When China Rules the World

The heart-searching that accompanied the 2007- 8 primary and presidential campaign around Barack Obama’s candidature did not, at least until the financial meltdown just before the election, reach the conclusion that the United States would have to learn to live with decline. Even the precipitous decline in the value of the dollar in 2006-7 did not provoke fear of American decline, though a small minority of observers recognized that in the longer term the position of the dollar might come under threat. The United States thus remained largely blind to what the future might hold, still basking in the glory of its past and its present, and preferring to believe that it would continue in the future. Britain displayed a similar ignorance – and denial – about its own decline after 1918, constantly seeking to hold on to what it had gained, and only letting go when it could see no alternative. Indeed it only began to show an underlying recognition of its own decline in the 1950s, when it became obvious it would lose its colonies. The turning point in the United States may well prove to have been the financial meltdown in September 2008, with the near collapse of the financial system and the demise of neo-liberalism. The US National Intelligence Council report in November 2008 represented a 180-degree shift compared with its previous report just four years earlier in 2004. While the latter predicted continuing American global dominance, ‘positing that most major powers have forsaken the idea of balancing the US’, the new one anticipated American decline, the emergence of multipolarity, and a world in which the US would increasingly be obliged to share power with China and India. It declared: ‘By 2025, the US will find itself as one of a number of important actors on the world stage, albeit still the most powerful one.’ [1332] The task facing Barack Obama’s presidency is far from enviable. The worldwide euphoria that greeted his election sits uneasily with what appears to be the most difficult task that has confronted any US president over the last century: managing long-term decline in an immediate context of the worst recession since 1945 and a commitment to fighting two wars. Encouragingly, Obama’s election indicates that the US is capable of opting for an imaginative and benign response to its travails. But these are very early days yet: we are only at the beginning of a protracted process with many acts to follow over several decades, if not more. The American Right is powerful and entrenched, with deep well-springs of support. The biggest danger facing the world is that the United States will at some point adopt an aggressive stance that treats China as the enemy and seeks to isolate it. A relatively benign example of this was the proposal of the Republican presidential candidate Senator John McCain for a ‘league of democracies’, designed to exclude China and Russia (which he also wanted to expel from the G8) and thereby create a new global division. [1333] The longer-term fear must be that the US engages China in military competition and an arms race in something akin to a rerun of the Cold War.