As you are probably aware, Arvind Subramanian is the current Chief Economic Advisor to the Government of India. He is author of Eclipse: Living in the Shadow of China's Economic Dominance (2011) which foreshadows the rise of China to superpower status in this century.
Many American experts on economics and international finance are confident, even jingoistic, about America's economic preeminence in the coming decades. America, to them, is the empire on which "the sun never sets". Subramanian seeks to question this assumption of American exceptionalism (as he puts it, the belief that "something special about the nation's past and present will carry it into the future").
To do this, Subramanian formulates an Index of Economic Dominance based on factors such as resources, trade and external finance. Subramanian goes into painstaking detail into the strengths and weaknesses of this approach. Having formulated his index, he forecasts the dominance of global players into the future, until 2030. This analysis, as Subramanian writes, "yields some surprising conclusions. First, the economic dominance of China relative to the United States is more imminent (it may already have begun), will be more broad-based (covering wealth, trade, external finance, and currency), and could be as large in magnitude in the next 20 years as that of the United Kingdom in the halcyon days of empire or the United States in the aftermath of World War II."
This naturally leads to the question of how safe will the world be under a dominant China and whether there will be another World War. Subramanian evades these questions more or less saying that China will not try to destabilize the world and will learn from the mistakes of others such as a belligerent WWII Japan and Nazi Germany.
One important point that Subramanian makes is that the US dollar may lose its reserve currency status as early as 2021 with the Chinese renminbi probably becoming the next international reserve currency. This would need further reforms on China's part, such as freeing the renminbi, but China would be well on its way to doing so.
China's rise will not necessarily be crisis-free. Writing this book in 2011, Subramanian envisaged a crisis in China in 2013 or 2014 (China is undergoing a crisis currently). But China will claw its way back according to Subramanian and from then on there will be no stopping it.
The book makes a strong case for a dominant China in the coming decades, and even a slightly less dominant India, but it is clear that the West is in a decline.
Many American experts on economics and international finance are confident, even jingoistic, about America's economic preeminence in the coming decades. America, to them, is the empire on which "the sun never sets". Subramanian seeks to question this assumption of American exceptionalism (as he puts it, the belief that "something special about the nation's past and present will carry it into the future").
To do this, Subramanian formulates an Index of Economic Dominance based on factors such as resources, trade and external finance. Subramanian goes into painstaking detail into the strengths and weaknesses of this approach. Having formulated his index, he forecasts the dominance of global players into the future, until 2030. This analysis, as Subramanian writes, "yields some surprising conclusions. First, the economic dominance of China relative to the United States is more imminent (it may already have begun), will be more broad-based (covering wealth, trade, external finance, and currency), and could be as large in magnitude in the next 20 years as that of the United Kingdom in the halcyon days of empire or the United States in the aftermath of World War II."
This naturally leads to the question of how safe will the world be under a dominant China and whether there will be another World War. Subramanian evades these questions more or less saying that China will not try to destabilize the world and will learn from the mistakes of others such as a belligerent WWII Japan and Nazi Germany.
One important point that Subramanian makes is that the US dollar may lose its reserve currency status as early as 2021 with the Chinese renminbi probably becoming the next international reserve currency. This would need further reforms on China's part, such as freeing the renminbi, but China would be well on its way to doing so.
China's rise will not necessarily be crisis-free. Writing this book in 2011, Subramanian envisaged a crisis in China in 2013 or 2014 (China is undergoing a crisis currently). But China will claw its way back according to Subramanian and from then on there will be no stopping it.
The book makes a strong case for a dominant China in the coming decades, and even a slightly less dominant India, but it is clear that the West is in a decline.
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