Why the US Will Still be the Only Superpower in 2030, v2.0

One of the most popular dinner party conversation topics is the possibility that the United States will be joined or even surpassed as a superpower by another nation, such as China.  Let us assess the what makes a superpower, and what it would take for China to match the US on each pillar of superpowerdom.  Two years ago, in May 2006, I wrote the first version of this article, and it became the most heavily viewed article ever written on The Futurist.  The comments section brought a wide spectrum of critiques of various points in the article, which led me to do further research, which in turn strengthened the case in some areas while weakening it others.  Thus, it is time for a tune-up on the article. 

A genuine superpower does not merely have military and political influence, but also must be at the top of the economic, scientific, and cultural pyramids.  Thus, the Soviet Union was only a partial superpower, and the most recent genuine superpower before the United States was the British Empire.  Many Europeans like to point out that the EU has a larger economy than the US, but the EU is a collection of 27 countries that does not share a common leader, a common military, a uniform foreign policy, or even a common currency.  The EU simply is not a country, any more than the US + Canada comprise a single country. 

The only realistic candidate for joining the US in superpower status by 2030 is China.  China has a population over 4 times the size of the US, has the fastest growing economy of any large country, and is mastering sophisticated technologies.  But to match the US by 2030, China would have to : 

1) Have an economy that matches the US economy in size.  If the US grows by 3% a year for the next 22 years, it will be $30 trillion in 2008 dollars by then.  Note that this is a modest assumption for the US, given the accelerating nature of economic growth, but also note that world GDP presently grows at a trend of 4.5% a year, and this might at most be 6% a year by 2030.  China, with an economy of $3.2 trillion in nominal (not PPP) terms, would have to grow at 11% a year for the next 22 years straight to achieve the same size, which is already faster than its current 9-10% rate, if even that can be sustained for so long (no country, let alone a large one, has grown at more than 8% over such a long period).  In other words, the progress that the US economy would make from 1945 to 2030 (85 years) would have to be achieved by China in just the 22 years from 2008 to 2030.  Even then, this is just the total GDP, not per capita GDP, which would still be merely a fourth of America's. 

The subject of PPP GDP arises in such discussions, where China's economy is measured to a larger number.  However, this metric is inaccurate, as international trade is conducted in nominal, not PPP terms.  PPP is useful for measuring per capita prosperity, where bag of rice in China costs less than in the US.  But it tells us nothing of the size of the total economy, which could be more accurately measured in commodities like oil or gold.  Nonetheless, in per capita GDP, the US surpasses any other country that has more than 10 million people (and is thus too large to rely solely on being a tax haven or tourist destination for GDP generation).  From the GDP per capita chart, we can see that many countries catch up to the US, but none really can equal, let alone surpass, the US.  An EU study recently estimated that the EU is 22 years behind the US in economic development.  The European Chamber of Commerce estimated that the gap between the EU and US was widening further, and that it would take 75 years for the EU to catch up to the US.  Again, these are official EU studies, and are thus not 'rigged by America'.         

The weak dollar leads some who suddenly fancy themselves as currency experts to believe/hope that the US will lose economic dominance.  However, we see from this chart that the US dollar comprises a dominant 65% of global currency reserves (an even greater share than it commanded in 1995), while the second highest share is that of the Euro (itself the combined currency of 21 separate countries) at just 25%.  Furthermore, the Euro is not rising as a percentage of total reserves, despite the EU and Eurozone adding many new member nations after 2001.  Which currency has any chance of overtaking the US, particularly a currency that is associated with a single sovereign nation?  The Chinese Yuan represents under 2% of world reserves, and China itself stockpiles US dollars.  Clearly, US dominance in this metric is enormous, and is not dwindling in the forseeable future. 

2) Have a military capable of waging wars anywhere in the globe (even if it does not actually wage any).  Part of the opposition that anti-Americans have to the US wars in Afghanistan and Iraq is the envy arising from the US being the only country with the means to invade multiple medium-sized countries in other continents and still sustain very few casualties.  No other country currently is even near having the ability to project military power with such force and range, despite military spending being only 3% of US GDP - a lower proportion than many other countries.  Mere nuclear weapons are no substitute for this.  The inability of the rest of the world to do anything to halt genocide in Darfur or other atrocities in Burma or Zimbabwe is evidence of how such problems can only get addressed if and when America addresses them.

3) Create original consumer brands that are household names everywhere in the world (including in America), such as Coca-Cola, Nike, McDonalds, Citigroup, Xerox, Microsoft, or Google.  Europe and Japan have created a few brands in a few select industries, but China currently has almost none.  Observing how many American brand logos have populated billboards and sporting events in developing nations over just the last 15 years, one might argue that US cultural and economic dominance has even increased by this measure.

4) Have major universities that are household names, that many of the worlds top students aspire to attend.  17 of the world's top 20 universities are in the US.  Until top students in Europe, India, and even the US are filling out an application for a Chinese university alongside those of Harvard, Stanford, MIT, or Cambridge, China is not going to match the US in the knowledge economy.  This also represents the obstacles China has to overcome to successfully conduct impactful scientific research. 

5) Become the center of gravity for all types of scientific research.  The US conducted 32% of all research expenditures in 2007, which was twice as much as China, and more than the 27 combined countries of the EU.  But it is not just in the laboratory where the US is dominant, but in the process to deliver innovations from the laboratory to the global marketplace.  To displace the US, China would have to become the nation that produces the new inventions and corporations that are adopted by the mass market into their daily lives.  From the telephone and airplane over a century ago, America has been the engine of almost all technological progress.  Despite the fears of innovation going overseas, the big new technologies and influential applications continue to emerge from companies headquartered in the United States.  Just in the last four years, Google emerged as the next super-lucrative company (before eBay and Yahoo slightly earlier), and the American-dominated 'blogosphere' emerged as a powerful force of information and media.  Even after google, a new batch of technology companies, this time in alternative energy, have rapidly accumulated tens of billions of dollars in market value.  It is this dominance across the whole process of university excellence to scientific research to creating new companies to bring technologies to market that makes the US innovation engine virtually impossible for any country to surpass. 

6) Attract the best and brightest to immigrate into China, where they can expect to live a good life in Chinese society.  The US effectively receives a 'education import' estimated to be above $200 billion a year, as people educated at the expense of another nation immigrate here and promptly participate in the workforce.  As smart as people within China are, unless they can attract non-Chinese talent that is otherwise migrating to the US, and even talented Americans, they will not have the same intellectual and psychological cross-pollination, and hence miss out on those economic benefits.  The small matter of people not wanting to move into a country that is not a democracy also has to be resolved.  The true measure of a country is the net difference between how many people seek to enter, and how many people seek to leave.  The US has a net inflow of immigrants (constrained by quotas and thus a small fraction of the unconstrained number of people who would like to enter), while China has a net outflow of native-born Chinese.  Click on the map to enlarge it, and see the immigration rate to America from the world (which itself is constrained by quotas in the US and forcible restrictions on fleeing the country in places like Cuba and North Korea. 

7) Be the leader in entertainment and culture, which is the true driver of societal psychology.  China's film industry greatly lags India's, let alone America's.  We hear about piracy of American music and films in China, which tells us exactly what the world order is.  When American teenagers are actively pirating music and movies made in China, only then will the US have been surpassed in this area.  Take a moment to think how distant this scenario is from current reality.  Which country can claim the title of #2 in entertainment and cultural influence?  That such a question cannot easily be answered itself shows how total US dominance in this dimension really is. 

8) Be the nation that engineers many of the greatest moments of human accomplishment.  The USSR was ahead of the US in the space race at first, until President Kennedy decided in 1961 to put a man on the moon by 1969.  While this mission initially seemed to be unnecessary and expensive, the optimism and pride brought to anti-Communist people worldwide was so inspirational that it accelerated many other forms of technological progress and brought economic growth to free-market countries.  This eventually led to a global exodus from socialism altogether, as the pessimism necessary for socialism to exist became harder to enforce.  People from many nations still feel pride from humanity having set foot on the Moon, something which America made possible.

