Davos 2022 | Adam Tooze On How China As Dominant Global Economy Will Impact World Order
Summary
TLDRThe 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.
Outlines
🌏 China's Rising Economic Power and Global Impact
The paragraph explores the potential impact of China becoming the dominant global economy in the near future, though it may not become the dominant political force due to its autocratic regime. It discusses the complexity this would introduce to global power dynamics and how it might affect India's position, considering India's rivalry with China, particularly over contested borders and China's alliance with Pakistan. India faces critical decisions, such as whether to align with the Quad or pursue its own path, reflecting India's complex geopolitical situation.
💼 Challenges to China's Economic Dominance
This paragraph discusses the shifting expectations around when China's GDP might surpass that of the United States, noting that recent economic setbacks in China, such as the real estate crisis, debt accumulation, and issues with its zero-COVID policy, have delayed those predictions. Instead of waiting for China to become the top economy, the discussion emphasizes the significance of China’s current economic influence, particularly in technology and resource markets. The narrative then pivots to how the United States has reacted by waging economic and technological battles against China, especially with the targeting of Huawei, which represents a broader effort to limit China's advancements in tech industries.
🤖 US-China Tech War: A Modern Conflict
The United States’ tech war against China, particularly its strategic targeting of companies like Huawei, is framed as a declaration of economic war. This conflict is not about territorial disputes but about restricting China’s progression in cutting-edge technology such as artificial intelligence (AI) and communications. Despite China's determination to overcome these obstacles, the paragraph highlights the enormous price both nations will pay in this ongoing confrontation, with China's resolve to protect its sovereignty standing as a major driving force.
🌍 China’s Sovereignty Project and Global Standing
This paragraph emphasizes China's commitment to its sovereignty and historical mission to overcome 'centuries of humiliation.' It argues that the United States' attempt to limit China’s technological advancement is a direct threat to this project, framing it as an existential struggle for China to claim its place as a global leader in industrial and technological development. The paragraph also questions the ultimate price China is willing to pay and the consequences of this resistance for global power dynamics, as the US seeks to prevent China from advancing in key industries.
🇨🇳 From Soviet Union to China: A New Global Rival
The text contrasts China's rise with the former Soviet Union’s place in the Cold War. Unlike the Soviet Union, which was a major geopolitical rival to the US but smaller in scale, China represents a far more significant global force. With one-sixth of humanity and unprecedented mobilization capacities, China and India are categorized as unique players in the world stage, incomparable to the past experiences of European or Western-derived powers. This paragraph stresses the need to understand China's rise not through a Cold War lens but as a transformative global power.
🏙 The Unprecedented Scale of China's Development
The paragraph concludes by underlining the fundamental differences between China and previous global powers, particularly the Soviet Union. China’s influence is framed as much deeper and more significant due to its scale, population, and economic might. It acknowledges that while China does not pose the same ideological challenges as the Soviet Union, its material significance and transformative power in the global economy far exceed those of the Soviet Union, signaling a profound shift in the global balance of power.
Mindmap
Keywords
💡China's Dominant Economy
💡Multipolarity
💡Tech Wars
💡American Indo-Pacific Strategy
💡Sovereignty Project
💡Economic War
💡China's Technological Development
💡Russia's Role
💡Quad
💡Geopolitical Reconfiguration
Highlights
China may become the dominant economy in the world, though not necessarily the dominant political force due to its autocratic nature.
India's relationship with China is complicated due to historical rivalries, including a contested border and China's close ties with Pakistan.
India may face difficult choices on whether to align with the American-led Indo-Pacific strategy (the Quad) or go its own way.
China's recent economic shocks, such as issues in the real estate market and the no-COVID policy, have delayed predictions of its GDP surpassing the United States.
Rather than focusing on when China will overtake the U.S., the global focus should be on China's existing economic and technological dominance.
The United States has already declared economic war on China, particularly through a targeted attack on Huawei, a major investor in global R&D.
The U.S. seeks to limit China's technological progress, particularly in AI and communication, seeing these fields as essential for global leadership.
China’s regime views sovereignty as non-negotiable, and its commitment to overcoming U.S. restrictions in technology is absolute.
The ongoing U.S.-China rivalry is not only economic but also represents a deeper ideological and technological conflict between two global powers.
China's rise is fundamentally different from the Soviet Union, as China represents one-sixth of humanity and operates on a much larger, more transformative scale.
Unlike the Soviet Union, China is not making ideological claims, but its material and technological influence is far more significant globally.
The U.S. is struggling to accept a reconfigured global structure where China already plays a critical role in tech, raw materials, and energy markets.
India's strategic options are influenced by China's rise, its historical reliance on Russian military hardware, and its complex relationships with both China and the U.S.
America’s tech war against China reflects its unwillingness to let China progress in high-tech industries, limiting China's role in future technological leadership.
China's economic and geopolitical significance is creating a multipolar world order, where America is no longer the uncontested dominant power.
