STATE OF GLOBAL ECONOMIC POWER AT THE BEGINNING OF THE TWENTIES OF THE 21ST CENTURY

Abstract

The economy of China, driven by a strong export-oriented industry, will surpasses America’s in the beginning of the next decade. Yet, in the asymmetric world that is emerging, the US will remain the dominant military force. Generally, the U.S. will remain the leading global power, and over the next decade, thanks to its strong diplomacy, network of global alliances, military supremacy and the dominant cultural pattern. Europe will continue to be focused on themselves, but the EU will, nevertheless, remain a strong global player.

China and Russia are mighty, independent sovereigns with un-Western worldviews, and they always have been (while E.U. an American ally is politically incoherent and inefficient). The rise of China will inevitably challenge America's longstanding presence in Asia. Bipolar Asia is a real possibility, with the Sinosphere surrounded by peripheral littoral states in loose alliance with U.S. as organizing architect.

Seven years after the crisis it is question whether insufficient investment and/or waning gains from technological innovation have pushed the global economy into a „new normal” of lower growth. The US seems to be settling into annual real growth rates of around 2%, and China seems to be headed for the 6-7% growth rate, which is „new normal.” Some observers agree that such a rate can be sustained for the next decade or so, provided that the government implements a comprehensive set of reforms in the coming few years, while others, however, expect China’s GDP growth to continue to trend downward. Slow and uncertain growth in Europe – a major trading partner for both the US and China – is creating headwinds for the US and China. Of course, no one should expect a return to the pre-crisis boom years, given the demographic pressures that almost all major economies – including China – are facing.