China currently has plans to put a man on the moon by 2024.  While being only the second country to achieve this would certainly be prestigious, it would still be 55 years after the United States achieved the same thing.  That is not quite the trajectory it would take to approach the superpowerdom of the US by 2030.  If China puts a man on Mars or has permanent Moon bases before the US, I may change my opinion on this point, but the odds of that happening are not high. 

9) Be the nation expected to thanklessly use its own resources to solve many of the world's problems.  It is certainly not a requirement for a superpower to be benevolent, but it does make the path to superpower ascension easier, as a malevolent superpower will receive even more opposition from the world than a benevolent one, which itself is already substantial.  If the US donates $15 billion in aid to Africa, the first reaction from critics is that the US did not donate enough.  On the other hand, few even consider asking China to donate aid to Africa.  After the 2004 Indian Ocean tsunami and the 2008 cyclone in Burma, the fashionable question was why the US did not donate even more and sooner, rather than why China did not donate more, despite being geographically much closer.  Ask yourself this - if an asteroid were on a collision course with the Earth, which country's technology and money would the world depend on to detect it, and then destroy or divert it?  Until China is relied upon to an equal degree, it is not in the same league. 

10) Adapt to the underappreciated burden of superpowerdom - the huge double standards that a benign superpower must withstand in that role.  America is still condemned for slavery that ended 140 years ago, even by nations that have done far worse things more recently than that.  America's success in bringing democracy to Afghanistan and Iraq, and defending local populations from terrorists, is condemned more than the UN's inaction in preventing genocide and slavery.  Is China prepared to apologize for Tianenmen Square, the genocide in Tibet, the 30 million who perished during the Great Leap Forward, and the suppression of news about SARS, every day for the next century?  Is China remotely prepared for being blamed for inaction towards genocide in Darfur while simultaneously being condemned for non-deadly prison abuse in a time of war against opponents who follow no rules of engagement?  The upcoming 2008 Olympics will be an event where political demonstrations are going to grab headlines perhaps to a greater degree than the sports themselves, and the Chinese leadership will be tested on how they deal with simmering domestic discontent under the scrutiny of the world media.  The amount of unfairness China would have to withstand to truly achieve political parity with America might be prohibitive given China's history over the last 60 years. 

Economically, is China prepared to withstand the pressures that the US presently bears?  How long before the environmental movement (at least the fraction of it that is actually concerned about the environment) recognizes that China is a bigger polluter of the atmosphere than the US is, and that the road to pollution reduction leads straight to China?  How long before China is pressured to donate aid to Africa in the manner that the US does?  What happens when poorer nations benefit from Chinese R&D expenditures, particularly if those are neighboring countries that China is not friendly with? 

Furthermore, China being held to the superpower standard would simultaneously reduce the burden that the US currently bears alone, allowing the US to operate with less opposition and more equitable treatment than it experiences today.  Is China prepared to take on the heat?  Arguably, there is evidence that the Chinese public has not even begun to think that far. 

Of the ten points above, Britain, France, Germany, and Japan have tried for decades, and have only achieved parity with the US on maybe two of these dimensions at most.  China will surpass European countries and Japan by 2030 by achieving perhaps two or possibly even three out of these ten points, but attaining all ten is something I am willing to confidently bet against.  The dream of anti-Americans who relish the prospect of any nation, even a non-democratic one, surpassing the US is still a very distant one. 

A point that many bring up is that empires have always risen and fallen throughout history.  This is partly true, but note that the Roman Empire lasted for over 1000 years after its peak.  Also note that the British Empire never actually collapsed since Britain is still one of the most successful countries in the world today, and the English language is the most widely spoken in the world.  Britain was merely surpassed by its descendant, with whom it shares a symbiotic relationship.  The US can expect the same sort of very long tail if it is finally surpassed, at some point much later than 2030 and probably not before the Technological Singularity, estimated for around 2050, which would make the debate moot.   

That writing this article is even worthwhile is a tribute to how far China has come and how much it might achieve.  I would not bother to write such an article about, say, India or Germany (the largest of the 27 EU countries).  Nonetheless, there is no other country that will be a superpower on par with the US by 2030.  This is one of the safest predictions The Futurist can make. 

Related :

The Winds of War, the Sands of Time

Who Hates America?

Who Does America View Favorably?

The Age of Democracy

The Culture of Success

Comments

[jeffolie]

I started the following thread at a different site on June 3rd:

--------------------

I have seen the fall of an empire (an evil empire) and a trading empire (Japan). At the peak of their prowse, the world trembled at the empires' sucesses. Those empires fell dramatically over about a 4 year decline.

I predict that the Chinese commercial sucess will fall, perhaps over a 4 year period also. I am not stating that the Chinese have peaked already. The seeds of their fall are built into the growth of their current sucess.

The Chinese are morally bankrupt, politically and economically. Communism is a broken model. Corruption is throughly engrained in its economy. Communist China treats the Chinese like dirt.

Even as the US will go through crisis, the US model is not completely broken. The US, IMHO is going to get worse, but the US will adapt as it has adapted to its 4 depressions and survived to come out strong. When Communist China falls, there is a good chance that it will take 50 years for it to politically and economically return to 1st world status.

China's fall and decline is coming. It certainly will not peak before the Olympics. There is a chance that the Olympics will be Communist China's only moment of sunshine in history.

[stalker]

"Have an economy that matches the US economy in size. If the US grows by 3% a year for the next 22 years, it will be $30 trillion in 2008 dollars by then...China, with an economy of $3.2 trillion in nominal (not PPP) terms, would have to grow at 11% a year for the next 22 years straight to achieve the same size, which is already faster than its current 9-10% rate, if even that can be sustained for so long (no country, let alone a large one, has grown at more than 8% over such a long period)."

This is a very flawed argument.

Why?

Because the growth rates you used are for PPP GDP growth.

According to the IMF, in 2000 China's (nominal) GDP was 1.2bn $ and in 2007 was 3.2bn $. This means China's nominal GDP has been growing at 15%.

Now considering that nominal GDP tends to converge to PPP GDP as countries get richer, and that China's potential for this is very big (it's real GDP is more than twice as big as its nominal, at around 7bn $), growth of 11% for the next 22 years (in nominal GDP) is entirely feasible.

As for 4) (universities), rankings are all subjective and tend to be weighted towards the Anglo-Saxon and particularly US (e.g. because one of the criterions used is, say, publications in the journal Nature). I've come across a study by one of those ranking organizations which showed that by knowledge and problem solving skills after graduation in scientific areas, the top three universities were Japanese, and the fourth was Moscow State. Fifth was MIT. And so on. In other words the only decisive advantage American universities have is that a) they have more money to spend on attracting "star" researchers / Nobel Prize winners and b) have more chances of being published in US academic journals.

For the other side of the education coin you might want to analyze, say, US scores in the international PISA tests.

BTW, I did a similar exercise on [ur=http://darussophile.blogspot.com/2008/01/core-article-towards-new-russian.html]future superpowers[/url].

My basic conclusion is that by 2030 China and the US will be evenly matched, with Russia as the third "swing" superpower.

[stalker]

One more thing, GK, how do you link to stuff without writing out the whole link on typepad? Thx.

[jeffolie]

I have been troubled by the rapid exploitation of the Chinese by its leaders for as long as I can remember. I watched a PBS program on 'illicit trade' last night. The Chinese leaders approach to sending out poison products was to kill one fiquirehead and eventually close a dozen plants whose products resulted in deaths. So, I decided to post a thread today on Communist China.

I noticed over the last one year that China's money supply and inflation were growing very rapidly. Their response was to raise bank reserves and rates modestly. The Chinese post inflation rate is far more reflective of real price increases than ours. The Vietnamese inflation rate is stated by them to be 25% and they are the leading buyers of gold. The Chinese leadership has negative real interest rates. They are trying to suppress their inflation by raising the value of the Yuan. That allows the Chinese to purchase more with their appreciating currency. Their exports will suffer and the combination of inflation and suffering exports will stress their corrupt system.

The Communist Chinese leadership's management of Tibet and the earthquake is sowing discontent. This may cause cracks in the popular support for the Communists.

There is a growing Islamic presence in China. About 10% of the Chinese are now Islamic.

