This week, Chinese President Xi Jinping returns to Europe after five years of absence. There have been several interpretations about his trip, but this gives us the occasion to step back and make a broader assessment about China and its position in the world. In fact, in the last few years, the rise of China has been a dominant theme in geopolitical and macroeconomic debates. According to the calculations by Angus Maddison, since the 1990s China has been returning towards its historical average of generating 25-30% of global GDP. Already in 2014, China became the largest economy in the world (albeit not the “richest” in terms of per capita GDP), surpassing the US in PPP terms.
Economic dominance has always been associated with geopolitical influence, and for this reason, there is an ongoing “Cold War” between the incumbent power, the US, and the rising challenger, China. Harvard scholar Graham Allison has wondered whether the US and China will fall into a “Thucydides Trap,” i.e. whether they are “destined for war” and will eventually have to clash militarily, as has occurred in 12 out of the 16 historical cases of rising powers analysed by Allison.
This succession of countries taking the leadership of the world is not new. German philosopher Georg Wilhelm Friedrich Hegel, in the 19th century, said that dominant countries, from a “civilisational” standpoint, passed one another what he called the “Weltgeist,” or “world spirit.” In effect, almost 5000 years ago, the Chinese civilisation was the most developed in the world, from a technical and political organisation standpoint. The Weltgeist then moved to the Middle East, with the Mesopotamian civilisations, and then to the Egyptians. The Greeks and the Romans followed, in ancient history.
In more modern history, the UK took over France and the Netherland’s leadership in the 17th century, and kept it until the dawn of the 20thcentury, when the US had to intervene twice in the European affairs to save the continent from German domination. Around 100 years later, a new country seems ready to take the helm again, and this would mark the return of the Weltgeist to the far East. There is a peculiarity in this passage that we want to explore in this column.
First, the US is certainly in the declining phase of its leadership. In functions, the first derivative indicates the direction (“growth” vs “decline”) while the second derivative indicates the speed (“acceleration” vs “deceleration”). As we discussed in a previous column, if Trump were to win, this would mark in our opinion the end of the US liberal-democracy, and therefore an acceleration in the declining process. Generally speaking, rising powers take over old powers with both first and second positive derivative, indicating the fact that they are in the accelerating phase of their ascent.
From a demographic as well as socio-political perspective China is already in a decelerating phase of its own ascent. The decision by Xi to change the Constitution to remain in power for life marks an involution, rather than an evolution of the political system, and the beginning a negative second derivative of “China’s rise” function. It is very peculiar for a declining power to give up leadership to a country that is close to peaking in terms of economic and social organisation. This could make China the leader of its “portion” of the world, rather than a global hegemon.
This leads us to the second point. A world in which there may be a series of regional, rather than global, hegemons, is not – as some optimistically point out – poly-centric, but rather is chaotic. In the history of humanity, the passages of the Weltgeist from one hegemon to the next have caused wars and instability. In a multi-polar world, the chances for conflict may increase exponentially.
