While notions of a US decline are premature and exaggerated, there are real problems down the road that need to be addressed.
Standard measures of prosperity like Gross Domestic Product (GDP) show that there is little change in the American share for the last forty years as it remains around 25 percent of the world’s GDP. In 1980, the US share as a proportion of the world GDP was 25.16 percent; today, forty years later, the proportion is roughly the same at 24.2 percent. The US almost matches the share of its proportion of global GDP by spending some 27.3 percent of the worldwide spending on R&D as compared to China’s 21.9 percent. The continuing attraction of the US as the foremost international destination for research and education gives it the ability to acquire talent from all parts of the world. Yet, in the eyes of the world, the US setbacks—beginning with the war in Vietnam and followed by the disastrous interventions in Iraq and Afghanistan—have provided space for its rivals to advance.
The US almost matches the share of its proportion of global GDP by spending some 27.3 percent of the worldwide spending on R&D as compared to China’s 21.9 percent.
The US-created global trading system was skilfully used by China to emerge first, as the factory of the world, and then, as a steadily growing military power. With its focus on the War on Terror and disasters in Iraq and Afghanistan, the US began to neglect large parts of the world. Within the US too, political trends emerged questioning the American global role and the premises of liberal internationalism, which further questioned the US paying a disproportionate share for everything—global security and the UN system. This led to the election of Donald Trump as the President in 2016 and many of the issues that were simmering came to a boil. The Trump administration focused on a trade war with China, disdained international organisations, and walked out of the Trans-Pacific Partnership (TPP). Worse, the President was dismissive toward America’s own military allies and partners and demanded they pay a fair share for their security. And when the world was hit by the COVID-19 pandemic, the US declined to take the global leadership to combat it.
Political trends emerged questioning the American global role and the premises of liberal internationalism, which further questioned the US paying a disproportionate share for everything—global security and the UN system.
Where once, in the 1950s and 1960s, American assistance built up Europe and transformed the educational and agricultural sector in India and other countries, China has come up with Belt and Road Initiative to provide hard infrastructure across the world. While there is a lot of talk about how countries have gotten into a debt trap through Chinese projects, the reality is that the Chinese are the only game in town. Between 2001 and 2018, China provided loans worth US$ 126 billion to African countries and invested US$ 41 billion. While the US has been trying to match the Chinese, it has little to show for it as of now. The latest proposals of the G7 to unleash US$ 600 billion remain only on paper.
The Trump administration focused on a trade war with China, disdained international organisations, and walked out of the Trans-Pacific Partnership (TPP).
Global hegemony, which it attained in 1945, remains a key to its global perspective. As long as the US was top-dog in the economic and military areas, this was seen as logical. But we are at a point where the Chinese economy has already overtaken that of the US and in the next 20 years, it may be several times larger, enabling China to match the US military expenditures too. China has a vision of its own—born out of its own global standing in history—that it is the Middle Kingdom. Whether the US can maintain its current hegemonic status is moot. But without doubt, it will remain a major, if not dominant, world power well into the future. However, to maintain that status and compete successfully with China, it needs to reboot its soft power, based on the attraction of its social, political, and economic system. It must become as much the leader in security and trade-related issues, as women’s rights, protecting the environment, and fighting for democracy and racial equality. It already has a formula for dominance in its alliance system, but it needs to make them more transparent and workable. More than that, it must find a way to live with other power centres like China, a path that is not necessarily dependent on its global hegemony. The world is learning of the global consequences of the Ukraine war the hard way. A US–China conflict, perhaps involving Taiwan, could have even more serious repercussions.
The possibility of a Trump or a Trumpist in power could once again question the utility of the alliances and introduce uncertainty and inconsistency into the US global policy.
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Manoj Joshi is a Distinguished Fellow at the ORF. He has been a journalist specialising on national and international politics and is a commentator and ...Read More +