Posted by
CKHustler on Monday, February 08, 2010 10:47:31 PM
So, I was talking to a friend last night about the next superpower being China and the repercussions it would have. Whenever I talk about these things rather than just think about them I usually do some pretty good problem solving and some ideas came to mind.
First, no country has ever been structured around the global economy. What I mean by that is when the US economy was shaping up, the world trade was existent, sure, but not to the extent it is today where distance is nothing and cost is the only obstacle. The entire western world was formed before this time and we are now wilting. China could be the only country that might make the claim, but it too will fall victim to the effects of it when they become the superpower. If they truly rise to power, they will undergo the same problems we are today with workers making more money and cost efficiency pushing businesses to outsource. India will then rotate to the main supplier of jobs as they are beginning to now and the cycle starts over with them.
What happens however after that? Shaping economies to gear towards a global economy will be a very tough thing indeed. In my opinion, true capitalism will be the only way for a country to rise to a superpower and keep the title.
China will rise up above us for now, after we collapse by our own stupidity. However, once they begin their rise, their people will not sit back and stay in the poverty they are in. Soon they will want higher wages, more freedoms, etc etc. What can China do to combat this? As a communist country, the cost efficiency is not enough for an open market to thrive and if they allow trade to continue as it does now, they will fall victim to the global market as I stated above. The other route is for all imports to be stopped, or at least virtually stopped by tariffs. This will increase tariffs on their exports as well, causing them to go into virtual isolation, much like they did a while back. They do have 1 billion people as consumers and could make it work for awhile, but it will inevitably prove to cause their downfall as a superpower. No matter how it is sliced, as a communist country, China would not be able to compete worldwide while increasing their standards of living. Therefore, they cannot sustain the title of a superpower for much longer than it takes for another country to come claim the title.
India I am less sure about as I am less knowledgeable about their government structure, so I will not comment.
A true capitalist country will keep all costs, not pertaining to the development of any item, so low that they should be able to compete while having a higher standard of living than other developed countries. Innovation is higher in such economies as America has proven over the past 200+ years, which also adds another facet to the private sector that a centralized economy would not have.
That is only my hypothesis because truly I do not know how this will pan out. History has yet to show us what will happen as the global economy has never been so integrated. With the entire western world in chaos economically, it will be interesting to see what type of economies thrive and how living standards will compete around the globe.
What say you?