While the United States remains the world’s most powerful country – militarily and economically – its place on the international stage is changing. The wealthiest person on earth is Mexican, the tallest building is in Taipei (soon to be surpassed by one in Dubai), and the biggest factories are in China. India’s film industry, Bollywood, is now the world’s largest, producing more movies and selling more tickets than Hollywood. And when experts identify the multinational companies that will become leaders in the future, they point to firms in Latin America, India, South Korea, Taiwan, and Malaysia.
The US has even surrendered its supremacy in shopping malls. Only one of the world’s Top 10 malls is in the United States. And who’d have guessed that an American shopaholic with an urge to visit the biggest mall on earth would have to fly to Beijing?
These developments illustrate the central point of Fareed Zakaria’s illuminating and timely new book The Post-American World. Over the past couple of decades, a global transformation has seen countless countries experience remarkable economic growth. While the US will remain an economic power, the days of American economic preeminence, which characterized the 20th century, are over. According to Zakaria, this points not to the decline of the US, but to “the rise of the rest.”
Zakaria writes that the global economic explosion is a consequence of political change (the fall of the Soviet state discredited central planning); the free movement of capital around the world (the daily flow of trillions of dollars lubricates the global economy); and the communications revolution (the Internet and cellphones have transformed business by driving down costs and increasing efficiency).
The rise of India and China
In presenting this story, Zakaria, editor of Newsweek International and an astute analyst of US foreign policy, looks closely at economic developments in China and India, and assesses how the spread of global wealth will affect the US.
With annual economic growth averaging 9 percent for the past 30 years, China has emerged as a global economic powerhouse. In 1978, the country made 200 air conditioners; in 2005, it made 48 million. It produces two-thirds of the world’s photocopiers, microwave ovens, and shoes, and now exports as much each day as it did in all of 1978.
The average income for a Chinese person has increased sevenfold during that time, allowing 400 million people to escape poverty. While the country faces enormous challenges (how, for example, will the government reconcile its policy of economic liberalization with its refusal to democratize the political system?), China will prove a formidable competitor for the United States and a key concern for US policymakers.
Zakaria’s discussion of India is particularly incisive. Born and raised there (he left to attend Yale University and later Harvard University), he details the changes washing over the country, which, like China, is developing at warp speed. While there are key differences between them (India is a democracy), India’s remarkable growth, like China’s, has drastically reduced poverty. More Indians have risen from poverty in the past 10 years than in the previous 50.
Though the Indian economy is far smaller than China’s, experts predict that by 2020, its gross domestic product will equal Britain’s. Driven by a high rate of personal consumption, India’s economy, based mainly on services and industry, is unlike any in the developing world. To be sure, hundreds of millions of Indians remain unspeakably poor, but Zakaria claims that the economic expansion can be felt everywhere, “even in the slums.” And US policymakers and business leaders will be glad to know that the Indians are overwhelmingly pro-American.
What role will America play?
Zakaria concludes with an assessment of America’s place in this new era. The US should not be alarmed, he writes, for it will not be an anti-American age. Indeed, the American political and economic model is admired across the globe.
America can maintain its considerable economic power, Zakaria argues. Immigration and American higher education will help the economy remain vibrant and innovative. And America’s existing strength in nanotechnology and biotechnology, two cutting-edge industries, will catalyze American economic growth well into the 21st century.
Nevertheless, the US confronts real challenges. Zakaria sees the American political system – captured by “money, special interests, a sensationalist media, and ideological attack groups” – as the country’s “core weakness.” It serves partisan battles, he writes, but solves no real problems.
Zakaria is also concerned that in recent years American leaders have seemed “clueless about the world.” While the Middle East is important, it is time to stop worrying mainly about the ancient conflict between Sunnis and Shiites in Iraq. Instead, US policymakers should start thinking seriously about the 21st century. Forging constructive relationships with China, India, Russia, and Brazil will be essential, for it is there that the “future is being made.”