By Wang Wen    Source: Valdai    Published: 2020-06-29

US scholars proposed the concepts of “G2” and “Chimerica” a decade ago. At present, the total GDP of China and the United States exceeds 40% of the world’s total, their combined military expenditures exceed 45% of related global spending, and they account for more than 65% of the world’s R&D investment. According to the assumptions of those US scholars, a pattern of G2 or polarisation has already emerged. But the fact is that the Chinese government and the nation’s academic circles have not yet affirmed the emergence of a G2, and are even more reluctant to move towards a polarised global paradigm with the United States.

From China’s perspective, the polarisation of the world can only lead to two results. One is to return to the Cold War, which pitted the US against the Soviet Union in the last century. The two sides chose their wartime allies and confronted each other in earnest until one side fell. Fostering such a situation is neither in line with China’s strategic goals nor what the world wants. Nowadays, the conflict between China and the US is intensifying. “Finding an upside” is a dilemma for each country.

Another possibility is that the two countries could forge an alliance and govern the world jointly. That is not what the Chinese people want. In China’s view, Russia, the European Union, Japan, the United Kingdom, and all other countries need to be respected. Russia has precious resources and reliable military power; Japan is a big country, known for innovation; the European Union and the United Kingdom have a profound cultural heritage. Southeast Asia, Africa, and Latin America have unlimited potential. In the future, no group (or groups) of countries can genuinely control the world. The so-called “G2” and “polarisation” are out-dated concepts.

There’s no need to assess the pros and cons of cultural values or strategic interests; China is unwilling to become a hegemonic country like the United States. It is not conducive to China’s development either to join the United States in a bipolar alliance or to engage in comprehensive confrontation with the United States. In fact, leading the world as a nation contradicts China’s view of a world where all countries are equal.

So, is it possible to return to an international system led by the United States? At present, the Trump administration is continuously suppressing China, and trying to contain or delay the rise of China. Even if Trump fails to get re-elected in November 2020, if the next US president continues to resist China, China will have no choice but become an equal and matched opponent of the United States. China seems to have had serious tensions with the United States in the economic, military, financial, and other fields for a long time.

From an economic perspective, the economic power of China and the United States are on par with one another. In 2019, China’s GDP was about US $14 trillion, and that of the US was about US $21 trillion; in other words, China’s nominal GDP is 2/3 that of the United States. Twenty years ago, China’s GDP was only 1/10 that of the United States. With the impact Covid-19 will have on the US economy in 2020, the gap between the economic strength of the two countries will continue to narrow. Most scholars believe that by 2035, China’s nominal GDP will exceed that of the United States. China’s total industrial production exceeded that of the US in 2011, and its total foreign trade exceeded that of the US in 2013. In 2020, there’s a high possibility that China will surpass the United States in terms of total retail sales, making China the world’s largest consumer market. In 2018, China started to host the annual World Import Expo, hoping to share the dividends of China’s development with the world by expanding imports. In March of the same year, Trump started a trade war against China. That notwithstanding, in the first five months of 2020, China became the largest trading partner of the United States. The Sino-US trade data proves the charm of the Chinese market once again.

From a military perspective, there is a gap in strength between China and the United States. In recent years, US annual military expenditures have remained at around US $700 billion, and China’s yearly military spending was about US $180 billion. However, while the US deploys its military around the world, Chinese military expenditures are focused on national security and defense. If we only speak of military strength in the Western Pacific, and keep in mind the outcome of the confrontation between China and the United States in the early 1950s, the Pentagon would be wise not to provoke China as an opponent. That is why the Trump administration took the initiative to stimulate China in many fields but kept calm regarding the military.

