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

NDTV Profit

23 May 202207:40

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

00:00

🌏 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.

05:02

💼 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

The concept of China becoming the world's dominant economy refers to the possibility of China's GDP surpassing that of the United States. The video discusses how this shift could impact global power dynamics, with China already being a major player in technology, raw materials, and energy markets. Despite economic setbacks like real estate issues and private sector debt, China's current influence on the world economy is significant and could redefine global multipolarity.

💡Multipolarity

Multipolarity refers to a global order where multiple countries have significant influence, as opposed to a unipolar or bipolar world dominated by one or two superpowers. The video argues that even before China overtakes the US economically, the world is already in a state of multipolarity, with China playing a critical role in various sectors, such as technology and energy.

💡Tech Wars

The term 'Tech Wars' is used to describe the economic and technological conflict between the United States and China, particularly in fields like artificial intelligence and communications. The video highlights the US's actions against Chinese companies like Huawei, which was once the fourth-largest private investor in R&D globally. This conflict is framed as an attempt by the US to limit China's technological advancements and prevent it from becoming a leader in cutting-edge technologies.

💡American Indo-Pacific Strategy

This strategy refers to the United States' approach to countering China's influence in the Indo-Pacific region through alliances such as the Quadrilateral Security Dialogue (Quad), which includes the US, India, Japan, and Australia. The video explores India's role in this configuration, given its complex relationship with China and its historical ties with Russia. The strategy is seen as part of the broader effort to contain China's rise and maintain a balance of power in the region.

💡Sovereignty Project

The 'Sovereignty Project' in the context of China refers to its goal of asserting its autonomy and overcoming historical humiliations imposed by foreign powers. The video suggests that China sees US attempts to limit its technological and economic progress as a direct threat to its sovereignty. Thus, it is determined to break through these obstacles, making its pursuit of technological self-sufficiency a critical national objective.

💡Economic War

Economic war refers to the deliberate use of economic measures, such as sanctions or trade restrictions, to weaken an adversary's economic and technological capabilities. In the video, the US's actions against Huawei and other Chinese tech firms are framed as an 'economic war' aimed at constraining China's development in high-tech industries and preventing it from becoming a global leader.

💡China's Technological Development

This term encompasses China's efforts to advance in fields such as artificial intelligence, telecommunications, and industrial technologies. The video discusses how the US is actively trying to limit China's progress in these areas through export controls and restrictions on technology transfers. This struggle is central to the ongoing competition between the two countries for global technological leadership.

💡Russia's Role

Russia's role in the context of the video is discussed as a declining power that once held significant influence as the Soviet Union but is now seen as being overshadowed by China's rise. The video suggests that China might take on a position similar to that of the Soviet Union during the Cold War, but with far greater economic and technological capabilities, making it a more formidable challenge to the US.

💡Quad

The Quad (Quadrilateral Security Dialogue) is a strategic forum that includes the US, India, Japan, and Australia, aimed at countering China's influence in the Indo-Pacific region. The video mentions that India, with its rivalry with China and historical relationship with Russia, has to make strategic choices about whether to align more closely with the Quad or pursue its own independent path.

💡Geopolitical Reconfiguration

Geopolitical reconfiguration refers to the changes in the global balance of power due to the rise of new economic and military powers like China. The video discusses how China's growth, coupled with Russia's decline and the US's resistance to accepting a multipolar world, is leading to a reconfiguration of global alliances and power structures, making the international landscape more complex.

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.