China's Superpower Status Not A Done Deal Yet

AmericanMonetaryAssociation.orgFor year’s, the idea has been bandied about in financial headlines around the world. The Chinese rise to superpower status on the global stage was a mere formality, along with the eventual decline of the United States into “also ran” status. And if not also ran, then the American experiment in freedom and individual expression has been expected to slide back to the pack considerably.

But let’s not crown China King of the World just yet.

The next one billion consumers will be shopping in cities and towns in emerging markets around the globe, a fact of life that can’t help but weaken America’s status as the galaxy’s shopping emporium. Meanwhile, global technology companies are on the rise in places like China, India, and Brazil. For two decades, it has been presumed that the next world superpower-in-waiting was China. It is by far the most populous nation, acts as the United States principal geopolitical rival, functions as largest creditor nation, and has doubled its share of the world output in recent years.

So what is the problem actually that might prevent China from assuming its preordained place at the top of the food chain? In short, one party, totalitarian rule. The few reforms that have been incorporated into Chinese society – measured in controlled amounts, like bitter medicine – have had magnified effects, but without further reform, which almost certainly would have to include free elections and implementation of a multi-party system, the dragon’s takeover of the world could well fizzle out.

We have to look no further than Russia to see this in action. As Gorbachev dismantled the Soviet Union in the late 1980’s, and instituted massive reforms geared toward advancing the cause of freedom, Russia, the most advantageously positioned former USSR member, seemed poised to do great things on the world stage. But Putin and the Kremlin simply haven’t been able to release their grip on power. The Russian people realize their elections are a sham and that the KGB still runs the show, a disheartening development which slammed shut the door on entrepreneurial invention.

Unless Chairman Mao’s gang of disciples are prepared to put the needs of the Chinese nation above the needs of their own personal avarice, which few dictators throughout history have ever chosen to do, expect China to hit a Soviet-style reform stall and begin backtracking.

The only way out from under that yoke is revolution, and we’ve seen it work before…

The American Monetary Association Team

Flickr / ernop

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