Does China Threaten U.S. Global Economic Dominance - Research Paper Example

In the recent global economic crisis of 2008-2009, China also managed to recover faster than United States which is still in the process of recovering from high unemployment rate, national debt and widening fiscal deficit. This disparity in economic performance led many to consider that perhaps the balance of power has already shifted from United States to China. To assess whether China threatens U.S. global economic dominance, it would be necessary to examine the factors that could threaten the US position as a global economic superpower and make a comparison between the two countries.

That way, we would know if China is already threat to US’s global economic dominance. Economic dominance is a critical barometer of being a superpower because economics drives everything including a country’s ability to influence the world. Economic power includes absolute GDP (Gross Domestic Product) or a country’s total output that will translate to resources that can be used for defense purposes, projection of power and ability to influence the world. In totality, what really would matter if a certain country already threatens the economic dominance of United States is if its economy is already near as large as that of the economy of United States.

In this regard, US economy is still about eight times bigger than China and has massive industrial and technological complex to support and sustain the growth of its economy.  Its currency is still used as the world's reserve currency and it is not likely that the US dollar will be replaced by other currency soon or specifically by the Chinese Yuanii.  China's economy in contrast is eight times smaller than United States.  Further, China is burdened with its huge population of 1.3 billion.

Such that when its GDP is divided among its 1.3 billion population, its GDP will translate to a very low per capita income.  In 2007 pre-economic crisis, China’s per capita income was only $2,000 compared to US per capita income of $42,000.  China is not yet considered developed because there are still 400 million Chinese who lives in its rural area who survive on less than $2 per day and another 200 million lives on less than a dollar a dayiii.   China’s weakness includes its lack of multinational corporations.

 China does not even have its own industrial complex and its economy is heavily dependent on Western enterprise.  If US pulls out of China, China will be on its knees because it is heavily dependent on US industries and market. United States economic might translates to its overwhelming military superiority over China.  Military superiority is a critical dimension of power because it enables a country to assert itself when it needs to defend its interest in the global arena and that includes economic interest.

 The gauge of military superiority is not limited to the number of troops but also includes the sophistication of its military hardware.  The huge size of US economy enables it to allocate a military budget that is not equaled by China.  It only allocates 4% of its total GDP on defense but due to the sheer size of its economy, this translates to a $600 billion military budget.   Compared to US budget of $600 billion for military expenditure, China has only a military budget of  $50 to $70 billion (although Pentagon doubt that such figure is understated) which only comprises one eight