If the Industrial Revolution first took place in China, what would history be like? Ian Morris, professor of Stanford University created an alternate history in his 2010 book Why the West Rules - For Now. In the middle of 19th century, Chinese gunboats sailed into the Thames as Queen Victoria of England paid tribute to the Qing emperor, while sending her husband Prince Albert to China to serve as envoy. However, what actually happened was in fact the opposite: the British army twice defeated China in the opium wars.
Eclipse by Arvind Subramanian, first published in 2011. A Chinese version was released for the mainland market in May 2012.
In his book Eclipse: Living in the Shadow of China's Economic Dominance, American economist Arvind Subramanian estimates China will dominate the world economy by 2021. At that time, China will own the largest share of the vote in the IMF. In order to alleviate an economic crisis, the new president of the United States is forced to sign an agreement with the Chinese president of IMF. According to the agreement, America promises that it will obey a series of limited terms while receiving US$3 trillion in financing. After this scenario occurs, "the leadership of world economy will have shifted to the Chinese," Subramanian writes. On the cover of the English version, President Barack Obama and President Hu Jintao are shaking hands. However, President Obama leans about 30 degrees toward President Hu Jintao in an apparent gesture of respect.
In the book, Subramanian predicts the next two decades of China-US relations. According to his estimates, China's purchasing power will reach a quarter of the global GDP by 2030, which was equivalent to the United States' position in 1950. However, America will account for 12 percent, half of China's purchasing power. In other words, China will have an absolute economic advantage 20 years from now, even if China's GDP growth rate falls to 4.9 percent.
Subramanian discusses six factors that will determine the economic performance: overall resources, military strength, financial strength, external finance, trade and currency. However, he only uses resources, trade and external finance in his "economic leading index," saying the other indicators are mainly determined by these three factors. He also stresses the political influence of economic power, saying the economy not only provides the foundation for other powers, but also offers the ability to control global affairs. For example, China's imports of goods will reach half of America's by 2020. At that time, China will be able to better influence its trading partners through the market.
Over the years, America has faced challenges to its economic hegemony, mainly from Nazi Germany, the Soviet Union and Japan. However, unlike these rivals, China has three times the population of America. Although population has always been considered an obstruction to the development of China, it will also transfer to national strength as China's economy matures. A simple calculation tell us that China's total GDP will become larger than the US as long as China's per capita output value exceeds a quarter that of the US. Subramanian says that in terms of purchasing power parity, China already became the world's largest economy in 2010.
From this assumption, it seems Subramanian is insinuating that a large amount of poorer people can lead the world just because their total income amounts to more than a smaller sum of wealthier people.
Subramanian admits that China lacks soft power projection in addition to its hard tools of military and economic might, especially in the fields of culture and scientific research. However, he claims that by 2030, as a middle-income country, China will gain internal cohesive strength to achieve external goals as well as create national values worth imitating. From this statement, it seems his understanding about China is not very deep.
The Wall Street Journal named Subramanian as one of the "first-class economists". From this book, it is clear that he understands macro statistics very well, but he is also very easily deceived by numbers. Although economic size is important, this alone is not enough to take the lead. Industrial structure, technical advantages and the control of strategic resources affect a country's position in the global industrial chain as well.
Subramanian points out developing countries can still narrow their knowledge gap with rich countries while the developed world suffers from economic crisis. For example, China can continue to acquire existing technology from developed countries. As the technology and information gap narrows, Chinese enterprises can transform from cooperators to competitors. In terms of the number of published academic works, the gap between China and America is diminishing. But, Chinese science and technology researchers still trail their Western counterparts. China can't hope to become a leading science and technology center in the short run, unless the United States happens to expel a large number of scientists like the Nazis did.
Even if China gains economic dominance, it still won't enjoy American-style hegemony. As far as ideology is concerned the so-called "China Model" can't compete with the Western development model so far. As American scholar Francis Fukuyama pointed out, China's model is only applicable to East Asian countries which have been influenced by Confucianism.
Eclipse vividly describes Subramanian's predictions for the decline of the United States. However, the US-led international order has provided a good external environment for China's rise. It is hard for us to imagine a day when China dominates the world. But if China were to replace the United States in becoming the most powerful country in the world, we hope that China could lead human civilization to a new prosperity.
The author works with the School of Social Development and Public Policy of Beijing Normal University.
