THE BLOG
12/15/2014 11:37 am ET Updated Feb 08, 2015

US Era of Dominance Is Dwindling as China Takes Over the World Economy

Most Americans might have not heard about the International Monetary Fund (IMF) latest announcement: The U.S. is no longer the world largest economy; China is. Be that as it may, I am not surprised that China took over the world economy as the era of American economic dominance and global leadership has been gradually declining in the last decade or so.

Against this backdrop, I am wondering what it means for the future of our nation. What's important to highlight is how the rise of China, which has been in the works for quite sometimes, should remind us, Americans, of the inevitable shift in world order. This new shift highlights two things: One, China's takeover of the world economy confirms the shift of wealth from the West to the East; and two, whether China's new economic ranking suggests the inevitable expansion of its military power. Whatever, the case might be, the important fact about this change, in my opinion, is contributed to two factors (a) China's long-term vision, and (b) its ability to craft an economic and financial strategies decades ago that led to this outcome.

There are different economic dimensions I could address in the wake of this announcement by the IMF; however, my focus would be on the strategic implications this change in ranking might have on the global balance of power. In light of these dynamics, international security analysts on both sides of the Atlantic are questioning the wisdom of the U.S. government's decision to continue borrowing money from China. U.S. policymakers justify the borrowing in order to sustain our military presence and engagement in the Middle East. One might ask; what does borrowing money from China have to do with our presence in the Middle East? The answer goes beyond what one could imagine. The cost of the invasion of Iraq, for instance, was estimated at $3.9 trillion, most of it borrowed from China. I wonder if the Chinese are laughing at how irresponsible U.S. policymakers are when they approve provisions to borrow more money. The Chinese are most likely saying: Great, the U.S. has no problem subsidizing our economy.

To put this within a strategic context, the United States' entanglement in the Middle East, extension of our military presence in Afghanistan, lack of fiscal discipline, dysfunctional congress, and a sagging economy, all suggest the failure of the U.S. government to prevent China from taking over the world economy. And why should we be surprised, when all policymakers are doing is arguing for more engagement in conflicts overseas, and which programs to cut so they can fund the war machine. What policymakers are not asking are questions that matter the most: How can we invest in our sluggish economy, dysfunctional education system, and crumbling infrastructure, among others? Needless to say, the Washington establishment is already talking about allocating a trillion dollars to revamp and rebuild our aging nuclear arsenal.

Not to drift away from addressing the strategic implications this new ranking might have on competition over Middle East resources (oil), I'll argue that China has already developed strategies to make its presence felt in the region. For instance, China's sales of weapons to countries like Iran, Iraq, North Korea, and Pakistan, among others are worthy of close examination because the sale of these military hardware includes missile technology.

This approach, however, is not a new phenomenon. The interest has been revealed through the writing of foreign policy professionals and former U.S. officials including Zbigniew Brzezinski. In his role as national security adviser, Brzezinski always viewed China as a major player in the Geo-strategic region of Eurasia and the Middle East. Given its current status as the world leading economy, it is logical for China to seek access to economic resources in Middle East in addition to a more assertive posture in its regional territorial disputes. What is important to fathom is that the shift(s) in the balance of power and world order would certainly be felt as China will forge other means of dominance (soft power). My assumption is that Western countries, including the U.S., have not realized the speed by which geopolitical changes paved the way for China to lead the global economy as confirmed recently by the IMF.

While the U.S. is enmeshed in its political squabbling as a result of the paralysis of Congress, China and Russia are strengthening their economic ties with military cooperation on the horizon. This cooperation provides China a historical opportunity to expand its sphere of influence; thus, compelling Washington to reconsider its Geo-strategic calculations for Asia.

Where do we go from here? The answer depends on who you ask. What is evident, in my opinion, is that China's takeover of the world economy will be subject to many interpretations in Western capitals. Western politicians are asking: Can we still impose our will on the rest of the world including China? The answer might not be that simple now that China takes over the world economy; thus, suggesting the beginning of the end not only for the U.S. era of dominance, but also Western hegemony in its broader context. After all, the sleeping giant is awake and the world would soon be saying; good morning.