The Role Of China And The United States In The Global Economy Of The 21st Century

Abstract

The world is characterized by brutal global competition. When talking about competition during much of the 80s and 90s, we generally refer to the triage of Western European, Japanese, and U.S. firms. Today, we have to add firms from Brazil, Chile, China, and India to this elite bunch. This competition is good for the consumer -- prices of manufactured goods have been kept in check, and there is a general feeling of economic prosperity around the world. According to a recent article in The Economist global output has grown by over 4.3 % annually. The growing middle class in India and China has recorded the sharpest increase in the number of billionaires in the last decade; therefore the world has every reason to feel optimistically euphoric, even if China and India will reap a bigger share of the economic pie. In the words of Drucker, India and China are “…rapidly transforming their economies…they can now produce technologically sophisticated and financially rewarding offerings that are diminishing American standards.” (Drucker, 2004)  The concern with the advent of China has prompted more protectionist oriented legislation against China: textiles. The U.S. Congress also blocked a recent attempt by China’s China National Offshore Oil Corporation (CNOOC) to acquire Chevron. A recent Harris Poll indicated that 40% of the people surveyed believe that China will be stronger than the U.S. within a decade, and over 50% believe that China will have a negative effect on the U.S. economy.