CHINA’S REAL POWER REVEALED


  • BIDEN’S AMERICA “WITHIN TOUCHING DISTANCE” OF LOSING GLOBAL LEAD
  • MILITARY POWER ALONE SEPARATES CHINA AND THE USA



  

  




Hi,


Welcome to our first League of Nations Situation Report. We reveal today that China’s “quiet rise” is no longer silent. The West has slept whilst China has steadily but inexorably eroded its post-Cold War hyper-puissance. America’s period of hegemony is the shortest of any great power – outside of war – in history.

The alarm bells are ringing. See hereand here (£). But discussions about how to restrain China are limited by the realpolitik of those nations economically persuaded to turn a blind eye.


The question is whether America’s comparative power decline will accelerate if confronted by more assertive revisionist nations over the next decade. The problem is how to track it, understand it and deal with it. That’s what we’ll be doing. Not just regarding China of course, but for all top 10 leaders battling to keep their countries in the premiership league of global power.

THE RULES


  


Every century a crisis arises not only to control the state but to change it and the way the world is run.


This is where we are today. There was the Spanish century, the French century, the British century, the American century, now we face the Chinese century.

All were epic struggles and all needed a once-in-a-century bloodbath to separate the winners from the losers. Spain by France. France by Britain. Germany by Britain, America and Russia. Russia by America.

Every century, these epochal wars – driven by a dominant state pursuing its strategic objective – forces other states to innovate—strategically and constitutionally. Successful innovations by a single state are copied by other, competing states. These wars all changed the way states were run and people represented.


  


Why? Because the great peace settlements of these wars then shaped the constitutional order of the society of states. They sorted out the winners and losers of epochal wars, and thus sealed a new constitutional order. And since 1500 seven new constitutional orders were forged in the strategic, technological and constitutional consequences of the battle to survive: princely states, kingly states, territorial states, state-nations, nation states, market states and above all, the civilisation state.


All of these countries seized their moment and changed the world. How did they do it?


They supercharged their country’s power.

In fact, a country has two powers: Hard power is the stick, the mix of cash and threats to get your way. Soft power is the carrot, getting your way through persuasion without force.


Combined, these are called smart power which, if a leader is - in fact - smart, enables a grand strategy solution for a country to succeed by understanding past successes, present dangers and future options.
And the rise and fall of nations can be calculated on how well or badly they use the smart power to get what they want and empower their citizens.
But how do they use smart power? The Power Index devised a system to find out: Seven power apps, weighted by power importance and calculated by 13 index components which themselves are weighted to reflect policy importance.



Power applications

Weighted share %

Index components

Economic power

40

  • Size of GDP according to PPP (80%)

  • Country bond rating (10%)

  • Number of richest citizens (10%)

Military power

20

  • Military expenditure (50%)

  • Arms production and sales (30%)

  • The number of uniformed officers (10%)

  • Military expenditure as a percentage of the GDP (5%)

  • Possession of nuclear weapons (5%)

State power

10

  • Country’s surface area (100%)

People power

10

  • Population (90%)

  • Demographic burden of people 65+ (10%)

Cultural power

10

  • Number of universities on the Shanghai list (50%)
    Number of trademarks filed with the WIPO (World Intellectual Property Organization) (50%)

Energy power

5

  • Energy import / export (50%)

  • Income from extraction of raw materials in relation to GDP (50%)

Diplomatic power

5

  • Membership in the UN Security Council (60%)

  • Membership in the most important international organisations (20%)

  • Leadership positions in international organisations (20%)

This is our base. From today we’re going to revolutionise this approach using our new application, the Power Index. Instead of one report, once a year, we’ll use big data – actual and social – so you can see how countries are doing daily - like football teams or share prices. Not just in 13 policy areas but in 32 weekly league tables built by aggregating empirical data from some 3500 data sources on specific topics produced by up to 100 global sources.

From this, all these leagues' countries get ranking points from their positions, from how people are thinking they're playing. All these are then fed up into the League of Nations.


THE FACTS

China’s quiet rise is obvious to see in massive increases in its economic, cultural/educational and energy power.

Let’s recap how the last thirty years have gone.


