Learning to Be Number Two

By Jon R. Taylor

Kishore Mahbubani， author of The Great Convergence： Asia， the West， and the Logic of One World， posed two questions to four U.S. politicians—two Republicans and two Democrats—who were part of a panel discussion that he chaired at the Davos World Economic Forum in 2012. The first question：“What do you see as the future of American power？” The second： “Could America adjust to being number two in the world？” Mahbubani expressed shock when he observed the unvarying reactions among the four politicians to the two questions that he posed： that America would always remain number one. More importantly， none of them could say or imply that the United States could ever be number two. Mahbubani noted that judging from their responses， it was clear that “America as number one is sacred.”

Quite frankly， Mahbubani shouldnt have been that surprised， given U.S. President Barack Obamas statement during his 2010 State of the Union address： “I do not accept second place for the United States of America.” While Obama and other American politicians may not be willing to accept second place， it does not mean that it is not happening. In 2012， China surpassed the United States to become the worlds biggest trading nation as measured by the sum of exports and imports of goods. It is a harbinger of things to come： China will likely pass the United States as the worlds largest economy by the time that the Communist Party of China celebrates its centennial in 2021. And if Hu Angang， a professor at the School of Public Policy and Management， Tsinghua University， is correct in his new book China 2030， Chinas economy will become twice as big as that of the United States and larger than both the United States and the European Union combined by 2030.

About a year ago， The Economist wryly observed that when “the idea that China has overtaken the United States as the worlds largest economy， the psychological impact on Americans， policymakers and citizens alike， is certain to be significant.” Observations regarding American primacy span the U.S. political spectrum and are quite telling， primarily because they play upon the parochial fears of China among the American people—fears that are as often whipped up by the U.S. news， media and entertainment industries as they are by politicians. It was evident during the 2012 U.S. presidential election and it is evident today within the U.S. Congress.

Many of Americas political leaders and policy shapers appear to engage in an exercise of willful reluctance by refusing to accept the reality that sometime within the next five to 10 years China will surpass the United States and become the worlds largest economy. But， it is possible that the American public is ahead of their politicians and policy shapers in perceiving that a change is coming. A recent survey conducted by the financial website The Street asked Americans which country is currently the “worlds dominant economic power？” The result： 28 percent of those polled chose China， while 59 percent chose the United States. However， the survey also asked respondents to look ahead five to seven years. The finding was revealing—and demonstrated much less confidence in Americas position. By 2018 to 2020， 36 percent said China would be number one， while only 43 percent of Americans believed that the United States would be the worlds“dominant economic power.”

Obamas successor as U.S. president in 2017 is likely to be the first one since World War II that does not govern the worlds most powerful economy. And there is another big，negative milestone ahead for the United States as Indias economy is projected by both Standard Chartered and the OECD to become larger than the U.S. economy by 2050. Additionally， the World Bank predicts that the U.S. dollar will lose its dominance by 2025 as the dollar， euro， and the renminbi become equals in a “multi-currency” global monetary system. Finally， just to throw a bit more gasoline onto the fire， Nobel economist Robert Fogel， writing in Foreign Policy a few years ago， observed that “by 2040， the Chinese economy will reach $123 trillion， nearly three times the economic output of the entire planet in 2000 … creating a situation where the average Chinese urban dweller will be living twice as well as the average Frenchman while China transitions from a poor country in 2000 to a superrich country in 2040.” By 2040， China will comprise 40 percent of the worlds GDP. Conversely， Americas percentage of world GDP will shrink to 14 percent. One can only imagine the American reaction to that prospect.

American reaction to the prospect of becoming number two should not be one of surprise. Nearly 20 years ago， a book entitled Chinas Grand Strategy： A Blueprint for World Leadership， edited by Cai Xianwei， explained how and why China would become the leading power in the world by the third decade of the 21st century. It theorized that the basis of Chinas rise would be its rapid economic growth and embrace of a socialist market economy. Furthermore， a quick perusal of Chinas 12th Five-Year Plan（2011-15）， as well as a 2010 State Council policy document entitled The Decision on Accelerating the Development of Strategic Emerging Industries and a 2011 plan by the National Development and Reform Commission， all elaborate in a quite simple manner how China would pursue the next stage of economic development and growth through the promotion of alternative energy， biotechnology， new-generation information technology， high-end equipment manufacturing， advanced materials， alternative-fuel cars， and new energy technologies.

So has China already become the worlds leading economic power， unseating the United States？ It depends on who you ask. According to a Pew Research Center survey， the answer is yes， based on international perceptions. That said， Chinas rise should be understood within the context of her distinctive history. China is getting richer， and the Chinese economy will surpass the United States relatively soon， but the relative affluence of the United States is one reason why China will not become the worlds most powerful country on the day that it becomes the largest economy. That day may be coming， but it will probably not be by 2020. Perhaps the United States may finally recognize that Chinas rise to the number one economy is all part of the transition to a new model for relations between powers， encouraging mutual respect and benefit， seeking cooperation and deepening integration of interests.

When China finally surpasses the United States， it may very well foster Sputnik-like moment for the United States， spurring it to engage in renewed economic initiatives and innovation efforts. Or， conversely， it could create a deep political crisis， eliciting feverish debates and searching for scapegoats to blame for losing Americas primacy in the world. Quite frankly， this does not have to be a crisis moment for the United States if it can recognize that the world has shifted from a Eurocentric， Atlantic Oceancentered world to an Asiancentric， Indo-Pacific Ocean-centered world. Despite the so-called“pivot to Asia” by the U.S Government， America is generally unprepared for the shift to an Asian century led by China and other nations. How the United States handles the shift to number two is of critical importance to future Sino-U.S. relations and world stability.