Thursday, August 13, 2009

The New Global World Order: The Emergence of China and the Decline of U.S.Power

Is United States’ global power, influence and leadership on the decline? Voices from Strategic think tanks around the world and from within the United States itself suggest that there is an emerging consensus that US leadership of the west and its global hegemony in general is severely under threat and slipping steadily.
British academic, Martin Jacques has authored a new book with a telling title 'When China Rules the World: The End of the Western World and the Birth of a New Global Order' he estimates that over the next half-century, China will emerge as the world’s leading s power and that there is a shift of power from the west to the East.
In another thoughtful piece, Japanese analyst Hitoshi Tanaka, author of The Crisis of Global Governance and the Rise of East Asia argues that US leadership of the world has slipped for two reasons. The disastrous foreign policy of former US president George W Bush ,including the costly invasion of Iraq, without United Nations Security Council approval and a continuing costly war in Afghanistan in military and economic terms. Nobel Prize economist Joseph Stiglitz puts the cost of the US debacle in Iraq at $ 3 trillion.
The failure by the US to exercise global environmental leadership on the Kyoto protocol has irked many of the US’s own allies including Japan and the United Kingdom.
One would add that the current global financial crisis and the declining US economy have not helped matters either and exposed the vulnerability of US economy which has reportedly shrank - a major cornerstone of US geopolitical capability and prestige. The US has borrowed excessively from China to finance President Obama’s stimulus measures to shore up the US economy.
TIME magazine reports that the US owes China $ 763.5 billion in US Treasury department debt.
Signaling an emerging new world order, China has publicly called for a replacement of the United States dollar as the world’s reserve currency owing to perceptions of a long-term weakening US economy. China has threatened to introduce a new global reserve currency called’ the renminbi’ to replace the US dollar. China’s increasing importance is exemplified in its influence in the current global financial crisis., it is viewed as the ’primary driver of global economic growth’. Indeed recently reported economic growth in China was interpreted as a more optimistic outlook for the rest of the world economy.
According to Newsweek China is slated to surpass Japan this year as the second largest economy in the world with India not far behind.
The rise of China, analysts suggest, has altered the world order and will see the declining influence of the Group of 8 countries (G8) of US, UK, Canada, France Germany, Italy, Japan and Russia and in their place the G2, China and US. President Obama has said that Washington and Beijing will shape the 21st Century.
‘At the time of its formation in 1976,the G7 members accounted for 64% of global GDP, that number has now fallen to 56%. Meanwhile the economies of the so called G5 nations-Brazil, China ,India Mexico and South Africa have expanded and now account for approximately 12.7 % of global GDP. A figure that will continue to rise in the coming years’ writes Hitoshi Tanaka.

In regard to US and China, Daniel Drezner talks of the former and later respectively as ‘a declining hegemon with the willingness but not the capability to act as the global leader, combined with a rising power with the capability but not the willingness to act as a global leader’.
I would add that the rise of Arab states such as United Arab Emirates and Qatar with their burgeoning financial muscle from oil wealth have added another dimension to the global balance of power scene. Arab financiers have bought a handful of English Premiership football clubs such as Manchester City and Portsmouth. It was reported that an Arab consortium bought a stake in Germany’s Mercedes Benz group. In Uganda, telecom giants Zain and Warid are testimony to the growing financial influence of the orient in world business.

So, is US power really on the decline? The death of giants is often prematurely called.
Mark Twain was prematurely announced dead and remarked thus 'The reports of my death are greatly exaggerated’.

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