Can China Afford to Be The World’s Next Superpower?

(Bloomberg) --

Donald Trump has launched a trade war with China, worried that previous administrations have unwittingly been helping Beijing to overtake the U.S. But can China afford to be the world’s next superpower?

The average Chinese, after all, is still poorer than the average Mexican. China’s greatest natural resource — its 1.4 billion-strong population — has largely finished urbanizing, is already aging and, as soon as 2023, will start to shrink. No superpower has developed in those circumstances before.

Nor has any big country escaped the so-called middle income trap — the theory that emerging economies tend to get marooned between $10,000 and $15,000 per capita GDP — without liberalizing and developing a reliable rule of law. China, under President Xi Jinping, is doing the opposite.

Xi’s supporters say their country is different and Western economic models just don’t apply. China will be a great power, they argue, but one entirely unlike the U.S. There’s evidence to suggest China can afford to be whatever it wants: Beijing increased defense spending more than tenfold since 1990, while actually reducing the military’s share of the government’s overall budget.

Not even China knows yet what kind of superpower it will be. The answer, though, is likely to determine issues of war, peace and global economic growth for decades to come. 

Can China Afford to Be The World’s Next Superpower?

Global Headlines

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What to watch today:

  • U.K. Prime Minister Theresa May arrives in South Africa on a five-day visit to three African nations. Speaking on the flight to Cape Town, she said leaving the EU without a deal “wouldn’t be the end of the world.”

  • With party nominating contests in Arizona, Florida and Oklahoma, Toluse Olorunnipa and Shobhana Chandra report that Trump has made no real progress on his promise to raise the wages of America’s “forgotten man and woman” and what that could mean for the midterms.

And finally ... Northern Ireland has overtaken Belgium for a democracy with the longest peacetime stint without an elected government. Some protests are planned to mark the 589 days since the power-sharing accord collapsed between the two largest parties, the DUP and Sinn Fein — an initial dispute over a subsidized energy program has widened to take in grievances including the rights of Irish language speakers. In London, May’s government seems to be giving the crisis little attention, but as she’s finding with issues on the Irish border, ignoring problems in Northern Ireland rarely makes them go away.

Can China Afford to Be The World’s Next Superpower?

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