economist Intelligence Unit predicts that it will be ten years before China passes the U.S. in nominal GDP. Even then, U.S. per capita GDP will be much higher than China.
China has a population of nearly 1.4 billion. The U.S. has a population of 319 million, which is less than one-fourth the population of China. Consequently, when China’s per capita GDP reaches half that of the U. S., China’s economy will be more twice the size of the U.S. due to their larger population. (If you are not interested in the numbers, skip to the paragraph that begins with “Consequently.”)
An examination of the historical data may be helpful in contemplating the future. GDP in China changed very little during the 27 years that Mao Zedong led China. When Deng Xiaoping took over the leadership of China in 1978, per capita GDP was $90.[i] In that same year, 1978, U.S. per capita GDP was $10,225, which was 114 times greater than China.
By 2014, Chinese per capita GDP increased 81 times to $7,333. U.S. per capita GDP increased 5.4 times to $54,980. Hence, US per capita GDP is now only 7.5 times that of China. This reflects a vast improvement in life style for Chinese people.
China’s economic policies are a major contributor to their rapid economic growth rate. The other major contributor is that China started from a very low base. China still has a low base compared to the U.S.
Consequently, China’s economy may be double the size of the U.S. economy, in nominal dollars, by the middle of the century.[ii] If China spends the same percent of GDP on defense as the US, they will be spending twice as much as the US. This will significantly impact global leadership.
Some question this raises are these: What actions should nations take now to insure protection from the world’s dominate economic powers in 2050? What should China and the U.S. do to avoid the Thucydides Trap?[iii] Certainly, this subject is worthy of Government funded study of our alternatives and best course of action. China is studying various forms of government, focusing on Singapore, Sweden and Chile, but not the U.S. World Federalists have advocated solutions since the 1940s.
Global governance will be the greatest challenge in the 21st century. As obvious as this is, few Americans grasp the significance. Politicians cannot see beyond the next election. Consequently, little action is likely to occur until it is too late.
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