Davos 2022 | Adam Tooze On How China As Dominant Global Economy Will Impact World Order

Summary

The discussion explores China's potential to become the world's dominant economy, examining how this shift might impact global power dynamics, especially for India. The conversation highlights the complex relations between China, India, and the United States, noting China's economic struggles and technological restrictions imposed by the U.S. China's rise is contrasted with the Soviet Union's past influence, emphasizing China's larger global significance. India's strategic decisions in a multipolar world are considered, particularly in relation to alliances like the Quad and challenges from historical rivalries with China.

Takeaways

• 🤔 China's rise as the dominant global economy is likely, but its political dominance may be hindered by its autocratic system.
• 🤝 India faces complicated choices due to its rivalry with China and historical ties with countries like Russia and Pakistan.
• 🔗 India could ally with groups like the Quad, or choose an independent path in response to China's rise.
• 🏗️ China's economic growth is currently slowed by internal challenges like the real estate crisis, private sector debt, and COVID-19 policies.
• 🌍 Even without surpassing the U.S. GDP, China’s existing economic, technological, and resource influence is substantial in the global multipolar order.
• 🇺🇸 The U.S. has openly acted to limit China’s technological growth, exemplified by its 2020 strike on Huawei, aiming to block China’s advances in key industries like AI and communications.
• 💪 China's leadership sees overcoming American resistance as crucial to maintaining its sovereignty and advancing its technological capabilities.
• 💻 The U.S.-China conflict is less about territorial disputes and more about technological leadership, with China determined to overcome the limits imposed by the U.S.
• 📉 Russia is considered a defeated power, with China poised to take on a more significant role in the global power structure.
• 🌐 China's rise is not directly comparable to the Soviet Union. China's scale and influence, alongside India, represent a unique force in modern global history, vastly different from past European empires.

Q & A

What impact could China becoming the dominant global economy have on the balance of power?

If China becomes the dominant economy, it could complicate global power dynamics, especially as it may not simultaneously become a dominant political force due to its autocratic system. The shift could lead to a more multipolar world, with different countries adjusting their alliances and strategies in response.

How does India view China’s rise as a dominant economic power?

India views China’s rise with complexity, considering their rivalry, contested borders, and China's alliance with Pakistan. India faces difficult choices about whether to align with the U.S.-led Indo-Pacific strategy or go its own way.

Has China’s trajectory toward becoming the world’s largest economy changed recently?

Yes, economic shocks like the real estate crisis, high debt in the private sector, and strict COVID policies have slowed China’s growth. While predictions of China overtaking the U.S. economically seem less immediate, China's current economic weight and influence are already significant.

How has the U.S. responded to China’s technological advancements?

The U.S. has taken aggressive steps to limit China’s technological development, notably by imposing restrictions on Chinese tech companies like Huawei. The U.S. aims to prevent China from advancing in areas like AI and global communications.

Why does the speaker refer to U.S. actions against China in tech as a ‘declaration of war’?

The speaker calls it a 'declaration of war' because the U.S. is not just competing with China but actively trying to block its progress in critical high-tech industries. This limitation strikes at the core of China’s sovereignty and long-term ambitions, making it a fundamental challenge to China’s development.

What role does sovereignty play in China’s response to U.S. limitations on its technological growth?

Sovereignty is central to China’s political project. The Chinese regime is deeply committed to overcoming past humiliations and sees U.S. efforts to limit its tech advancement as a direct affront to its sovereignty. Beijing is determined to break through these obstacles, regardless of the cost.

How does China’s position in global geopolitics differ from that of the former Soviet Union?

Unlike the Soviet Union, which was a large land empire with a smaller population, China represents one-sixth of humanity and operates on a much larger scale. China’s rise is far more transformative for the global economy and lacks the ideological ambitions of the Soviet Union, focusing instead on material and technological challenges.

What challenges does the U.S. face in accepting China’s current global influence?

The U.S. struggles to accept China’s current influence in global trade and technology. While the U.S. has successfully limited China's advancement in some tech sectors, China’s existing economic and technological footprint already positions it as a key player in the world, leading to tension.

How does the shift toward a multipolar world affect global alliances?

A shift to a multipolar world forces countries to reassess alliances. For example, India must decide whether to align more closely with the U.S. in the Indo-Pacific strategy or maintain strategic autonomy. Other countries also have to navigate between U.S. and Chinese spheres of influence.

Why is China’s rise considered a deeper and more fundamental challenge to the U.S. than the Soviet Union was?

China’s rise is a deeper challenge because it is not based on ideological competition like the Soviet Union but on economic and technological dominance. With its massive population and unprecedented development scale, China’s influence has broader, more profound implications for global power structures.