The Chinese Century Won't Mean What Most Expect

2025-04-18 01:15:12

(MENAFN- Asia Times) Witnessing America's flamboyantly stupid economic self-harm and its slow descent into authoritarianism has made some people ask whether the 21st century will end up being the Chinese Century. New York Times columnist Thomas Friedman says yes :

Matt Yglesias also recently tweeted (and then deleted):“For the first time in my life, I really just think America may be cooked and it's gonna be the Chinese century.”

Tyler Cowen has his doubts , arguing that Chinese success free-rides on a bunch of American-provided public goods:

Surprisingly, I think Friedman is more right than Tyler here. I've written a bit about this topic over the past few years, and I think that when we look back on the 21st century, we'll probably call it the Chinese Century - or at least, the first half of it.

But the reason I say this is because what it means for a century to“belong” to a specific country will change from what it meant in the 20th - and often in ways that will not be very pleasant.

What does it mean for a century to“belong” to a country?

The 20th century often gets called the“American century”, but there's no one reason why. It's just sort of a gestalt impression that the US was the most important country during that century. There were lots of dimensions in which this was true:

The US had the largest economy in the world, and was the dominant manufacturing nation.
The US was militarily dominant, having the world's most powerful military for almost the entire century.
The US was one of the richest economies, setting the standard for what a modern lifestyle should look like.
The US was a technological leader, producing by far the largest share of the scientific discoveries, breakthrough inventions, and commercial products that changed the world.
The US was culturally dominant, through its output of movies, music, television, games, fashion, and ideas.
The US was geopolitically central; it played a key role in creating and sustaining various international institutions, created the world's largest and most powerful network of alliances, and provided global public goods like freedom of the seas.
The US was historically central, playing the most important role in shaping many of the key global events of the 20th century - the World Wars, decolonization, the Cold War, and globalization.

In fact, I would argue that our whole modern notion of assigning centuries to countries was patterned after America's unusual importance across nearly every single domain in the 20th century. It's hard to think of other historical examples where one country has had such broad-spectrum dominance.

The closest comparison has got to be Britain in the 19th century, which gave birth to the Industrial Revolution and built a globe-spanning empire. But even the UK was never as militarily or culturally dominant as America was in the 20th century.

As for older comparisons, only the Mongol Empire in the 13th and early 14th centuries really measures up. The globe was usually just too fragmented, and technological progress too slow, for one country or empire to overshadow all the others. Even the Roman Empire, the Abbasid Caliphate and the Tang Dynasty were more regional superpowers than global ones.

Anyway, the point here is that there's no reason that we should believe, a priori, that the 21st century will be dominated by anyone the way America dominated the 20th. The historical norm is multipolarity, with different countries and empires having modest leads in various different dimensions for various periods of time.

Now, you can argue that globalization and continuous technological progress are both here to stay, meaning that future centuries are permanently more likely to have one dominant country. I think that's probably true to some extent. But as I'll explain, I also think that the nature of both globalization and technological progress are changing in ways that will bias the 21st century toward multipolarity.

And some of these changes will result from the power transition from the US to China. Simply put, 20th-century America invented the game that it won, whereas China will use its power to invent (and win) a different sort of game.

China's greatness will be different from America's greatness

You might be surprised to hear this, but I actually think China and the US are very culturally similar, rather than representing distinct, alien poles of“Eastern” and“Western” civilization.1 But I'm not much of a cultural determinist; I think technology and institutions tend to matter more. Here, the differences outweigh the similarities.

One area where China already far surpasses America is in state capacity. This is from a post I wrote back in 2023 :

The US used to have much higher state capacity than it does now, back in the middle of the 20th century - it was able to outproduce all other nations during World War 2, build the interstate highway system, and so on. But modern Chinese state capacity vastly exceeds even America's peak.

What other nation could have maintained the kind of draconian, micro-managed Covid lockdowns that China kept all the way through 2022? Of course, past a certain point, these lockdowns were probably counterproductive, and they were certainly dystopian . But they were certainly a demonstration of the awesome power of the Chinese party-state.

China is also bigger than the US, and so if its economy continues to mature, it will eventually be even more economically dominant. The UN predicts that by 2030, China will represent 45% of all global manufacturing, higher than the US ever achieved, except for a brief moment after World War 2.

But also recall that manufacturing is falling as a percent of China's GDP , as service industries grow. So unless China somehow turns out to be uniquely weak in the service sector, we can probably expect its overall economic dominance to be just as big as America's was, or bigger.

Nor do I think the loss of US export markets will hurt China much. Tyler asks:“Where will China sell the rising output from their factories?” The answer to that question is“China.” Contrary to popular belief, China is not that export-intensive of an economy, compared to the likes of France, Germany or South Korea:

Source: World Bank

China had a brief period of export-oriented growth in the 2000s, but that's basically over. Now, China sells most of what it produces to Chinese people. Even the vaunted“Second China Shock” is mostly an overflow phenomenon; for example, China has become the world's top car exporter, but the vast majority of the vehicles it makes are for domestic consumption.

Source: Brad Setser

In this sense, China is becoming more like the 20th-century US - a very large economy that has some prominent exports but is fundamentally domestically focused. Lack of demand from America is highly unlikely to cripple or even substantively reduce China's economic progress, especially as the Chinese economy shifts to services.

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