The aftermath of the Olympics will be an economic letdown as government expenditures on the Olympics cease.

All of the above are going to be cracks that may develop in to significant aspects of the fall and decline of Communist China over a period of years.

China is a cheap, fake economy. It will fall apart as quickly as the crap they manufacture. Its political, legal and banking systems are all rubbish. It is none of the elements that made, say, the US the economic superpower that it was... and may be again.

I suspect that China will never get more than 40% of her people into the "haves" social classes. Maybe 10% rich and 30% middle class. Tops. The rest of the Chinese will probably get really really pissed off. The whole thing will derail.

--------------------

China faces inflation close to a 12-year high and cooling global demand abroad for the products it makes. The report shows that the People's Bank of China regards rising prices, a problem exacerbated by last month's earthquake, as the bigger threat facing the world's fastest-growing major economy. A stronger yuan would help by reducing the cost of imported goods. "We do expect an increase in the pace of appreciation of the yuan through the balance of the year,"

"Large-scale reconstruction of buildings, roads and other infrastructure in the earthquake zones may push fixed-asset investment growth higher," the bank said. "The impact on consumer prices may be short-term, but one should not ignore the impact on upstream producer prices as demand increases in the near future for cement, steel, copper, aluminum and other construction materials needed for reconstruction."

Controlling inflation will be "tough" this year because of higher costs for energy and labor, rising grain prices and the risk that rebounding loan growth will fuel demand.

http://www.latimes.com/business/la-fi-chinabank3-2008jun03,0,3083634.story

[GK]

stalker,

China has benefited from having its economy appear to grow even faster than it is due to an appreciation of the Yuan. These are one-time benefits, that do not occur each year.

Also, as prosperity is reached, the growth rate slows. There is no chance of China's economy growing at double-digit rates in the 2020s. Taiwan and South Korea would still be growing at that rate if it were possible (see the line chart).

Universities - Another measure is how many foreign students flock to a school. I don't see Americans (or third parties) going to Moscow State in the manner than we see Russians going to MIT.

Russia : I know you have a soft spot towards Russia, but Russia will not be a third 'swing' power by 2030. Russia's population in 2030 will be one third of America's, one third of Indonesia's, and one twelfth of India's. Russia's economy will be much smaller than India's. Read the link early in the article on how simply having many nuclear weapons does not make one a superpower. Russia is a powerful country, but I don't see how it could be any higher than #4 (if that) in 2030. Note the R&D pie chart that shows Russia to be conducting negligible R&D.

Typepad : You have to type "a href" code. Go to 'View' and 'Source' in your browser to see examples.

[Saul Wall]

I like the article and its premise has not deteriorated over time.

But I would actually see India as closer to being a superpower by your definition than China. Indian cinema and TV has a far greater global penetration than Chinese culture and while its economy and military is not as strong as China's, India has more influence on world affairs in many respects than does China due both to it's connections to the old English empire and the new American one. India has many speakers of the language of the real major superpower. It has the population, the economic promise, the expertise and the resources needed as well as the (relative) openness to the world needed to start playing in the superpower's junior league. China needs work on more aspects than India even if China is farther along on some measures.

But then, the opportunity for economic collaboration and mutual gains in experience and investment dollars could cause China and India to be less of an "either/or" and more of a "both/and" issue.

But America, having the top spot for some considerable time, is an excellent outcome for world events. We will all be better off for America's leadership and innovation in the world, even if many of us are loathed to admit it.

[stalker]

@GK,

1. On China/US: Look at it from another perspective. What you did in the article was compare nominal GDP's for the US and China, but used real GDP growth rates to see how fast China could catch up. This is apples and oranges.

The proper calculation would be to note that in 2007 China's PPP GDP was 7.0bn $, and so to catch up with the US at 30bn $ in 2030 it would have to grow at only 6.5% per annum.

That is perfectly doable. China's PPP per capita GDP is comparable to South Korea's in 1986 (IMF). From 1986 to 2006, South Korea grew at 8.0% in per capita terms. And South Korea suffered from many of China's problems - corruption, environmental degradation, etc.

2. China's nominal GDP growth will almost certainly be much quicker than its real GDP growth. Its currency is very undervalued and in any case nominal GDP tends to converge to real GDP as a country gets richer - potential in this area is very far from exhausted.

3. I never argued growth wouldn't slow as China will get richer. By the time it does slow, however, China will have long since surpassed the US in absolute size.

4. MIT has a "residual" reputational advantage, as with many other Western universities. (Incidentally third-parties do go to MSU, e.g. it's very popular with Indians. The reasons few Americans go is because they have a lot of good universities in the US where people speak English and have a similar culture).

5. Actually people who are observing demographic trends in Russia would dispute your forecasts (which depend on linear extrapolations of trends existing in the 1990's and don't allow for such things as rising life expectancy, etc). The rate of natural decrease fell to -0.17% in 2007 and will be less this year as the birth rate recovers and death rates fall (part of a continuing trend since 2005).

But actually Russia's population is pretty much irrelevant. It's key trump card is that it has a combination of advantages:

* will have plentiful energy resources in the interval between costly, diminishing hydrocarbons (from 2010) to plentiful clean solar/wind energy (2030-50), and has the military strength to defend them

* has an economy that will likely converge to an advanced status between 2020 and 2030

* will become a major transportation hub and will get more living space due to global warming, even as most of the rest of the world suffers

On R&D, Russia spends 1.2% of its GDP (as of 2004 - now its very likely higher, due to the recent big investments into nanotechnologies), which is quite poor compared to the US or Japan, but respectable compared with some rich countries (like Italy or Spain), and miles ahead of east-central Europe (typically 0.1-0.5%). So that's not a major barrier to economic convergence.

BTW, its GDP was about 2.1bn $ in 2007, so its spending on R&D was around 25bn $ in 2007 - not that negligible compared to UK (40bn $), Korea (38bn $), India (42bn $), etc.

6. I'm skeptical about India (as compared with China). It might be democratic but that won't buy you guns or butter. Its predicted investment in infrastructure in the next ten years is less than a third of China's (similar population) and not much more than Russia's (1/7 of the population). While it lags China in economic development by perhaps ten years, in social development it lags by several decades (e.g. a large portion of the population is still illiterate). I can only conclude that India's power at least in the medium-term is going to continue declining relative to China's.

7. Perhaps I do have a soft spot towards Russia, but who do you think will get third place in 2030?

The only realistic candidate I can see is the European Union. But that would necessitate it taking up many more of the traditional attributes of a state (above all a united foreign and military policy), which I guess is possible but not that likely.

[Al Fin]

Interesting followup to an important article. In the past 2 years we have seen significant problems in the Chinese system beginning to be exposed.

Toxic exports of toys, pharmaceuticals, cosmetics, toiletries, foods, water, and air, have made China the pollution/poison capital of the world.

Chinese building inspectors approve massive concrete structures built without the necessary steel reinforcement. Such buildings collapse and kill schoolchildren. Concrete towers for transmission lines collapse, knocking out power for tens of millions and more. Those are marks of a third world country.

Political prisoners used as human organ farms. Political dissidents disappearing for many years, or forever--as in Castro's Cuba, or Stalin's USSR.

China is becoming a world resource hog in its impossible drive to maintain its corrupt and Potemkin style of economic growth. But one cannot build a huge infrastructure on an unstable foundation.

China has risen quickly due to outside investment seeking rapid growth. As the growth curve for China flattens, the outside "growth" investment will go looking elsewhere.

[GK]

Saul Wall,

India does have a lot fewer structural problems than China, but at the moment is so far behind, that it won't recover lost ground by 2030. Even at current growth rates, it would take 15 years for India to get to where China is today, economically.

Al Fin,

Absolutely. There are only so many cracks that can be papered over. The Olympics will have one embarassment after another for China. As growth slows down to just 6-7% due to the law of large numbers, China's other problems will become more visible.

stalker,

You would be hard pressed to find any non-Russian who thinks Russia will be the #3 superpower in 2030. Even the USSR was not really a full superpower, as was later revealed.

