Speaker 1: 1898 was a special year for the United States. It was the year they won the Spanish American War, they gained temporary control of Cuba and attained a strong influence across nations throughout the globe. It was the start of the USA being the superpower nation of the world. Since then, they have grown and enjoyed a relatively strong period of being the nation at the top, however. Fast forward to 2020 and has been over 100 years of dominance by America. However, there is a nation that is quietly building its economy, its power and its influence across the globe. And we’re coming to a stage where they’re almost as big as the United States. I’m talking about China, of course. OK, so let’s look at some hard factual data. The best way to measure how strong a country is becoming, its true GDP growth, gross domestic product. It basically measures how much a country is producing in any single given year. Now, if we go back over the past 10 or so years, we can see that China’s economy is growing at a much higher rates of knots compared to the USA. You know, in 2019, China had GDP growth of six point one per cent compared to the US’s two point three percent. That’s almost three times the amount of growth. And this big discrepancy in terms of economic growth has been going on for more than 30 years to the point where China is getting within distance of catching up now. The USA GDP, as per the latest figures, is twenty one point four four trillion dollars compared to China’s fourteen point one four trillion.
This means China and now within seven point three trillion dollars in nominal GDP of catching up. But unlike the USA, they’re growing at a faster rate of knots. This is why you’ve got groups of people predicting that by 2030 China will overtake the USA in terms of total production. But, you know, it’s very important to take a step back and look at both countries as a whole. China has a population of around one point four billion. The US’s population is around 330 million. That means China has over four times the amount of people compared to the USA. Essentially, China can have four people working for every one of us a person. This is a huge reason why they are growing at a much higher rate of clip’s compared to the USA. They just have more manpower. And it’s the reason why you have people like Elon Musk predicting China’s economy to be at least twice the size of the states and thus said a thing that will feel pretty strange is that the Chinese economy is probably going to be at least twice as big as the United States economy, maybe three times. If you have half the resources of the counterparty, then you better be real innovative. If you’re not innovative, you’re going to lose. It would only require getting to a GDP per capita half the size of the United States for their economy to be twice the size of ours. At the end of the day, China just has more to work with compared to the current superpower, the USA. And that’s because of all of these resources that they’re able to produce so much and so a lot more than they need to bring in. I mean, just think about how many times you go to the shop to buy some random item. It could be any item. And then you look on the back of it and it says, made in China. There’s a reason for that is because China has the manpower and the resources to produce all of those items. The USA each year tend to have a massive deficit in terms of trade. These figures are from 2013 to 2018. So they’re a tad old.
But as you can see, they’re exporting is around three to four times less than the amount that they import from China. This is because China are so good at producing things and producing them for cheap prices. But it’s not just the USA. They’re China are good at selling, too. It’s all around the world. And basically what this does for China is it brings them a lot of money. Now, China, they are done with their money. They are not like the avocado on toast. Starbucks spending university students that we see in this day and age, they’re more like a frugal Graham. Stefán just make a cheap coffee at home and invest the rest of your money. That’s what they’re doing. They’re investing their spare amounts of cash. Anyone who’s into real estate will tell you this. The Chinese love investing in real estate across the globe, but they invest in everything. China is currently a huge investor in the USA. They own one point one point two three trillion dollars of USA debt as well as this. The government likes investing in infrastructure. This increases their power. One great example of this is China’s trillion dollar plan to dominate global trade. I’m talking, of course, about their one belt, one road system. That they have been developing for over seven years now, the one belt, one road system is a global infrastructure development plan, investing and trade throughout more than 60 countries. Basically, what they’re doing is building trade routes across the land and sea that connects all of these countries to China. The Chinese government calls the initiative a bid to enhance regional connectivity and embrace a brighter future. But some people see this as China’s plan for world domination. You know, these potentially participating countries with this one belt, one road system, they account for 62 per cent of the entire world population and more than 30 percent of the world’s GDP. Say what you want about the plan. What is doing is strengthening China’s hand across the globe. And, you know, this does mark a change in China’s strategy since it started growing and competing for superpower status.
Years ago, China just wanted to build and grow quietly. As former Chinese leader Deng Xiaoping famously said, it’s important to hide your strengths and bide your time with their new strategy. It appears that China, they’re less afraid of speaking up and letting their presence known. And the other thing I should mention is 5G. China is working nonstop to be first in the world, to have a nationwide 5G network. Not only do they want that nationwide, but they want their 5G infrastructure across the globe. Huawei, a Chinese company which is linked with the Chinese government, has plans to develop the network for 5G for a range of other big countries across the globe. Not only is this profitable for the country, but also allows them to gain insights and get data from the potential billions of people using the network. However, Huawei is 5G technology, which is currently the leader in 5G. It has been banned from a range of countries, including the USA, Australia and now Britain, which in my opinion is a good call. But this isn’t the only field that China are competing heavily on. Previously, when it came to social media, it was American companies that became big throughout the globe Facebook, Instagram, Snapchat, Twitter, Vine, etc.. All of these are American companies. However, recently it’s been China that has developed the latest app that has spread throughout the world. I’m talking about tech talk, of course, which is fast becoming one of the biggest social media apps. As you can see right now, it’s number one in the USA in terms of getting downloaded and it’s not even an American company as Chinese.
So it just shows you how strong China is becoming with regards to technology and innovation. But I want to give you both sides of the picture. It’s no guarantee that China will become the next superpower, even though you’ve got the likes of Ray Dalio and Elon Musk, who think it is likely that they will. We got to talk about the Chinese government’s intervention, which does stifle their potential. Now, we all know that the Chinese government likes to play a strong hand and anything that has to do with business or finance. This means that any business done with a Chinese company is going to have some government intervention with it. This does not bode well with the free market side of the economy and long term, it will likely stifle their growth. And it’s because of this and other reasons why the world is not on board with China becoming the superpower. They don’t like the fact that China have used underhand tactics to steal trade secrets from T-Mobile and other companies in the world just does not like the communist government policies. They generally prefer democracy. Again, this will play another huge part in stifling China’s rise to be a global superpower. The fact that the world is not on board with it. Although the U.S. has many flaws, they are still a democracy with ideals of freedom and liberty. Which countries around the world like. So the USA have this in their favor. But the last big factor that is going to slow down China’s rise to becoming a global superpower is the fact that they’re not exactly well settled at home. What I mean by this is if you look at China, they have over one billion people, which puts a burden on its resources and they have an aging population that is unbalanced and sex as well as their youth looking to leave the country and find a better life elsewhere. So, yes, it’s true. China have a lot of things going for them. Their economy is growing almost three times faster than the current superpower, the USA. They are also growing stronger in terms of global trade, influence and technology. But they’ve also got a lot of problems that they have to overcome if they want to become the dominant superpower of the world. One of those big hurdles will be the fact that most big countries around the world that just got on board with the idea of China being the dominant superpower.
But can China do it? The economics of everything says yes, but we’ve got to realize the world system is about more than just pure economics, relationships and influence media diplomacy. They all play a massive part as well at the end of the day. Only time will tell the true answer to this question.