Terrific perspective on China’s growing importance, the coming fight in Congress over the Trans-Pacific Partnership (TPP), and the standing of the United States in a changed world in an op-ed in today’s New York Times by Clyde Prestowitz, founder and president of the Economic Strategy Institute.
He delivers his punch lines in the last four paragraphs. Here are excerpts from three of them:
[W]hereas all trade roads once led to (or through) the United States, today it is just one part of a global network of supply chains.
If anything, America is too often at the end of those chains, as the global consumer of last resort. It’s not investing in domestic, let alone global, infrastructure. It is the world’s largest debtor, and its role in the world economy is primarily to borrow and consume. It is hugely dependent on China to fund its borrowing. Were it not for the fact that the dollar is the main global currency and that Washington can still borrow in the dollars it prints, the country would have gone bankrupt long ago.
In comparison to this, China is now by several important measures the world’s largest economy, with about $4 trillion of reserves that it is investing in global infrastructure like the One Belt, One Road project, a multidecade, multitrillion-dollar effort to better connect China with markets in the Middle East, Europe and other parts of Asia. It is now the biggest foreign investor in most of the developing countries of Latin America, Africa and the Middle East. It is also the biggest foreign investor in Australia and much of Europe.
I take a much dimmer view of China’s outlook and prospects than Prestowitz, and a much more optimistic view of what’s ahead for the U.S. But his view is well worth pondering.