Regarding the advantages of Russia you state :

Russia has a lot of natural resources, but that only goes so far. Canada, Brazil, Africa, and the Persian Gulf also have hydrocarbons, and the latter three much higher solar intensity than Russia.

Population : The decline may have slowed due to greater Islamic birth rates, but Russia's population in 2030 will still be outside the top-10.

Living space : Even the US has very low population density relative to most countries, so there will not be a shortage of living space in the US, Canada, Australia, etc.

Major transportation hub : The only real opportunity is the trans-Siberian railway to ship goods from China to Europe. This is minor, and is not a major revenue stream. Panama did not become super-rich due to the Panama Canal.

India : Illiteracy is concentrated among older people. About 90% of children under age 10 are now in school. Even if 20% are still illiterate in 2030, that is still 80% that are literate, and 80% of 1.4 Billion is a lot. Don't forget the Indian diaspora of 30 million, which has a lot of wealth.

India produces 3 million college graduates a year, soon to rise to 5 million. It still won't be #2 in 2030, but will be #3.

[jipi]

So many flaws in your article, selecting the criterias that proves your point, backed by (sometimes questionable) selective data.

Plus, at least 8 out of your 10 points are directly linked to the first: money.

One major economic crisis in 20 years and here goes the rest. Economy already in shaky grounds I might add. Granted, if it happens now, most of the western world will collapse with it. But Europe and Asia are more and more turning the back on US investment.

I am not saying that the US are doomed, but the America #1 speech is long gone. Your historic industry is crumbling (cars,metal,...etc), the whole world is fleeing American influence like pest, the worst health care of the western world, the worst school education (pre-univ) and you are responsible for half of the crisis worldwide (pollution, wars,...etc).

I am not anti-american at all, but its about time to stop speech like this, Americans need to wake-up, your empire is declining...fast.

For me, it is really unlikely that the US will be the only superpower by 2030. Not on this path...

...Unless they liberate the shit out of the world, like they did in Irak.

[stalker]

"You would be hard pressed to find any non-Russian who thinks Russia will be the #3 superpower in 2030."

Not really. In fact 37% of the global community (and 59% of Russians) think Russia will be a "world power" in 2020, which is third after the US (61%) and China (57%). India is substantially lower, and both EU and Japan are ahead.

* Africa and Persian Gulf are politically fractured, don't have a significant industrial base and cannot be said to have sovereign foreign policies (the big exception, Iran, is contained). Canada and Brazil are far away from Eurasia and of little importance geopolitically.

* Actually about 75% of Muslims in Russia have a demographic profile similar to that of ethnic Russians. The rest (southern Muslim ethnic groups) have birth rates that are rapidly declining as those regions undergo a demographic transition.

Secondly, as a "Singularitarian", I find your emphasis on population hard to understand. With the growth of nanotechnologies and AI it is going to become increasingly irrelevant.

* There will however be shortages of living space in China, India, South-East Asia, Egypt, etc, as sea levels rise. If its significant, parts of Europe (Netherlands) and the US (Florida, Louisiana) are also going to be hit. The only significant part of Russia that is at any risk is St.-Petersburg. It also won't help if the breadbasket Great Plains become desertified.

* Transportation: not only the railway. The Arctic is melting. The North-East passage if shorter from Yokohama to Rotterdam by 4000km than by the Malacca-Suez route (and less prone to bottlenecks / security risks). It will also open up big new hydrocarbons deposits off the Siberian shelf at the same time as the rest of the world is suffering from peak oil.

* India - that may be but even on universities its tertiary enrolment rate is at 11% (World Bank), which is very far from the US/Europe (50-80%) and even China (21%). As for the diaspora, so what? The Chinese, the Armenians, the Irish, they all also have big diasporas. The key factor is the level of development of people in the homeland.

(I am not saying India has no potential to be a superpower, btw - it does - but it won't do it in the medium term. That would have to wait until at least 2050).

[GK]

Jipi,

Your comment actually PROVES points 9) and 10) of my article.

You obsess over Iraq (where America and Britain are doing good things), yet have no problem with atrocities in Darfur, Burma, Zimbabwe, Tibet, North Korea, etc. Why? Because you are obsessed with seeing evil only in America, which itself is the byproduct of the US being so dominant as to invite irrational envy.

So you have proved points 9) and 10) quite well.

Your historic industry is crumbling (cars,metal,...etc)

The US dominates in new industries, like Internet and Biotech. Read the article.

the whole world is fleeing American influence like pest,

Wrong. France, Germany, and Italy all elected pro-US leaders. Even developed countries have many people immigrating to the US (see the map in the article).

the worst health care of the western world

Wrong. Canadians come to the US for appointments, because it takes 3 months to get on in the US. In France, 15,000 died from a heat wave in 2003 due to poor health care response.

and you are responsible for half of the crisis worldwide (pollution, wars,...etc).

Wrong again. China emits more pollution than America (see article). America has liberated more people from tyranny than all other countries combined.

So much ignorance in one post. Again, your blind gullibility to anti-US propaganda which is already refuted in the article merely PROVES points 9) and 10) of the article.

[GK]

stalker,

1) Russia is a 'world power' even today. So are Britain, France, Germany, Japan, and India. But a 'world power' is not a superpower. Plus, 2020 vs. 2030 is a significant difference.

2) Muslim birth rates may be declining in Russia, but are still much higher than ethnic Russians, and will be that way for a long time. 2.5 for Chechens, Tajiks, or Turkmen vs. 1.5 for Russians is a huge gap.

3) Secondly, as a "Singularitarian", I find your emphasis on population hard to understand.

Transhumanism happens well after 2030. We are talking about 2030. At any rate, if population is irrelevant, China's strongest point on becoming a superpower diminishes, ensuring America's #1 spot.

4) Population : A shortage of living space in China and India leads them to move to the US, Canada, and Australia. In the US, Florida, etc. still have very low population densities relative to Europe. Texas alone could accomodate 100 million people and still be less dense than New Jersey or the UK.

In fact, depopulation of Siberia and Yakutsk/Kamchatka make them vulnerable to Chinese annexation (which I don't want to happen any more than you do).

5) It will also open up big new hydrocarbons deposits off the Siberian shelf at the same time as the rest of the world is suffering from peak oil.

The same goes for Canadian and American Arctic zones.

The fact remains, Russia's economy will be no larger than #7 or #8 by 2030. Your own point about PPP GDP converging to nominal in fact would mean India would shoot ahead of Russia in economic size.

Population does matter too. In 2030 :

India : 1,500m
Pakistan : 230m
Bangladesh : 200m
Russia : 140m.

So Russia would have to have a per capita GDP 10X that of India to have an economy the same size. Unlikely.

I like Russians (particularly the women) a lot. But being one of 8-10 world powers (which both India and Russia already are) vs. being a Superpower (which neither will be by 2030) are two very different things.

Right now, Russia is about 2.5% of nominal world GDP. You tell me : In 2030, what percent of nominal world GDP will it be?

I think a country has to be at least 15%, ideally 20% of nominal world GDP to seriously entertain calling itself a superpower.

[Michael]

China's rise has been been fueled by creating a manufacturing based export economy. What happens to China's growth when transportation costs exceed labor? What happens to China's economy when people realize it is cheaper to manufacture items in the depressed prairie states along established transportation hubs as opposed to across the Pacific?

[jeffolie]

When will the docile Chinese rise up and modify their Communist dictatorship?

The pollution is a disaster, the Communists are corrupt and the only truth in China is the Communists tells lies until a disaster forces out the truth into the light.

The history of other Communist governments is that they last for many decades, but none has lasted 100 years and none will. China will fall from its own internal rot. It will not be the next superpower.

[anon]

GK, I followed your original article up to this one, and you did not disappoint! Very little has changed, if any, since the original article. I think anti americanism has continued its upward trend, however, I think that speaks absolute volumes as to how dominant the US really is.

I think one thing that is important to remember, is how important a strong dollar is. I do agree that a weak dollar has its benefits, but it also has its disadvantages. I am sure I do not need to list such disadvantages, as we all should be aware of such.

I also worry about the eco-nazis that I see in the US, where our economy could be dragged down, thanks to liberals who seem to be further left than I care to remember. If we hamper our own economic growth by giving into the environmental nuts, whilst china does not, it is all to Chinas benefit.