From a financial perspective, China is comparatively less competitive than the US. The current international monetary system is still based on the post-WWII pre-eminence of the US dollar. According to the statistics of the currency internationalisation index of the International Monetary Institute at China’s Renmin University, on worldwide national currency reserves, clearing, money trading, etc., the US dollar continues to account for about 55% of the global currency market. The euro has accounted for around 23% of this market over the past ten years. The British pound, Japanese yen, and Renminbi have remained at about 3% each. In 2016, the Renminbi became one of the five IMF basket currencies, but the gap in international influence between it and the US dollar remains huge. The total capital market in the United States is about three times that of China’s two major stock exchanges, in Shanghai and Shenzhen. China should consider Wall Street’s global resource allocation capabilities well worth learning.

In fact, since China’s reform and opening-up, over the past 40 years, China has kept the enthusiasm to learn from other countries. Most Chinese scholars studying the development experience of countries consider the Soviet Union in the 1950s, Japan in the 1980s, and the United States in the 1990s important subjects for research. After the 20th century, the weakening trend of the United States has become more and more unavoidable. As far as China is concerned, the biggest lesson of America’s decline in the 21st century can be learned from its promotion of hegemonic diplomacy abroad, coupled with the lack of pragmatic reforms at home.

The global image of the United States has reached its lowest level since its founding in recent years. In the first half of 2020, the expansion of the US balance sheet exceeded US $7 trillion, and the aggregate value of US Treasury bonds exceeded US $25 trillion for the first time. Additionally, the democratic system has become a “political veto system,” racial inequality has reached its most intense level in history, and the United States has almost reached the cliff’s edge of financial bankruptcy and the collapse of its image abroad.

The Chinese media often criticise the United States for pursuing international hegemony, and Chinese scholars remain keen to remind the nation’s decision-makers to avoid repeating the decline of the United States. From the experience of the past 20 years, China has worked hard to improve the livelihood of ordinary citizens, maintain social stability, pursue cooperation with foreign countries, and avoid military conflicts. The Western media lacks the ability to demolish or twist news about the fruits of China’s development, and the world has seen China’s rise. The Chinese believe that as long as the pace of development in China is maintained, China’s rejuvenation is inevitable.

From the above analysis, China has full confidence that the comparative strength of the two countries will change in the future. From the perspective of Chinese policymakers, the world is witnessing profound changes like none other seen in hundreds of years. The Covid-19 epidemic is accelerating this century-long era of change, one that has been characterised by changes in the international structure, the evolution of the technological revolution, and the subversion of ideas.

In the eyes of most Chinese, the countries of the world resemble middle school students in a classroom. Each student’s GPA may be different, but every student has its advantages and disadvantages. Furthermore, any given student’s GPA isn’t particularly connected with their future prospects. Even if some students have a good GPA in school, these don’t guarantee they can find good jobs after graduation or ensure that they can become respectable social figures. Furthermore, the performance of one or two elite students can’t change the fate of the whole class. If the world is indeed like middle school classroom, all students need to help each other and work together to make the class better.

I use this metaphor to explain that the world has become more and more complex. Challenges affecting the entire world, such as climate change, infectious disease crises, transnational crimes, the rich-poor divide, international money laundering, etc. need all countries to cooperate. Theoretical political realism with respect to hegemony and the rise and fall of nations isn’t able to explain, predict, and solve the future problems of the world.

China is more willing to look at our uncertain future from a pragmatic, inclusive, and long-term perspective. Firstly, China will focus on its economic development and make its people wealthier. Secondly, with its vision of mankind as a community with a common future, China will share the wisdom gained from its successful development experiences such as the Belt and Road Initiative by taking steps to help other countries develop their economies. Simply put, China is attempting to create a win-win international environment for itself and the world. This win-win international environment is the new global role China wants.

So, China will not follow America’s example of becoming a hegemonic state, controlling the world. After all, leading the world is a hard job, one that exceeds China’s historical experience and national capabilities.

The author is professor and executive dean of Chongyang Institute for Financial Studies at Renmin University of China, and executive director of China-US People-to-People Exchange Research Center. His latest book is Great Power's Long March Road.wangwen2013@ruc.edu.cn