Can China accelerate its ascent to the top global superpower?

If America crumbles and the market collapses, China may have the match they needed to ignite the flame on becoming the leading global superpower.

From a historical perspective, America might be losing its grip as the world leading power.

Same thing happened to Great Britain before the wars. Same thing happened to the Dutch before them.

Civilizations that have led the world always fall. The fall is usually never pretty, but there’s always an incumbent that rises above. Right now that country is China.

They’re accelerating 5G adoption faster than anywhere in the world. Eric Schmidt, the former CEO of Google, said China is 10x ahead of the US. America was supposed to lead that.

China’s built the world’s infrastructure. Go to Africa, Asia or Latin America and see who’s been building the infrastructure there. I remember a trip we had to Kenya in 2012 and seeing numerous Chinese companies set up to build roads there. We spoke with our driver as well who said China has gone in to build a ton of roads and bridges.

That was 8 years ago. Imagine the acceleration that’s happened now.

This is why the South China Sea is so important because if China could control all ground shipping routes through Africa, Asia and Latin America and the sea, they could bypass the US. The world no longer needs the US to facilitate it’s trading. Great Vox video about it here (silk road)

It’s like a game of risk. China is trying to take over everything.

They’ve been set up by a government who knows exactly what it’s doing, and that’s the scary part. Look at the China 2025/2049 plan. They’re so oriented on the future that they’ve invested so heavily in building capacity.

They’ve taken hundreds of millions of people out of poverty. They’ve built 500 mega cities in the last few decades (https://www.youtube.com/watch?v=2DH4v6FnbvM), have 45000 miles of high-speed rail when the US has zero. They’ve invested heavily in manufacturing.

Over the last 10-20 years, a lot of the things we buy every day and use in our house are made in China. That production capacity is unlike anything else around the world. Chinese companies are set up to feed directly into the government. It’s not a free market. There is no separation between church and state. Chinese companies have to give all their information to the government, and that creates conflicts of interest.

Look at Jack Ma. Who knows what happened to him, but I’m sure it spooked a lot of Chinese entrepreneurs. Kind of like ‘If you don’t stay in line, you’ll know about it.’ Same thing happens in Russia.

Only China has more people and the infrastructure to take over the world. They’re domestic economy is already large enough that they don’t need to sustain themselves with overseas exports.

They’ve also not raised any debt in the last several years, compared to the $4 trillion the US government has printed just in the last year. That’s a massive advantage. I think countries overall may not trust the integrity of the Chinese dollar, especially if it’s digital, because of the security and privacy concerns.

This is an interesting thought experiment – what’s the next world reserve currency? It was the pound, then the gold standard then the US dollar. It’s not the Euro because of the political instability. It’s not going to continue to be the US dollar if they keep printing money and don’t pay off their debt.

Is it going to be bitcoin? Nah, too unregulated and China has already eliminated it. Countries will never give up control of their currencies. This is where citizens may choose to adopt it instead, but if a country bans the use in their own country, it’s very difficult to continue to use it. Privacy issues, security issues, and governments won’t give up control.

So are we going back to the gold standard? Maybe. I don’t know but it’s interesting to think about.

I just think this world over the next decade is going to be so different. The acceleration of technology is exponential. The opportunity the Internet is opening up is crazy to think about. The amount of ideas and information and companies that people can create with access to a smartphone and good Wifi connection is incredible. Elon’s helping build that with Starlink. The genomic revolution is just beginning. Same with the battery revolution. I hope the nuclear revolution picks up steam in the next decade because we need innovation in that space if we’re going to go to completely clean energy.

But the next few years could be rough. Financial markets will correct at some point. Newton’s third law: each force has an equal and opposite reaction force. It’s been very good for the last decade, especially for rich people, but we may be at a breaking point if wealth doesn’t get redistributed properly.

Especially in America. Ray Dalio keeps talking about how he sees the US economy and place in history, and it’s towards the end of a cycle. All great superpowers go through it. Chinese, Dutch, French, English.

Now it might be America’s decline and China getting ready to take its seat at the throne.

China as the world leader is an interesting world to think about. How will they enforce their power? What’s the world going to do when they know what’s happening with the Uighurs? Are they going to work with the UN and be honest about certain things, like helping investigators understand the origins of the virus?

I don’t know.

It’s clear none of this will make sense now. But in a decade from now, we can revisit this and see how different the world may be. I propose America will not be at the front.

Unless they invest heavily in climate technologies. Like they did with science and the NIH funding, they need to invest heavily in climate science and climate technologies to switch to cleaner tech sooner. This could create numerous jobs, help stimulate infrastructure jobs and spending and could shift the world to cleaner technology. Is this administration prepared to do that? I hope so.

But if you consider America’s place in world history, all world superpowers eventually fall.

It’s the nature of history.

Is China the next one up?

Yup.