[jeffolie]

Shanghai Market: Cliff Diving

The Shanghai Composite Index is off over 5% tonight to 3140.

From MarketWatch: China, Hong Kong drop in reaction to new bank rule

Asian markets traded broadly lower Tuesday, led down by Shanghai and Hong Kong, where banking and property shares fronted declines as investors fretted about the impact of the latest round of anti-inflationary measures announced over the weekend.
And also from MarketWatch: China takes aim at inflation, speculative fund flows
The People's Bank of China said over the weekend that it would require banks must put aside 17% of deposits as reserves, effective June 15. A second hike to 17.5% will go into effect June 25, for a total rise of 100 basis points above the current requirement of 16.5%.

http://calculatedrisk.blogspot.com/2008/06/shanghai-market-cliff-diving.html

The Communist Chinese Shanghai market is DOWN about 50% in less than 1 year.

[jeffolie]

SAN FRANCISCO (MarketWatch) -- China hiked banks' reserve requirement ratios for the fifth time this year, taking aim at inflation and at the flows of speculative funds pouring into the country.
The People's Bank of China said over the weekend that it would require banks must put aside 17% of deposits as reserves, effective June 15. A second hike to 17.5% will go into effect June 25, for a total rise of 100 basis points above the current requirement of 16.5%

Inflation has continued to soar.

http://www.marketwatch.com/news/story/china-hikes-banks-reserve-requirement/story.aspx?guid=%7BBEDDBCDF%2DFE47%2D40AB%2D94AB%2DAD0B2B981055%7D

The fall and declina of Communist China is coming.

[GK]

Wow. We have people who ignorantly say America has *already* fallen from superpower status, not even that it would happen by 2030.

On the other hand, we have jeffolie saying that the decline and fall of China is coming.

Two polar opposites. My own position, of course, is that China will progress, have a lot of domestic unrest but transition to democracy, but will still be only the #2 in 2030, due to the higher rungs of the ladder being much harder to scale.

[jeffolie]

GK

I want China to transition to Democracy. To do that the Chinese Communist government must fall. Just as when the USSR fell, the transition will lead to a massive decline and chaos for an unpredictable period.

[GK]

jeffolie,

I think it will be a bit easier for China than for the USSR, because China already has a private sector and multi-national corporations operating there. Capitalism has already been adopted. Thus, they only have to transition to democracy, while the USSR had to transition to capitalism + democracy, which was twice as hard.

[jeffolie]

Decelerating China

After a year of record profit expansion in 2007, Chinese companies across most sectors are seeing the first signs of decelerating profit growth,...

The proportion of lossmaking companies doubled from last year to 15.4 per cent.

China's centrally administered state-owned enterprises reported the first quarterly profit decline since 2003 - when the state-owned Assets Supervision and Administration Commission was set up to reform and supervise the public sector. This was mainly due to price controls, which led to loss in the oil refining and power generation industries.

http://news.yahoo.com/s/ft/20080609/bs_ft/fto060920081051223923;_ylt=AivnuyIem8JuiN5jdHxSqnKs0NUE

There are so many state owned enterprises and state owner financial institutions which are corrupt and irresponsible, that eliminating these state owned enterprises and banks will take a financial revolution.

[anon]

The problem I see with china becoming a democracy, is the eventual break up of the Han Chinese empire. I think china becoming a democracy will see china split up into several different nations.

[jeffolie]

China's producer-price index climbs to 8.2% in May

By Chris Oliver

HONG KONG (MarketWatch) -- China's producer-price index climbed in May from a year earlier at its fastest pace in three years, as industry grappled with higher prices for oil, coal and steal. The producer-price index climbed 8.2% in May, after rising 8.1% in April, the National Bureau of Statistics said Wednesday. "The rise in the PPI threatens to feed through into sustained higher levels of CPI, even as food prices, the main contributor to the current bout of inflation, stabilize," said Jing Ulrich, chairman of China Equities at JPMorgan Securities in Hong Kong. Coal, which accounts for 70% of China's energy consumption, has doubled in price since the beginning of the year

http://www.marketwatch.com/news/story/chinas-producer-price-index-climbs-82/story.aspx?guid=%7B13D98767%2DCB39%2D4972%2D8080%2D5BDD0AF844BE%7D

No one knows how bad the inflation really is in the lying, corrupt Communist China.

[jacob]

why would the technological singularity make the point moot?

[jeffolie]

You can see the contempt and frustration in the hundred thousand+ parents of the dead school children from the earthquake. Their anger regarding the shoddy schools construction has spread to the entire country. This is but one crack in the foundation of the corrupt, lying Communist government.

-----------------------------------------------

Talk about fuel inefficiency and pollution. China a year ago exceeded the US in its emissions of CO2 ( http://www.guardian.co.uk/environment/2007/jun/19/china.usnews ) . As this corrupt government develops into a first world economy, their emissions are horrific and expanding. This must be shortening their life spans via related illnesses.

Pollution has made cancer China’s leading cause of death, the Ministry of Health ( http://www.nytimes.com/2007/08/26/world/asia/26china.html?_r=2&oref=slogin&oref=slogin ) .

------------------------------------

The catch is that China has become not just the world's manufacturer but its despoiler, on a scale as monumental as its economic expansion. A fourth of the country is now desert. More than three-fourths of its forests have disappeared. Each year, uncontrollable underground fires, sometimes triggered by lightning or mining accidents, consume 200 million tons of coal, contributing massively to global warming. A miasma of lead, mercury, sulfur dioxide, and other elements of coal-burning and car exhaust hovers over most Chinese cities.

Meanwhile, roughly 70 percent of the world's discarded computers and electronic equipment ends up in China, where it is scavenged for usable parts and then abandoned, polluting soil and groundwater with toxic metals. If unchecked, such devastation will not just put an abrupt end to China's economic growth, but, in concert with other environmentally heedless nations (in particular, the US, India, and Brazil), will cause mortal havoc in societies and ecosystems throughout the world.

The fallout

The process is already under way. Acid rain caused by China's sulfur-dioxide emissions severely damages forests and watersheds in Korea and Japan and impairs air quality in the US. Every major river system flowing out of China is threatened with one sort of cataclysm or another. The surge in untreated waste and agricultural runoff pouring into the Yellow and China Seas has caused frequent fish die-offs, and overfishing is endangering many ocean species.

The growing Chinese taste for furs and exotic foods and pets is devastating neighboring countries' populations of everything from gazelles to wolves, and turtles to parrots, while its appetite for shark fin soup is causing drastic declines in shark populations throughout the oceans http://www.csmonitor.com/2008/0319/p09s01-coop.html .

--------------------------

The Chinese population is getting older before it gets rich. Despite the overall size of its population, the imbalance between wage earners and the aged and young populations will force Beijing to make economic tradeoffs in the years head.

[jeffolie]

I changed my position on deflation more than a year ago when I predicted Stagflation. I came out with the following:

End of Financial World

2005 was the peak in Real Estate prices and the creation of mortgages. My reasoning is something like this: it will take until 2009-10 for the housing bubble to bottom; then it will take another year or so for the complex financial instruments based on the failing real estate prices to sort itself out and onto the lying, corrupt banks balance sheets; the Democrats will be creating much fiscal and Fed stimulation to offset the cratering in real estate; after 2009-10 without declining, deflating housing prices, then inflation will take off; the Fed will be slow to fight inflation and eventually raise rates while inflation soars; by 2012 rates will be high enough to choke the economy and start disinflation; Dec 21, 2012 is the day the Mayans forcasted would be the end of the world as we know it.

I believe this is a likely scenario but I am not sure of the timing.

In my humble opinion, the US system is the most adaptable in the world. The US has survived 4 depressions and will overcome eventually what I am predicting. The Chinese system looks much more brittle and will take much longer to adapt.

