Joseph Nye on the balance of power between the United States and China

April 6, 2012

Joseph Nye, Harvard University Distinguished Service Professor and former dean of the Kennedy School, literally “wrote the book” on power and its many permutations. His most recent work, The Future of Power, was just released in paperback. Here, Nye discusses the balance of power between the United States and China.

Q: How is the US presidential election affecting our balance of power with China?

The China issue has been very much in the news recently. This always happens in an election year. So you might be cynical and say this is just the way American politics is done, but in fact there are some real issues with China and some real dangers.

For example, if North Korea collapsed and the Americans and South Koreans intervened and the Chinese also intervened, that could lead to conflict. There’s also the problem of Taiwan and what will happen in the Taiwan Straits. And then the new but increasingly important issue of cyber conflict and what the Chinese are doing in terms of intruding into our systems and, conversely, what we are doing to intrude into theirs.

Lurking behind all this is an anxiety many Americans feel that the United States is in decline and that China is rising. China’s economic growth rate of 10 percent per year, which is likely to go down, is still well ahead of the American growth rate of 2 percent. China’s military is growing at about 13 percent—even higher than its rate of economic growth. So these concerns of rapid Chinese growth, both economic and military, are underlying some of this election year hyperbole.

Q: Is the United States in decline?

It’s useful when you use the term “decline” to distinguish between absolute and relative decline. In The Future of Power, I argue that the United States is not in absolute decline. Absolute decline is what happened to ancient Rome. It was an agrarian economy that succumbed to internecine warfare and then the attack of barbarians—not the rise of another empire. And whatever you might say about the United States, with all our problems that we constantly complain about, the World Economic Forum ranks the US as the fifth most competitive economy in the world—way ahead of China, which is ranked something like number 27. If you look at the role of American universities, America’s reputation for entrepreneurial activity, America’s being on the cutting edge of new technologies like biotech and nanotech, clearly the US is not like ancient Rome.

So absolute decline doesn’t strike me as a very good descriptor of what we’re about. Relative decline may be a bit more useful, in the sense that if you think of a gap between the US and other countries, whether it be China, India, Brazil, or other rising countries—as they grow, the gap between the US and them diminishes. But notice something: As the gap diminishes, you could call this relative decline; you could also simply call it the “rise of the rest.” It doesn’t mean that any one of these countries will necessarily pass the US—a narrowing gap isn’t the same as overtaking or surpassing.

Will China pass the United States?

Well in one sense, the answer is a no brainer. If you have one country with a population of 1.3 billion that is growing economically at 10 percent a year, it’s going to become larger than another country with a population of 350 million and growing around 2 percent a year. If you take exchange rates as another way of measuring the difference or the gap, RAND Corporation came up with an estimate last fall that China’s economy, which is about 40 percent of that of the United States now, might be about 50 percent of the US in 2025. So depending on what measures you take and what years you want to select, it is likely that China will pass the US in terms of total GDP.

But notice something else: even if we use measures of purchasing power parity and total GDP, we miss a lot of aspects of economic power. For example, even if an economy is equal to another in total size, it doesn’t mean that it’s equal in composition or sophistication. We are better off measuring per capita income because a lot of what you’re seeing in terms of total GDP measurement is largely a reflection of population size, not necessarily their capacity for wealth. In terms of per capita income it’s clear that China won’t equal the US in decades. No matter who makes the estimate of purchasing power parity or exchange rates and whether they bet on 2019 or 2030, nobody is assuming there will be equality in per capita income in the first half of the century. People say if you’re growing at 2 percent and they’re growing at 10 percent, you just extrapolate these two curves, and at some point they will cross each other. In fact, history is rarely linear—it always has surprises.

Q: How will China’s economic growth affect its political system?

China is going to have a number of problems as it grows. As countries get richer and you develop the middle class, people want more participation. This doesn’t necessarily mean democracy will come into being as we think of it, but it does mean that there will need to be some degree of participation. And China hasn’t solved that problem. The question of how China is going to manage the politics of increased participation remains an open question.

Also, these estimates of China surpassing the US tend to be focused on economic power. But power has three dimensions, as I point out in The Future of Power. Think of power as the ability to affect others to get things we want. There are really three ways of doing that—one is coercion, the other is payment, and the third is with attraction and persuasion. Military power and coercion remain important, but so does soft power—the ability to get others to do what you want through attraction and persuasion. So focusing on economic power alone is one dimensional, and we’re forgetting that both military and soft power remain important.

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Joseph Nye, Harvard University Distinguished Service Professor

"In The Future of Power, I argue that the United States is not in absolute decline," said Nye.