The Contest of the Century Read Free Page B

If anything, the surprise is that it did not start sooner.
    Competition between the U.S. and China is usually thought of in terms of the location of a factory or the value of exchange rates, but that is rivalry at the retail level. The real contest for power and influence is over the geopolitical high ground: the rules, institutions, and power dynamics which dictate how the world really works. The core of this book will be about the three different fronts on which the competition will take place—military, political, and economic.
    The first section focuses on the military contest in Asia, where China’s new navy is beginning to challenge the dominance of the U.S. in the western Pacific, setting up one of the defining stories of the coming decades. The tussle that is developing for control of the seas surrounding China is in some ways the central contest, because naval power can create the conditions to shape political and economic realities. Chapter 1 will look at the reasons behind China’s naval modernization, the historical and geopolitical anxieties together with the changing role that the military occupies within the Chinese system. Chapter 2 looks at whether China will seek to strike out as a naval power into the Indian Ocean, and Chapter 3 examines the deep backlash that China has provoked in Asia. Chapter 4 analyzes America’s response to China’s Asian ambitions.
    The second section examines the political challenge that China is now presenting. One chapter looks at China’s huge investments in soft power; other explores the impact that China’s rigid ideas about state sovereignty are having on the way human rights are treated by the international community. Before that, Chapter 5 provides a slight detour into the psychology of China’s new assertiveness, looking at the particular form of nationalism which has sprung up over the last two decades and which is the emotional crutch for the desire to challenge the West.
    The final section focuses on two different ways in which China is threatening to rewrite the rules of the global economy, first through its plans to challenge the U.S. dollar, and second through the coming boom in Chinese finance and investment, which has the potential to reshape globalization.
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    Of course, Beijing is not the only capital gripped by talk of American decline. Washington, too, is full of fin-de-siècle anxiety, the result ofthe global financial crisis which laid bare a wealth of much deeper, unresolved problems in the economy and a political system that seems allergic to addressing long-term problems. “The Desperate States of America,” as the German magazine
Der Spiegel
calls the U.S.; or, as the former Morgan Stanley analyst David Roche puts it,“Wall Street’s crack-up presages a global tectonic shift: the beginning of the decline of American power.” America’s huge budget deficits and debt levels mean that the risk of a much deeper crisis and a collapse in the credibility of the U.S. dollar is a very real one. And all this is taking place while Washington watches the seemingly unstoppable rise of China. It has become a favorite parlor game among economic pundits to predict the year when the Chinese economy will overtake the U.S. to become the biggest in the world. Some believe it could happen within a decade.
    The declinists are correct about two things. America’s ability to project power will depend on bringing its long-term debt under control and restoring its reputation as the most innovative large economy in the world. A decade of economic stagnation would derail many aspects of its foreign policy. It is also clearly true that the world has changed in important ways. China’s rise is only the most visible example of a diffusion of economic power toward the developing world, which includes India, Brazil, Indonesia, and a host of other nations. The unipolar era that the U.S. enjoyed after the end of the Cold War was always an aberration, and it is quickly