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Global Power: China, Germany & the USA

Dickson Igwe. Photo: VINO/File
By Dickson Igwe

The impact of world powers on the affairs of humanity has changed substantially since the start of 2000. New and emergent powers are having a significant influence on the world’s economic and political order.

Countries such as India and Saudi Arabia are today considered global powers for possessing unique features that impact both their regions and the global economy. The following is the first of two stories. It looks at the top 3 global powers, placed into that exalted position, by a prominent US foreign policy expert.

Professor Walter Russell Mead, Foreign Affairs Dean of Yale University, writing in the USA Think Tank, the American Interest, on January 4, 2015, stated that power today depended on a state having "the ability to shape its immediate environment and the broader world."

Mead challenged his readers with the question: who the real powers today were. The academic’s own answers were interesting, even thought provoking.

Now, Mead reshuffles the pack called G 7. Then he removes countries such as France, Canada, and Britain. He sees these countries as powerful, but in today’s world their ability to impact other countries and project power has diminished greatly. Their being in the Group of Seven is more a matter of history and diplomacy, than real power metrics. There are new players in the field of Great Power politics. The world’s institutions increasingly fail to match the realities of world power.

This is Mead’s line up starting with the number one power the USA. The USA dominates in the areas of economic dynamism, and culture: soft power. American brands and media dominate the globe. The USA is also the world’s most creative and innovative country. America innovates, Asia copies. The world looks to the US for economic leadership. The IMF, World Bank, and the World Trade Organisation remain the dominant global financial institutions. These organisations are driven by US economic power.  

The US, unlike China, sits in a secure geographic space, and possesses a rich natural resource base. The US also has great constitutional stability that cannot be easily swayed by politicians. The US’s system of checks and balances, despite gridlock, achieves its objective of stemming the power of any one institution of power becoming too dominant.  

Despite the rise of China, the US possesses overwhelming hard power. The country has a fearful military complex that is second to none. The US remains the only country capable of projecting awesome military power to any corner of the globe within hours. This military power is driven by an impressive technological and logistical infrastructure that sits upon a multi trillion dollar economic platform that enhances the gravitational pull of US society, business and commerce.

US military power has transformed the waters surrounding the Americas into a US lake. The USA is both an Atlantic and Pacific power. Despite the great poverty in Latin America, and drug cartel activity in Mexico, the Americas are the most peaceful region in the world. Confidence in US power is a major reason the US Dollar is the world’s reserve currency, and Wall Street, the predominant stock, commodities and securities exchange. When there is global crisis, especially military conflict leading to regional conflagration, investor cash finds haven in the USA.

Mead puts Germany at number two power. Germany is by far the largest economy in Europe. Its advanced manufacturing economy is the envy of the world. The country sits in the pivotal position on the continent of Europe. 

The European Community is the world’s largest marketplace. It is also the continent with the most developed countries in numerical terms. Germany holds the power balance between north, south, east, and west, and cannot be challenged by any other European country.

Germany has benefitted from recent historical events, and its geographic position. It has been stated that Germany has achieved today what she could not in two world wars: the economic domination of Europe. The present crisis with Greece shows that the German growl is the most fearful noise in Europe. The crisis with Greece shows that Germany pulls the key strings of European power. German politicians indirectly control the core institutions of Europe.   

China is power number three, according to Mead. However, China has geo political limits in the game of power that will prevent the country from superseding the USA any time soon. China sits in a volatile environment. Unlike the USA that is surrounded by friendly states and wide oceans, or a Germany bordered by weak states, China lies in a region of strong and ambitious powers. In fact Germany enjoys more influence in its home region than does China in the Asian Pacific.

China is surrounded by regional rivals: Japan, Vietnam, Taiwan, Australia, and Indonesia. These are countries that are intent on blocking China’s emergence as a regional hegemony. Furthermore, India is determined not to allow China too much presence in the Indian Ocean. These countries increasingly enjoy US backing in this effort to contain China. This will limit China’s power projection ambitions.

China has a further limitation. As a manufacturing power, China depends on access to raw materials and markets around the world. China is dependent on oil and gas from the Middle East. Incredibly today, the USA has become the world’s number one producer of oil, and the country is self sufficient in energy resources.

The Chinese economy needs to be much more innovative. China is good at copying, but the country is not very creative. Innovation and creativity are the preconditions for real technological and economic power. The recent crash in the Chinese stock market has revealed a fragile economic underbelly.

The Chinese investor in stocks and shares is highly leveraged. He or she is also sitting in a property that has gone south in terms of price. The Chinese property bubble has been compared to the Sub Prime Mortgage debacle in the USA of 2007 that sent the world into recession. A number of investors predict a bursting of the Chinese bubble leading to a long recession, even depression.

China is unable today, despite the increasing power of its military, to protect the sea routes on which its economy depends. The US controls the Seven Seas.

China’s success as an exporting economy depends on access to markets in America and Europe. If China lost access to these markets its economy and financial system would face collapse. China’s manufacture for export growth model is simply unsustainable in the long run.

There are systemic limitations that impact China. The country is an authoritarian state ruled by a dictator. The Chinese Communist Party holds the population in check through its management of an 18 trillion dollar economy and state violence. A sudden downturn, leading to recession, could unleash unrest and instability that would make Tiananmen look like a veritable picnic.

The country has grown so quickly that its social and economic infrastructure is under severe strain. There are serious environmental challenges facing China. The one child policy has placed the country in the list of countries with an aging and declining population.

China is increasingly looking like a Paper Tiger. But the country imploding economically has the capacity to throw the world into a recession.  

To be continued…

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