Foreign Affairs Friday: Poles of Power

Since the Cold War ended, we have lived in a unipolar world, with the US alone as a world power. It was always assumed that this would not last all that long. With China's rise, some have started to talk about a bi- or multipolar world. The economic crisis has led China, Russia, and other nations to claim that US hegemony has ended. One manifestation of this is a call for a new world reserve currency to replace the dollar.

However, the numbers suggest China still has a lot of ground to make up. The size of a nation's economy is generally the leading indicator of power. While a nation with a large economy isn't necessarily a great power (see Japan), it cannot be a great power without a big economy. As of 2007, the US economy is about 3.5 times bigger than the next, that of Japan. China and Germany are in a close race for 3rd. Goldman Sachs predicts that China will catch us in 2025, although long-term prediction is difficult.

The US has a much bigger advantage in military spending, another measure of power. We spend about 7-8 times more than China does. It's hard to say exactly how much more, because China does not disclose accurate budget numbers. Along with a monetary advantage is a technological advantage of 15 years or so. China cannot project military power outside of its own backyard at this point.

While many say the current economic crisis has hurt America's position in the world, it may hurt our competitors as much or more. The oil price drop that has accompanied the crisis has reduced Russia's ability to exert influence. In China, the crisis has reduced that nation's exports, and may threaten the Communist regime:

Because of the global economic crisis, however, Beijing is in trouble. The problems are numerous: China's exports are plummeting, tens of millions of migrant laborers have lost their jobs, millions of college graduates cannot find employment, industrial overcapacity is threatening deflation, and the once red-hot real estate sector has nose-dived. The country's faltering growth is posing the hardest test yet to the CCP's resilience.

While China is definitely on the rise, along with some other nations (India, Brazil), I think it's too early for them to start making a lot of demands. They have a long way go to, and many things can happen during that time. In the meantime, there are things the US could do to shore up its position, such as getting control of entitlements, cutting spending, and fixing education. I'm not too optimistic about that happening, though.