[Rob]

Stalker, Russia, as it was the former Soviet Union, was a "superpower" by the virtue of having less than 10,000 nuclear weapons, a massive but crumbling military force and a land mass that reach 11 time zones. It's all the perception of size and sheer strength the former Soviet Union routinely propagandized through the decades, in an apparently foolish effort to convince the world they were a superpower to be reckoned. What they didn't tell you was that its own economy was failing them badly and its leadership spending more times lavishing at dachas with entertainment than administering a gigantic country with democratic responsibilities. The Soviet Union was a failed state masquerading as a superpower. I'm concerned about today's Russia: its present leadership is charting a dangerous step back to old-style Soviet politics while going forward with its limited and consolidated capitalist system under the Kremlin's unseen hands. On the surface, it would look great and prosperous to the world's eyes but underneath, troubles and problems would fester but no one wanted to do anything about them, fearing authoritarian backlashes from the Kremlin.

The United States will exceed them all, even China by 2030 or even by 2100. Why? Because it's the most innovative, highly adaptable and competitive country in the world, supported by the diversity and creativity of peoples who came from all over the world through generations by migration.

There will still be the United States of America by 2176 AD, spearheading a new era of space colonization of the Solar System and beyond as Earth is reeling from a new ice age.

[jeffolie]

Obama will lead America into The Crisis in the Fall of 2009 and into the end of the financial world as we know it in 2012.

[jeffolie]

The Crisis in the Summer of 2008

The current crisis is smothered in the media by lying, corrupt governments worldwide issuing understated economic statistics.

The obvious features of this Crisis include housing, financials, food, fuel, pollution.

Housing is in the aftermath of the collapsing housing bubble here and in Europe. Most of Europe has declining prices with special problems in overbuilt Spain. Our flood of malinvestment is spilling into the REO sector and consequentially into the complex financial instruments based on housing. Housing prices will continue to decline all year as forced liquidations drive down the market.

Financials slowing reveal themselves as the devistated broken business models. The financials no longer gather revenue by acting as salesmen collecting commissions on the products they pawn of on foreign investors and pension or hedge funds. No sales means no commissions. Financials revenues are drying up and the banks are in freefall along with the brokers.

Food and fuel along with commodities are being priced at a level that make the low income people forgo other purchases creating an even lower standard of living for the less fortunate. The media shows on a daily basis mass protests and even some riots in widespread countries across the world.

Pollution now in China results in cancer which leads as their number one cause of death. China leads the world now in the production of carbon dioxide, CO2. The governments of China, India and Russia lie and deceive with their numbers about pollution but their peoples' suffering cannot be denied.

In summary, The Crisis in The Summer of 2008 has unfolded as I predicted a year ago.

[Padre Steve]

This was a fantastic post! I found it to be very hopeful!

[jeffolie]

JUYUAN, China - A photograph hinting at shoddy school construction was pulled from an exhibition about last month's devastating earthquake, an apparent indication of rising government sensitivity over an issue that has already prompted angry protests from parents of children killed.

The photo showed a hand clutching a twisted piece of steel rebar that looked no thicker than a pencil, taken from the ruins of the middle school in the town of Juyuan that was one of 40 that collapsed in the May 12 quake.

School collapses have become one of the most charged issues in the quake recovery process, and one that local communist leaders seem anxious to suppress.

http://news.yahoo.com/s/ap/20080615/ap_on_re_as/china_earthquake;_ylt=AvMhg60dXl9FSGZdDryRxt.s0NUE

Lying, corrupt Communist Chinese are suppressing the truth about their earthquake.

[jeffolie]

The Coming Slowdown in China?

by CalculatedRisk

From Bloomberg: Yuan Extends Gains to 20% Since End of Peg Before Paulson Talks

The yuan extended gains to 20 percent since China ended a fixed exchange rate to the dollar in July 2005 ... The currency climbed for a fifth day, reaching 6.8909 per dollar. The yuan's advance since the peg was scrapped compares with a 29 percent gain for the euro against the dollar, 13.2 percent for the British pound and 4.7 percent for the Japanese yen.

From Professor Krugman: The world gets bigger

Many people have noticed that higher fuel prices are putting the brakes on globalization: if it costs more to ship stuff, there will be less shipping.

How big is this effect? ...

[A] very back-of-the envelope calculation using CIBC estimates of the fuel cost effect gives me a 17 percent contraction in trade if oil prices stay at current levels for a long time.

And from the NY Times: Labor Costs Rise, and Manufacturers Look Beyond China

China remains the most popular destination for foreign industrial investment in the world, attracting almost $83 billion last year. But ... [there are a] long list of concerns about China ... inflation, shortages of workers and energy, a strengthening currency, changing government policies, even the possibility of civil unrest someday. But most important, wages in China are rising close to 25 percent a year in many industries, in dollar terms, and China is no longer such a bargain.

Just some food for thought ...

http://calculatedrisk.blogspot.com/2008/06/coming-slowdown-in-china.html

[jeffolie]

The long list of worries about China includes inflation, rapidly rising labor costs, shortages of workers and energy, a strengthening currency, dwindling tax breaks for foreign investors and the possibility of civil unrest. With wages in China now rising close to 25 percent a year in dollar terms in many industries, the vaunted "China price" for a growing list of goods, particularly low-tech products, is no longer such a bargain.

In coastal Chinese provinces with ready access to ports for exports, even unskilled workers now earn $120 a month for a 40-hour workweek, and often considerably more. Factory workers in Vietnam still earn as little as $50 a month for a 48-hour workweek that includes a full day on Saturdays.

Over the past few years, some companies have sought relief from high wages in coastal provinces of China by moving inland. But companies like Ever-Glory are now doing the same arithmetic and finding it cheaper to move to other countries than to head inland, partly because of national policy changes in China, like the labor regulations.

China is also rapidly phasing out its practice of charging lower corporate tax rates for foreign-owned companies. By contrast, Vietnam still offers foreign investors a corporate tax rate of zero for the first four years, and half the usual rate of 10 percent for the next four years.

To be sure, China still attracts a large and growing torrent of foreign direct investment. It reached $82.66 billion last year according to China's Commerce Ministry, which mainly includes factories in its figures while excluding most real estate and service-sector investments.

Foreign direct investment in China has grown by a third over the past three years. By contrast, foreign direct investment has more than doubled in this period in the Philippines, quintupled in India and soared more than eightfold in Vietnam.

A popular saying among Western investors these days is that Vietnam is the next China. Cambodia, with even lower wages attracting garment manufacturers, is called the next Vietnam.

Yet, like China, Vietnam does not offer complete tranquility. Workers are becoming more vocal and staging more strikes, despite a government ban on independent unions.

Nearly 20,000 workers walked out this spring at a Nike shoe factory run by a Taiwanese contractor. The workers went back to work only when given a 10 percent raise, to $55 a month, and a larger meal subsidy.

http://www.iht.com/articles/2008/06/17/business/inflate.php

China losing the war of cheapest labor costs

[jeffolie]

The big news of late was China putting through an increase of 16% for gasoline and a 18% jump in diesel. The analysis of this should be straightforward, inflation masked by government subsidies will now come even more to the surface. The effects should be several fold. First will be a significant Mad Max shutdown of a significant portion of China’s already profitless or money losing “businesses”. Secondly it puts even more pressure on the Yuan float which has been loosening even before this announcement. Thirdly, all these factors will result in less product and higher prices for the US to import. And as the following prices paid and received charts clearly suggest it’s already a crisis (present tense). Fed heads should take note of the words “current prices paid”, not “will be paid”.

http://wallstreetexaminer.com/blogs/winter/?p=1736#more-1736

China Death Watch

[jeffolie]

Sometimes called "market Stalinism," it is a potent hybrid of the most powerful political tools of authoritarian communism — central planning, merciless repression, constant surveillance — harnessed to advance the goals of global capitalism.

Over the past two years, some 200,000 surveillance cameras have been installed throughout the city. Many are in public spaces, disguised as lampposts. The closed-circuit TV cameras will soon be connected to a single, nationwide network, an all-seeing system that will be capable of tracking and identifying anyone who comes within its range — a project driven in part by U.S. technology and investment. Over the next three years, Chinese security executives predict they will install as many as 2 million CCTVs in Shenzhen, which would make it the most watched city in the world. (Security-crazy London boasts only half a million surveillance cameras.)