Transcripts
what is the impact when in a few years
from now not so long away
china becomes maybe the dominant economy
in the world maybe not the dominant
political force because of the autocracy
uh issue but the dominant economy how
does that change the balance of power
does that make things more complex yeah
or does that make things more equal
uh you know because i know india is is
looking at these scenarios and wondering
where would we stand in a world like
that well i think india's perspective on
this is fascinating right because
india is a rival of china you have a
protected and contested border with
china china's
historic allies pakistan
india is great or regional arrival
so so india's position in this
configuration of china's rise is is
hugely complicated and it does face i
think difficult choices as to whether or
not it then allies itself with the quad
for instance you know some sort of
american indo-pacific construct chooses
to go its own way i mean for a while i
think india perhaps imagined that russia
would be a partner at least when it came
to military hardware uh where there is a
you know a deeply long exactly i mean
this goes all the way back to the cold
war period so um and so i think those
questions are very real i think this
question of the timing is interesting
though because if we'd had this
conversation two or three years ago that
was definitely our understanding in
other words there was a clock running on
the moment when china's gdp was going to
exceed that of the united states yes and
that was as it were the time horizon
that we were thinking towards i think it
has to be said that given the economic
shocks that china has suffered in the
last couple of years and the serious
impasse it faces right now on the real
estate market
uh huge accumulations of debt in the
private sector in the china's private
sector
the problem and the impasse over the no
covert policy
predictions of china's imminent
overtaking of the united states seem
less relevant than simply weighing and
coming to terms with china's existing
weight in the world
you see what i mean rather than as it
were deferring this conversation to the
point when and having everything
overshadowed by this totally symbolic
moment when china's gdp exceeds that of
the united states the fact of the matter
is that china's existing level of
development its existing presence in
tech its dominance in raw material and
energy markets already make it
a key force in the world we're already
at a point of multipolarity and so and i
think we've already seen the answer
which is that america can't live with it
america is
patently unable and unwilling to accept
that reconfiguration of the global
structure and the way you see that is
not so much in trade diplomacy but in
the tech wars i mean in 2020 the united
states declared
economic war on china in the form of the
outright surgical strike on huawei
huawei is not just a cell phone
manufacturer it was the fourth largest
private investor in r d in the whole
world right and and america's entire
state machine was mobilized to
surgically eliminate that company
america has basically announced that it
will it sees a limit an absolute limit
prospectively starting now already
on china's technological development and
it does not want china to progress
rapidly into
very high levels of sophistication in ai
it does not want china to be a global
player in communications things don't
always go the way america wants it to
they absolutely don't but the question
of course is what price will pay what
time what price will china pay for
overcoming that hostility and that
resistance and you don't think china
will pay a price or a large will be
willing to pay a large one to overcome
it oh no no it will it already is
the question is the question is how high
will the price pay i think the chinese
determination to break this obstacle
must be absolute i mean if there's one
thing that the chinese regime is
committed to its sovereignty
you know whatever one may think about
its broader ideology it is a sovereignty
project it is overcoming the centuries
of humiliation that's the entire project
so to be told by the united states this
far and no further in tech
it's like if america wanted to choose a
way this is why i call it a declaration
of war because if
it really is basically constraining it's
not about seizing territory in the
donbass or one of these rather primitive
territorial projects it is saying that
china will not progress at the cutting
edge of industrial and technological
development and so will therefore not be
a leading player in humanity's great
adventure and that cannot be acceptable
to beijing so we'll have america
reclaiming its
rightful place in the world pretending
to yes pretending to i say that tongue
for me
we'll have maybe a defeated russia yes
um we'll have a already defeated
it hasn't accepted its defeat but to all
the intents and purposes it suffered a
crushing defeat and and and taking its
place maybe if i was to try and fit
things back in the grid that we're all
familiar with will be china
taking russia's place that is
in a bipolar world is that how you see
it play out but yes but no in the sense
that no because
because china with all due respect to
the soviet union china is one sixth of
humanity
china and india are in a special
category of world historic development
the soviet union was the tsarist empire
a multi-ethnic multinational empire of
european proportions for the land
version
analogists say to the ottoman empire at
its fullest extent supercharged by
soviet and stalinist economic
development and that was a mighty thing
capable of competing with the united
states in the high-tech and in military
hardware but still essentially that a
relatively small group of people with a
very large amount of land that is the
legacy of
tsarist imperialism in the 19th century
the most rapidly expanding empire right
so in a sense they are the continuation
as churchill understood it of the great
game between the british empire and and
the tsarist empire china like india when
unleashed as a nation state force
is of equality and all the time sue
generous not comparable with each other
either really as a result of their very
different histories and different
trajectories
and not comparable to any previous
european or western derived experience
of state power because they operate on
not just continental scale
geographically but on one sixth of the
hammurabity at a time right and this is
the continuous correction that we have
to make as especially as people of the
west but also anyone as it were
entrenched in western modes of thinking
about power about
the scale of these of the operations in
both cases right whether it's indian
democracy and its various modern
modifications or the development of you
know the czech stack and america
sorry india's experiments with various
fight new forms of welfare on the one
hand or just the awesome mobilization
capacity of the maoist
maori-derived apparatus in china this is
something new under the sun that we have
to come to terms with and so yes china
will be an antagonist to the united
states it already is but no it will not
be the antagonist that the soviet union
is it's much more fundamental to my mind
it's much deeper it doesn't
make the ideological claims on the other
hand right there's no now viable outside
frankly india there is no very powerful
moralist movement that has any kind of
purchase on any part of the world so
that is different from the soviet uh
model but in terms of a
uh
material challenge in terms of its
significance for the rest of the world
economy it's incomparably larger and
more transformative than the soviet
union even at its height
[Music]
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