Sun, Dec 30, 2012 - Page 9 News List

China is the elephant in the situation room

The significance of China’s development in shaping the future of the world is fundamental

By Ian Bremmer  /  Reuters

2. Diffusion of power: Without a hegemon, power will shift to “coalitions in a multipolar world.”

This is spot-on. However, if power is shifting away from the US and its allies, where is the bulk of it shifting to? According to the NIC report, China will provide one-third of global growth by 2025, even if its growth rate should slow considerably. As the US scales back its role on the global stage, the needs of China’s economy are tying its leaders ever more tightly to the world’s conflict zones.

3. Demographic patterns: We’ll see more aging, urbanization and migration.

China is ground zero for all three of these critical demographic trends and the interplay between them. According to some studies, the ratio of Chinese workers per retiree could drop from eight to one today to two to one by 2040. That is a product of a rapidly aging population — and a one-child policy that will keep the labor force from growing fast enough to keep pace. With “two Chinas,” one urban and empowered, the other impoverished and rural, urbanization and migration will cause significant turbulence in China’s social and economic fabric.

4. Food-water-energy nexus: “Demand for these resources will grow substantially.”

For the most part, demand from the developing world — mainly China and India — for these resources will drive conflict surrounding them. Today, China and India are home to 37 percent of the world’s population — and just 10.8 percent of its fresh water. Their share of the population will grow — as will demand for water as their middle classes grow.

Food is a similar story. Consider meat, which is particularly grain-intensive (and so requires a lot of water).

In 1978, China’s overall meat consumption was one-third that of the US’; today, it is double. China now eats one-quarter of the global supply of meat, or 64 million tonnes a year. However, per capita, it still only consumes one-quarter as much meat as the US. Expect the gap to close-with dramatic ramifications for global food supplies — as China’s middle class grows through 2030.

GAME-CHANGERS

1, 2, 3. Crisis-prone global economy, governance gap, potential for increased conflict: Will multipolarity lead to a collapse or a greater resilience in the global economy? Will a governance gap between countries’ leadership capacities and changing realities overwhelm governments? Will we see more conflict?

Whether a multipolar world makes the global economy more or less volatile will increasingly depend on China’s trajectory and the role it chooses to play on the global stage. In terms of the governance gap in China, the NIC notes that there is a chance that demand for democratization will vastly outstrip Beijing’s progress in that direction. The NIC sees short to medium-term volatility arising from rapid democratization and “a democratic or collapsed China” in the longer term, with the bright possibility for huge gains should China’s state structure turn democratic.

Unfortunately, in the case of sweeping democratic change, I just cannot get past that word “collapse.”

Think about the Soviet Union in 1991. Then remember that China is on pace to become the world’s largest economy. In other words, there are a wide range of possible events in China that would have a starkly different — and enormous — impact on what the world looks like in 2030.

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