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United States trails China but still can win the economic war: Paul Heise

Posted 2/20/19

Western foreign policy analysts are getting the heebie-jeebies about China outpacing the United States economically to take the lead in international economic trade and investment.

By 2020, …

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United States trails China but still can win the economic war: Paul Heise

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Western foreign policy analysts are getting the heebie-jeebies about China outpacing the United States economically to take the lead in international economic trade and investment.

By 2020, Chinese output will be larger than the U.S. output. China is outpacing Europe and the United States in just about everything you can measure. The threat is real; the outcome is uncertain; the BRI is central.

China is building what is known as the Belt and Road Initiative, or the BRI. The Chinese government has officially named it the “Silk Road Economic Belt and the 21st Century Maritime Silk Road.” They claim this is “the largest infrastructure project in the history of the world.”

It probably is. This Silk “Road” will provide a land bridge from Mongolia to Kazakhstan and on to Europe. The “belt” is the water route: a string of ports with all the infrastructure that would facilitate trade with other nodal cities. It will stretch from Shanghai to Pakistan and to the Red Sea with Kazakhstan a central focus. The BRI is the tool China has chosen to re-establish its economic and cultural leadership role.

The Belt-Road Initiative might be looked on as just the next step in transport technology. That would be a mistake. It would be better to recognize The Belt Road as a giant step forward in economic integration and international politics. In modern times, the United States conceived the Pan-American Highway and built the Transcontinental Railroad, the Russians built the Trans-Siberian Railroad and the British built the Cape Town-to-Cairo Railroad. The Chinese are now proposing an order of magnitude greater.

The whole project is a replay of the “great game,” a name given by the British to a series of wars between Great Britain and Russia for the control of trade in Kazakhstan and Central Asia. This same confrontation was first fought earlier in 1840-1890, in the same place, Kazakhstan, and for the same reason — control of the trade routes in Central Asia. Landlocked Kazakhstan is important even to a maritime power such as Great Britain or the United States.

Today only two countries are competing for the hegemon role: China and the United States. The country that wins the great game will organize society.

China, if it wins, will organize society under the leadership of a man such as president XI Jinping and the Communist Party. The United States would organize society under the rules of capitalism — private property and corporate profits.

The question is, whose rules and whose values will run the world? The Chinese are winning in the great game but the United States is still the indispensable nation and the reigning hegemon. The United States has an opportunity to apply the game to all of Central and South America, and any other area that feels it will get a better deal from America than from the Communist Party. Imagine a world where the United States is competing to provide the best infrastructure money can buy.

The United States still can win in the Americas if it is determined to leave the 20th century behind. The greatness President Donald Trump aspires to is the greatness of a 20th century, militaristic empire of regime change and missing limbs.

Paul A. Heise, of Mount Gretna, is a professor emeritus of economics at Lebanon Valley College and a former economist for the federal government.