The security cameras are just one part of a much broader high-tech surveillance and censorship program known in China as "Golden Shield." "The big picture," Zhang tells me in his office at the factory, "is integration." That means linking cameras with other forms of surveillance: the Internet, phones, facial-recognition software and GPS monitoring. This is how this Golden Shield will work: Chinese citizens will be watched around the clock through networked CCTV cameras and remote monitoring of computers. They will be listened to on their phone calls, monitored by digital voice-recognition technologies. Their Internet access will be aggressively limited through the country's notorious system of online controls known as the "Great Firewall." Their movements will be tracked through national ID cards with scannable computer chips and photos that are instantly uploaded to police databases and linked to their holder's personal data. This is the most important element of all: linking all these tools together in a massive, searchable database of names, photos, residency information, work history and biometric data. When Golden Shield is finished, there will be a photo in those databases for every person in China: 1.3 billion faces.

At the same time, the success of China's ravenous development creates its own challenges. Every rural village that is successfully razed to make way for a new project creates more displaced people who join the ranks of the roughly 130 million migrants roaming the country looking for work. By 2025, it is projected that this "floating" population will swell to more than 350 million. Many will end up in cities like Shenzhen, which is already home to 7 million migrant laborers.

But while China's cities need these displaced laborers to work in factories and on construction sites, they are unwilling to offer them the same benefits as permanent residents: highly subsidized education and health care, as well as other public services. While migrants can live for decades in big cities like Shenzhen and Guangzhou, their residency remains fixed to the rural community where they were born, a fact encoded on their national ID cards.

The answer is Golden Shield. When Tibet erupted in protests recently, the surveillance system was thrown into its first live test, with every supposedly liberating tool of the Information Age — cellphones, satellite television, the Internet — transformed into a method of repression and control. As soon as the protests gathered steam, China reinforced its Great Firewall, blocking its citizens from accessing dozens of foreign news outlets. In some parts of Tibet, Internet access was shut down altogether. Many people trying to phone friends and family found that their calls were blocked, and cellphones in Lhasa were blitzed with text messages from the police: "Severely battle any creation or any spreading of rumors that would upset or frighten people or cause social disorder or illegal criminal behavior that could damage social stability." The end result is that when the games begin, much of the Tibetan movement will be safely behind bars — along with scores of Chinese journalists, bloggers and human-rights defenders who have also been trapped in the government's high-tech web.

Police State 2.0 might not look good from the outside, but on the inside, it appears to have passed its first major test.

The crackdown in Tibet has set off a wave of righteous rallies and boycott calls. But it sidesteps the uncomfortable fact that much of China's powerful surveillance state is already being built with U.S. and European technology. Yahoo had briefly put up the mug shots of the "most wanted" Tibetan protesters on their Chinese news portals. It's a story that glosses over the much larger scandal of what is actually taking place: Western investors stampeding into the country, possibly in violation of the law, with the sole purpose of helping the Communist Party spend billions of dollars building Police State 2.0. This isn't an unfortunate cost of doing business in China: It's the goal of doing business in China. "Come help us spy!" the Chinese government has said to the world. And the world's leading technology companies are eagerly answering the call.

"We're at the start of a massive boom in Chinese security spending," according to Graham Summers, a market analyst who publishes an investor newsletter in Baltimore. "And just as we need to be aware of how to profit from the growth in China's commodity consumption, we need to be aware of companies that will profit from 'security consumption.' . . . There's big money to be made."

While U.S. companies are eager to break into China's rapidly expanding market, every Chinese security firm I come across in the Pearl River Delta is hatching some kind of plan to break into the U.S. market.

The paper he produced was called "China's Golden Shield: Corporations and the Development of Surveillance Technology in the People's Republic of China." It exposed how big-name tech companies like Nortel and Cisco were helping the Chinese government to construct "a gigantic online database with an all-encompassing surveillance network — incorporating speech and face recognition, closed-circuit television, smart cards, credit records and Internet surveillance technologies."

Walton's paper did have an impact, but not the one he had hoped. The revelation that China was constructing a gigantic digital database capable of watching its citizens on the streets and online, listening to their phone calls and tracking their consumer purchases sparked neither shock nor outrage. Instead, Walton says, the paper was "mined for ideas" by the U.S. government, as well as by private companies hoping to grab a piece of the suddenly booming market in spy tools. For Walton, the most chilling moment came when the Defense Department tried to launch a system called Total Information Awareness to build what it called a "virtual, centralized grand database" that would create constantly updated electronic dossiers on every citizen, drawing on banking, credit-card, library and phone records, as well as footage from surveillance cameras. "It was clearly similar to what we were condemning China for," Walton says.

http://www.rollingstone.com/politics/story/20797485/chinas_allseeing_eye

China going to hell and bringing it to America

[superpower]

GK;

Wrong. The US dominates in new industries, like Internet.

US does not dominate internet at all. Currently, China has more internet users than US and its internet technology is one generation ahead of US.

France, Germany, and Italy all elected pro-US leaders.
It would be interesting to see how supportive the France, Germany, and Italy will be when the majority of US is Latino.

True. US has the worst health care system.
Americans go to Cuba to seek medical treatments. Senior Americans move to mexico because they could no longer afford the care offered at home.

[likwidshoe]

US does not dominate internet at all.

It dominates the sixteen of the top twenty DNS servers. Does that count?

...its internet technology is one generation ahead of US.

How?

True. US has the worst health care system.
Americans go to Cuba to seek medical treatments.

That's a laugh. The reality is that the rest of the world comes to the US to get top notch medical care. Most of the new drugs are developed in the United States. Waiting times for simple procedures are next to nonexistent, as opposed to the months long waits in socialist countries.

Senior Americans move to mexico because they could no longer afford the care offered at home.

Where do you get this stuff?

[superpower]

"US has the best medical technology and care."
That's true. But America is ranked something like 39th of all countries in the world in providing health care to its citizens, and number one in war spending.

"Waiting times for simple procedures are next to nonexistent, as opposed to the months long waits in socialist countries."
That's true, if you happen to be rich.

Where do you get this stuff?
Ask Lou Dobbs.

[GK]

superpower,

Google, Yahoo, eBay, Cisco, Microsoft, Sun, etc. are the companies that dominate Internet hardware and software. They are all US companies. There is no non-US company, let alone a Chinese company, it this bracket.

China still has fewer Broadband lines than the US, despite the population being 4.5 times larger.

It would be interesting to see how supportive the France, Germany, and Italy will be when the majority of US is Latino.

So, according to you :
a) France/Germany/Italy are racist/anti-Latino.
b) Latinos cannot assimilate.

You have made two bigotted statements in one sentence.

Lastly, the US dominates medical technology. Canadians come to the US in droves when their state-run system means a 3-month waiting list for appointments. In France in 2003, 15,000 died from a mere heat wave, indicated how fragile their system is.

...and number one in war spending.

Yes, which is one of the 10 reasons the US is a superpower.

None of your points are intelligent or well-considered, they are merely the tired, memorized lines of a non-thinker.

Global inflation fears deepened as Chinese steelmakers agreed to a record increase in annual iron ore prices in a move likely to boost the cost of cars, machinery, and other products.

Chinese millers agreed to pay Anglo-Australian miner Rio Tinto up to 96.5 per cent more for their ore supplies this year, the largest-ever annual increase and well above the 9.5 per cent increase paid last year.

The rise suggests that demand for commodities from emerging economies remains strong, in spite of the US slowdown, fuelling fears that global inflation will continue to rise. The rise -- an average 85 per cent -- surpasses the record increase of 71.5 per cent agreed in 2005, when the commodities  boom gathered pace.

"Commodity-led inflation risks appear to be growing," said Tobias Levkovich, Citi chief strategist.

http://www.gata.org/node/6388

China to pay 96% more for ore, inflation anyone?

[Scott]

The United States is no longer a superpower and this is why:

Liberals and conservatives habitually speak of the United States as a superpower. Neocons like Norman Podhoretz advise that our "only option" with Iran is "to go to war" (The Week, June 8, p.6) – as though we can. A New York Times commentary on Iraq blithely states that, no matter the outcome, "the United States would still be the sole world power" (Jan. 14, p.WK1) – as though we are. Bush planners aim at establishing a "permanent" U.S. military presence in Iraq (The Christian Science Monitor, June 12, p.1) – as though we could. And presidential candidates of both parties speak as though we can accomplish anything if we're well-led. Well, as Roky Erickson once said, "You can believe that story if you want to."

