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3 New Thoughts on China’s Emergence as a Superpower

3 New Thoughts on China’s Emergence as a Superpower

September 6th, 2012 // 2:19 pm @

There is a lot of recent chatter about China, even though Iran is the big topic in international affairs.

Recent articles and books on China mostly center around one of two themes.

One side argues that China is a serious and growing threat, the other that China is misunderstood and Washington should do more to cooperate with Beijing.

A third, more relevant, argument is needed, and it goes something like this: China isn’t the problem, Washington is!

Three Trends

Consider the following three trends:

1-Many China experts in the West criticize China because it is becoming a superpower without showing much likelihood of getting involved in world leadership.

But this is actually a normal historical pattern. New superpowers benefit because the older superpowers are overextended around the globe trying to “exert leadership” in every part of the earth.

For example, Britain’s overreach made it simple for the U.S. to become a superpower, just as Spain’s overextension did the same for Britain. Rome did the same thing. Critics say that it was Hitler who weakened the UK, but imagine how strong London would have been if it had stopped trying to police the world for the decades before Hitler and had instead built its wealth and strength. Hitler may well have declined to spread across Europe in the face of such power.

One would think that an old superpower in a battle with a rising new threat would be smart enough to reduce its global overreach and return to the things that once made it competitive. But, historically, logic seldom reigns in superpower decline.

2-China is currently involved in aggressive currency competition. It seems to want the U.S. currency to be weakened, and for the U.S. credit rating to be downgraded again. It is also pushing for the dollar to lose its world reserve currency status (which allows Washington to print money at will without metal backing).

When this same thing occurred to Britain in the 1970s, the British economy was deeply hurt and still hasn’t fully recovered. In fact, the average net worth of most people in the UK was decreased by more than 30% overnight when this happened.

Such a circumstance in the current U.S. would be a major boost for Chinese power in the world, and the American economy is presently vulnerable. The natural consequence of such a development would likely come in two stages. First, a new reserve currency would be an IMF or other international tender backed by currencies from several top nations including the U.S., EU and China. Second, eventually China’s currency would be adopted as the world reserve.

This is not a far-fetched possibility. As mentioned above, it happened to Britain as recently as the 1970s.

Shockingly, while China is actively promoting this scenario, Washington is basically ignoring it and suggesting tax increases, increased government spending, and more regulation. This plays right into the Chinese strategy, and is worse than the old clichés of arranging chairs on the deck of the Titanic or fiddling while Rome burns. We have time to turn this around, but Washington is preoccupied with increasing taxes and regulations, both of which actually strengthen the Chinese agenda.

3-Chinese firms (government owned) are buying up many of the world’s natural, mineral and energy resources on all continents—including North America. U.S. firms can’t compete with such purchases because of the regulations and extra costs required by the federal government. Washington is literally refusing to compete with China and forbidding private American companies from doing so either.

Don’t Blame China

As I’ve written before, we shouldn’t blame Beijing for this. It’s natural to try to increase one’s power and place in the world. Good for the Chinese for expanding their influence and wealth! That’s the pursuit of happiness.

But it is amazing that Washington won’t let U.S. free enterprise compete fairly in this contest. If Americans want to compete with the emerging Chinese Century, we should give freedom a chance. Free enterprise is significantly and demonstrably more effective than the kind of centralized state economics used in China.

But a federal government in Washington that is highly bureaucratized and addicted to more regulation isn’t much better. In fact, when a Chinese company with the backing of Beijing competes with an American firm that is highly hampered by Washington, it isn’t surprising that the Chinese win.

The battle for leadership in the 21st Century couldn’t be clearer: China vs. the U.S.

If this were as simple as authoritarian Chinese state capitalism versus American free enterprise, the battle would be short and easily won by the United States.

But the battle is actually authoritarian Chinese state capitalism versus overreaching federal U.S. regulations, higher taxes, bigger government and other policies that dampen American business endeavors.

If this reality remains, Beijing has all the advantages.

Unless something changes, and soon, we are going to lose this battle.

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One Comment → “3 New Thoughts on China’s Emergence as a Superpower”


  1. Keith

    2 years ago

    Agreed. However, China is not a colonial power as the UK and US have been. It does not seek hegemony but instead seeks economic stability and growth, mainly due to its population. If something were to suddenly go bad economically with China, the powers there would not like to see that happen. Essentially, they have a big stomach to feed. Plus, with their practice of killing baby girls in the river, their entire society will self-collapse in the years to come. I do not have the numbers but the trend is there and many have spoken on this.

    The one thing we must be aware of is the Platonic statists constantly working to centralize power because they want to solve all social good from central command, which is their idea of social justice. They do not see any other way because they see human beings as selfish and unable to serve and help each other. Notice how Obama agreed to the council of 13 with himself acting as the tie breaker. A true statesman does not do this.

    So what is the solution?

    The conservation of responsibility within communities that solve for their own health, education and welfare by taxing property (not income) with huge breaks for locally owned companies that hire locally. Essentially, the battle is to find ways to stop the government from funding our needs and from corporations at a distance from not adding local value. This will stop the abuse of liberty at the same time.

    In order to battle with Platonic controllers hiding behind global socialists, a new market must exist that shows how autonomous community designs can actually solve for all social needs far better than the state or the federal government. We are quickly approaching this rubicon in world history and are we ready for it?

    While the specifics of this model will be better defined as the years unfold, mainly because the market is there for it, increasing local sovereignty will fill the earth as waters cover the sea. It is not an effort to secede in total power from big governments, even though some state constitutions reserved this power before they entered the union. Instead, it is a secession of responsibility. Namely, a refusal to take government services because they come with too many controls and too much economic friction, abuse, and distortion. A decentralized but well structured responsibility movement is far more powerful than a liberty movement. Why? because it has teeth.


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