Bursting the Chinese Bubble

February 7, 2012 Topic: Economic DevelopmentGreat PowersRising Powers Region: ChinaUnited States Blog Brand: The Buzz

Bursting the Chinese Bubble

America is finished as a superpower. Or so you might think from the recent discussion in the U.S. media. Popular books lament that “that used to be us” and that the United States is committing “suicide.” Meanwhile, a majority of Americans believe that China has already passed Washington as “the leading economic power in the world today,” according to a 2011 Gallup poll.

In the latest issue of International Security, Michael Beckley argues strongly that this is all wrong—as his title, “China’s Century? Why America’s Edge Will Endure,” indicates. Beckley, a research fellow at Harvard, brings empirical facts and cool analysis to an issue often dominated by overheated rhetoric. His main target is the idea that we can measure China’s rise solely based on its rising levels of GDP.

GDP, Beckley says, “correlates poorly with national power,” noting that China “was the largest economy in the world throughout most of its ‘century of humiliation,’ when it was ripped apart by Western powers and Japan.” Instead, Beckley marshals a wide range of statistics in several categories and concludes that the United States “is now wealthier, more innovative, and more militarily powerful compared to China than it was in 1991.”

Beckley also pays close attention to demographic trends. One statistic in particular is worth highlighting: as a result of the one-child policy, it is projected that China will go from a ratio of workers per retiree of 8:1 today to 2:1 by 2040. He also cuts through the hype about China’s growing expertise in science and technology, noting that China is succeeding in producing extremely large numbers of scientists and engineers, but only at the cost of rampant falsification and copying of research.

The only downside is Beckley’s brief closing section on policy prescriptions, which is somewhat thin. Nevertheless, this is an important and notable piece that shows how rigorous academic research can inform our understanding of major policy debates.