Consider, first, global economics, then China, then the state of our military.

The Economist (Feb. 14, p.18): "Typically in the past, when America's economy has weakened, the rest of the world soon flagged. But this time ... the rest of the world has speeded up even as the American engine has lost steam. ... [Gross national product] per person is now growing faster in the euro area than it is in America. Domestic demand is also booming in emerging economies in Asia, the Middle East, and Russia [and] most of China's growth comes not from exports but from domestic demand." Since World War II, and until recently, American consumption has been the world's primary economic force – which is why the world had no choice but to tolerate our misadventures. Now many nations are booming on their own, in cooperation with one another. The U.S. is still important, but it's not necessary.

The Economist (April 14, p.12), under the headline "Come in number one, your time is up": "America used to be the world's biggest exporter. First it was pushed aside by Germany, and now it has been outclassed by China. ... In global finance, too, America and the dollar are being shoved off their pedestal. The dollar is still preferred as a reserve currency, but it is no longer the favourite form of cash for households and firms. There are now more euro[s] ... in circulation than there are dollars [my italics]. In the international bond market, the euro has displaced the dollar as the main currency. ... Wall Street's stockmarket capitalisation has now been eclipsed by Europe [combined with Russia]." Still important, but not necessary. Still important, but now the world has many other choices. In light of these facts, to think of the U.S. as "the sole world power" is ludicrous – as it is ludicrous to imagine that in this brave new world we will be granted the authority, and accorded the deference, to which we've been accustomed for 60 years. The leading nations haven't yet decided what to do with their new power. They're not used to it. But they'll get used to it, and they will use it – how, at this point, is anyone's guess. But the more delusional we remain about our status, the harder the shock will be when they figure out how.

It's been widely reported that we are, by far, the world's biggest debtor nation. The Week (June 8, p.20): "Including unfunded promises made for Medicare, Social Security, and federal retirement programs, U.S. taxpayers have a total debt of $59 trillion. That's $516,000 for every U.S. household." Obviously, we're not paying that debt anytime soon, especially when "the nation's average personal savings rate fell to negative 1% in 2006, meaning that Americans spent more than they earned" (The Week, Feb. 16, p.16). Also widely reported: America needs foreign investment and loans to function. Foreigners "hold a record 52%" of U.S. government debt, "up from 25% in 1995" (The Week, Dec. 15, 2006, p.44). How can you call America a superpower when we can't meet our expenses without the goodwill of our rivals?

Which brings us to China, our primary banker. The New York Times (April 14, p.C3): "Last year, when Treasury debt increased by $184 billion, almost half of that amount ... was provided by lenders in China. ... China [is] the largest source of funding for the United States government's deficits." The article reports that our Federal Reserve bought 20% of "our newly issued bonds" and that "only 4% of the [total] money came from American investors and institutions" (my italics). Which totals only 24% coming from American sources. Without the present level of foreign investment, especially Chinese investment, America would be in very bad straits. Uh oh ... the Chinese show signs of changing their ways. "Their fastest growth these days lies in Europe, Africa, the Middle East, South America, and elsewhere in Asia – in other words, practically anywhere other than the United States" (The New York Times, April 18, p.C1). One result is that China has created a new "agency to invest its immense reserves in foreign currency. ... Some analysts say the formation of the new agency means China is moving away from heavy reliance on investing in United States dollars through Treasury securities [The New York Times, March 10, p.C3]." We're still important, but not nearly as necessary. With even a small change in its investment policy, China has the power to dampen America's economy.

Now consider the state of America's military. Colin Powell, quoted in Time (April 16, p.30): "The active Army is about broken." The Washington Post (March 19, p.1): "Senior U.S. military and government officials acknowledge ... that it will take years for the Army and Marine Corps to recover from what some officials privately have called a 'death spiral,' in which the ever more rapid pace of war-zone rotations has consumed 40% of their total gear, wearied troops, and left no time to train. ... The U.S. military now lacks a large strategic reserve of ground troops ready to respond quickly and decisively to potential foreign crises. ... The vast majority [of Army units in the United States] are rated 'not ready.'" The Post article reports the reactions of several congressmen to a classified military briefing. Rep. Solomon P. Ortiz, D-Texas: "I have seen the classified-only reports. And based on those reports, I believe that we as a nation are at risk of major failure, should our Army be called to deploy to an emerging threat." Rep. Walter B. Jones, R-N.C.: "This nation has got to replenish and fix what is soon going to be broken." Finally, the Post goes on: "Under current ... plans, it will take two to three years after the Iraq war ends [my italics] ... to restore ... equipment levels. It will take five years and at least $75 billion for the Army to increase its active-duty ranks [as planned] up to 547,000 soldiers."

That's for the future. Right now the military is hurting at home as well as on the battlefield. "The backlog of [veterans'] disability claims stands at more than 405,000, with cases averaging 177 days to be processed. ... Experts estimate that an additional 400,000 claims will be filed in the next two years" (The New York Times, June 6, p.WK13). "Care facilities for American troops and their families are buckling under the strain of war and funding limitations" (USA Today, June 5, p.1). Barry McCaffrey, retired four-star Army general: "There is no argument of whether the U.S. Army is rapidly unraveling" (The Christian Science Monitor, April 4, p.11).

The Washington Post (May 8, p.D1): "Joseph E. Stiglitz [Nobel winner in economics] ... co-authored a study that predicts the Iraq conflict alone will eventually cost taxpayers more than $1 trillion, counting military rebuilding and health care for wounded veterans." Incredibly, we haven't paid for any of this yet. The Post article noted, "The war bill is going directly on the nation's credit card." Foreign investors, especially China, have been paying for this war.

Now why would they do that? The answer: It's in their strategic interest to finance a war that drains America's financial, military, and leadership clout. They're paying for us to screw ourselves. It saves them the trouble. However, given the irresponsibility of America's military adventures and the equal irresponsibility of the American electorate in elevating someone like George W. Bush to power, why would China and the other investing nations finance the rebuilding of America's military might? How could that possibly be in their interest – especially now that the euro has overtaken the dollar as a viable medium for world exchange? Hence China and others are making obvious moves to invest differently. We're about to be left behind.

We're still important, a big economy, a player. We're still dangerous, with all our bombs and missiles. But we won't be fighting another ground war anytime soon, and everybody knows it. Financially and militarily, we're no superpower anymore – though no presidential candidate can say that. Whether we recede from center stage gracefully or destructively, we'll recede. We already have. It doesn't look that way on TV, but we already have.

[Scott]

The US is not a superpower anymore as these are some sources for reference:

From Superpower to Besieged Global Power: May 2008
http://www.ugapress.uga.edu/0820329770.html

Kavkaz Center
Soros: ''US is no longer a superpower''
Publication time: 7 April 2008, 20:56
http://www.kavkazcenter.com/eng/content/2008/04/07/9470.shtml

US a Superpower? Really? June 2007
http://www.austinchronicle.com/gyrobase/Issue/column?oid=oid%3A494048

[GK]

Scott,

The US is 25% of World GDP, three times the size of the next largest country, Japan, at 8%.

The article makes the case on why the US will continue to be a superpower in 2030. While some may debate that, no serious thinker suggests that the US is not even a superpower today.

Your claim, thus, is absurd.

[Brad]

I think this article is not researched well to state such an oppinion, especialy from a blog. The world is charging and so is the United States if anything to state the US will remain a superpower. The articles above state some really good points the US is no longer a superpower more than a superpower or any other superpower. I live in the US and really how some will think it will remain a superpower is really bias to know our position with Russia & China, the only 2 other superpowers. I disgree with the above comment as this is just a statement of an oppinion, not a fact. Good luck with your resources, there isn't much information that the US will remain a superpower if you want to Google it as I am surprized this isn't a whole lot of information to support this story here. I think it was written to benefit Wikipedia or something not so important but that's my oppinion.