The United States and the Rise of China: Implications for the Long Haul

Today, economically wounded though it is, the United States nonetheless remains the worldʼs most powerful state when power is measured in terms of economic and military assets. In the future, the U.S. economy will continue to grow, and the United States will remain the most powerful military nation on earth for some time to come. However, Americaʼs economic and military edge relative to the worldʼs other great powers, will inevitably diminish over the next several decades. The country best positioned to challenge Americaʼs preeminence, first in East Asia, and then perhaps later globally, is China. If Chinaʼs economy continues to grow for two more decades at anything close to the rate of the last two decades, then it will eventually rival and even surpass the United States in the size of its gross domestic product (GDP—measured in purchasing power parity terms, not in constant dollar terms), although not in per capita GDP. Even if its economy never catches up to Americaʼs, Chinaʼs remarkable economic growth has already given it significant political influence in East Asia, and that influence will only grow as Chinaʼs economy continues to grow. Moreover, having emerged as the low-cost manufacturing platform of the world, Chinaʼs economic influence extends well beyond East Asia and affects not only the rich great powers but also the struggling smaller developing ones, because of both its competitive prices for low-cost goods and its voracious appetite for raw materials. China is determined to climb up the technological ladder and may well give the United States a run for its money. China is already the dominant