China is wrong in thinking that the United States faces inevitable decline. Report Ft
The elites in China think the United States is in irreversible decline. But this is not the case, writes the Financial Times
The Chinese elite is convinced that the United States is in irreversible decline. So reports Jude Blanchette of the Center for Strategic and International Studies, a respected Washington think-tank. What has happened in the United States in recent years, particularly in politics, supports this perspective. A stable liberal democracy would not have elected Donald Trump – a man lacking all the necessary qualities and skills – to national leadership. However, the US notion of decline is exaggerated. The United States retains large resources, particularly in economics.
For a century and a half, the United States was the most innovative economy in the world. This has been the basis of his global power and influence. How does its innovative power appear today? The answer is: pretty good, despite competition from China.
Stock markets are imperfect. But the value investors place on companies is at least a relatively unbiased assessment of their prospects. At the end of last week, 7 of the 10 most valuable companies in the world and 14 of the top 20 were based in the United States – writes Martin Wolf in the FT .
If it weren't for Saudi Arabian oil, the five most valuable companies in the world would be US tech giants: Apple, Microsoft, Amazon, Alphabet and Facebook. China has two valuable tech companies: Tencent (in seventh place) and Alibaba (in ninth). But these are the only Chinese companies in the top 20. The most valuable European company is LVMH in 17th place. Yet LVMH is just a collection of established luxury brands. This should worry Europeans.
If we look only at tech companies, the US has 12 of the top 20; China (with Hong Kong but excluding Taiwan) has three; and there are two Dutch companies, one of which, ASML, is the largest manufacturer of machines that make integrated circuits. Taiwan has Taiwan Semiconductor Manufacturing Company, the world's largest contract computer chip maker, and South Korea has Samsung Electronics.
Biosciences is another crucial area for future prosperity. Here are seven European companies (with Switzerland and the UK included) in the top 20. But the US has seven of the top 10, and 11 of the top 20. There is also an Australian and a Japanese company, but no Chinese companies.
In summary, US companies are dominant globally, and nearly all of the most valuable non-US companies are based in allied countries.
This equity-based approach evidently excludes Chinese state-owned enterprises, as well as unlisted Huawei, the world leader in telecommunications equipment. China claims leadership in other areas, notably high-speed rail. But the origin of that technology is elsewhere. Rather, China's success in rail and many other areas is in building infrastructure quickly and on a large scale.
It could be argued that dominant US companies are no longer young. In addition, the US tech giants have bought many companies created elsewhere. Yet this is certainly one of their strengths.
Furthermore, the United States continues to lead the way in venture capital. According to Dealroom, venture capital investments totaled $ 487 billion from 2018 to the first quarter of 2021 in the United States, compared to $ 379 billion in China, the United Kingdom, India, Germany, France, Canada, Israel and the United States as a whole. Singapore. Also in relation to GDP, US investment only came behind Israel and Singapore. In international patent filings, China was first in 2019, with 59,045 versus 57,705 in the United States. But the rest of the top 10 countries were allies of the United States. Combined with the United States, their patent filings totaled nearly 175,000.
Universities are also important. In a well-known ranking, 5 of the top 10 and 10 of the top 20 universities are American and only one is Chinese. Furthermore, as Richard McGregor argues in his excellent book Xi Jinping: The Backlash, centralized control in China is getting tighter and tighter. Such control never favors sustained originality.
Overall, the US picture is hardly one of a collapse into economic irrelevance, especially when combined with its allies. While China will soon have the largest economy in the world by all measures, it will still not be the most productive or innovative.
The biggest threat to the US role in the world lies in itself, not in China. If it elects leaders who despise democracy, ethnic diversity, global alliances, science and reason, it will surely decline. The failure of the Republicans to repudiate the former president makes this more likely. But this would be the self-inflicted result of a failure to create a shared vision of a better future.
The Chinese elites would then be right in saying that the United States is on the road to ruin. But they may still be wrong to believe that their direction is better. Putting 1.4 billion intelligent human beings under the control of one party, controlled by one man, cannot be the best way.
A great asset of the United States has been its ability to attract the best and brightest in the world. Two men born in India now run Microsoft and Alphabet. One of Google's two co-founders was an immigrant from the Soviet Union. The nativism now on display goes against this. But diversity, within a framework of shared institutions and values, could still be a huge source of vitality in the strength of the United States in business, culture and politics.
The United States is unlikely to remain the dominant power in the world, simply because the Chinese population is more than four times as large. However, as long as the United States remains democratic, free and open, it has a good chance of remaining the most influential country in the world in the future. If he decides instead to be what his reactionaries want, he will fail. But this would be his choice, not his fate.
(Extract from the press review of Epr )
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/cina-declino-stati-uniti/ on Sun, 02 May 2021 06:00:50 +0000.