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The Chinese elite is convinced that the US is in irreversible decline. So report it Jude Blanchette of the Center for Strategic and International Studies, a respected Washington-based think tank. What has been happening in the United States in recent years, especially in politics, supports this perspective. A stable liberal democracy would not elect Donald Trump (a man lacking all the necessary qualities and abilities) to national leadership. However, the notion of the decline of the United States is exaggerated. The United States retains large assets, especially in the economy.
For a century and a half, the US has been the most innovative economy in the world. This has been the basis of their world power and influence. What does its innovative power look like today? The answer is: pretty good, despite China’s competition.
Stock markets are imperfect. But the value investors place on companies is at least a relatively unbiased assessment of their prospects. At the end of last week, 7 of the 10 most valuable companies in the world and 14 of the 20 best, were headquartered in the United States.
Were it not for Saudi oil, the five most valuable companies in the world would be American technology giants: Apple, Microsoft, Amazon, Alphabet and Facebook. China has two valuable technology companies: Tencent (in seventh place) and Alibaba (in ninth). But these are the only companies in China among the top 20 companies. The most valuable European company is LVMH, in 17th place. Still, LVMH is just a collection of established luxury brands. This should be of concern to Europeans.
When we look only at tech companies, the U.S. has 12 of the top 20; China (with Hong Kong but excluding Taiwan) has three; and there are two Dutch companies, one of which, ASML, is the largest manufacturer of machines that manufacture integrated circuits. Taiwan has Taiwan Semiconductor Manufacturing Company, the world’s largest computer chip manufacturer, and South Korea has Samsung Electronics.
Life sciences are another crucial sector for future prosperity. Here are seven European companies (including Switzerland and the UK) in the top 20. But the U.S. has seven of the top ten and 11 of the top 20. There is also an Australian company and a Japanese company, but no Chinese companies. .
In short, American companies are dominant globally and almost all the most valuable non-American companies are headquartered in allied countries.
This stock market-based approach obviously excludes Chinese state-owned enterprises, as well as non-listed ones. Huawei, world leader in telecommunications equipment. China claims leadership in other areas, especially the high-speed rail. But the origin of this technology was elsewhere. Rather, China’s success in rail and various other areas is based on the construction of high-speed, large-scale infrastructure.
It could be argued that dominant American companies are no longer young. In addition, the American tech giants have bought many companies set up elsewhere. Still, it’s probably one of his strengths.
In addition, the US continues to lead venture capital. In accordance with Storage room, venture capital investment amounted to $ 487 billion from 2018 to the first quarter of 2021 in the US, compared to $ 379 billion across China, the United Kingdom, India, Germany, France, Canada, Israel and Singapore . Even in relation to GDP, US investment was only lagging behind Israel and Singapore. In international patent applications, China was first in 2019, with 59,045 compared to 57,705 in the United States. But the rest of the top ten countries were allies of the US. In combination with the United States, its patent applications were nearly 175,000.
Universities are also important. In a well-known ranking, 5 of the top 10 universities and 10 of the top 20 universities are American and only one is Chinese. Also, as Richard McGregor states in his excellent book Xi Jinping: the reaction, centralized control in China is getting tighter. This control never fosters sustained originality.
Overall, the US landscape is not much of a collapse in economic irrelevance, especially when combined with its allies. While China will soon have the largest economy in the world by all measures, it will still not be the most productive or innovative. In addition, the United States and its allies should move forward for a long time, even if Xi’s rule does not in fact ossify the Chinese economy.
The biggest threat to the role of the US in the world lies in itself, not in China. If you elect leaders who despise democracy, ethnic diversity, global alliances, science, and reason, it will surely diminish. Failure of Republicans in repudiation of former president makes this more likely. Still, this would be the self-inflicted result of a failure to create a shared vision of a better future.
The Chinese elites would then be right that the United States is heading for ruin. But they may still be wrong in assuming that their own direction is better. Putting 1.4 billion intelligent humans under the control of a part, controlled by a man, may not be the best way.
A great asset of the United States has been its ability to attract the best and brightest in the world. Two Indian-born men now run Microsoft and Alphabet. One of Google’s two co-founders was an immigrant from the Soviet Union. The nativism now on display goes against that. But diversity, within a framework of shared institutions and values, could still be a huge source of vitality in the strength of the United States in business, culture, and politics.
The U.S. is unlikely to continue to be the world’s dominant power, simply because the Chinese population is more than four times larger. Yet, as long as the U.S. is democratic, free, and open, it has many chances of keeping the world’s most influential country far from the future. If you decide to be what your reactionaries want, you will fail. But that would be his own choice, not his destiny.
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