  • In 1991 China was 2-5 down in the powerapps, scoring only in its core strengths: the size of both its territory and population.
  • In 2005, China overtook the US in the Energy League. 4-3.
  • In 2018, China had overtaken the US in the Culture League and was beating the US 5-2.
  • Today, we can reveal, China has all but overtaken the USA in the Diplomatic League, meaning the US is hanging on only to its military pre-dominance. 6-1 to China.  


Taking each relevant power app in turn:


Economic power: CHINA HAS RISEN

Between 1991 and 2018, China made the biggest gains in terms of its capital—its economic indicator rose by a massive 12.8 points. It is already the largest economy in the world according to purchasing power parity. Between 2018 and 2020, China’s economic power grew by 18.7% compared to the US’s more modest 4.56%.

Power result: 1-0 to China. The United States has already lost the economic top slot and continues to lose out on policy components to China’s economic growth, ratings strength and vast increase in private wealth.

Military power: AMERICA UNBEATABLE?
In the military sphere (military spending, weapon production, size of the army, etc.) it is the US that comes out on top. Its 2018 result of 31.03 points is more than four times the number of points scores by China—8.21 points. But, in the 2 years since, whilst US military growth posts a 10.69% power increase, China has increased its military potential by a staggering 32%.

Power result: 1-1. The United States maintains its military might but China is rising fast.


Energy power: CHINA WON’T SUFFER
In 2018 China produced the most energy and, at the same time, also meet these needs by itself—the country had 9.69 points in the Energy League. The US was second (7.60 points). Since then the gap has grown. China is up 13% (to 10.22 points) whilst the US rises only 2.97% to 7.69 points. China’s 2005 sorpasso of the US in energy production and trading means that today the US is 25% behind China’s lead.
Power result: 2-1 to China. The US has lost out to the energy powerhouse that is China.

People power: CHINA IS DYING
In terms of the potential generated by the population and its demographics, the most powerful countries in the world in 2018 were China (17.2 points) and India (16.2 points). The USA was on 4.0 points.

Since then, China’s inherent population growth has disguised the fact that between 1991 and 2018 it was the country that aged the most. Overall, China was up 1% and the USA down 1%. One of the most fascinating leagues to watch over the next 10 years will be this one. Despite its massive population, demographic change might weaken China.

Power result: 3-1 to China.

Diplomatic power: XI IS A MAN WITH A PLAN
Diplomatic power rewards countries that have a strong representation from major international structures. China has focussed on getting its people into positions of power in international institutions, increasing its diplomatic footprint and exercising smart power in confrontations with the West.


China has now surpassed the United states diplomatically.

In 2016 the diplomatic think tank, the Lowy Institute ranking the top diplomatic nations:

  


The USA had a total of 271 diplomatic posts compared to China’s 263. Two years later China has 276 compared to the US’s 273:


  


Power result: 4-1 to China as the United States loses its diplomatic power to a China increasing its global soft power.


Cultural power: CHINA BRAIN GAIN CONTINUES THREATENING THE US
The most culturally influential country in 2018 was the United States (21.4), with China is on its heels (20.7).
The most important policies in this area are the quality of the educational system and the number of applications a nations has made for intellectual property rights. On education we look at the number of schools a country has on the Shanghai list, which groups the world’s best universities.

The highest number of the best schools in 2018 was the US—137 (in the previous year they had 146 out of top 500 in the world). China is second with 54 universities (the previous year there had 44). As of last year, the US had powered ahead to 206 with China more than doubling its international-quality tertiary sector to 144.

In all, because China is powering ahead educationally and in IP registration, the last two years saw the US decline in the Culture League by 9% and China rise by 24%.

Power result: 5-1 to China.

Conclusion

Land power tips the power balance to China. 6-1 representing a massive power change over the last 30 years. In terms of economic and energy hard power, the US has so far been bested by China. In cultural and diplomatic soft power, China has closed the gap and, in 2018 and 2019 respectively, overtaken the US. Only in military terms does the US remain hegemonic. 


The American century is over. 







Notes:

Data foundation thanks to: www.statepowerindex.com. All other data is compiled from the following sources: Bloomberg, WEF, Forbes, OECD, UN, Eurostat, World Bank, WHO, Pew Research, Sipri, CIA, Global Firepower, PWC, Energy Yearbook, WIPO