Special Fourth of July Editorial. 🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸
Amidst ever-increasing Sino-American geopolitical tensions, one often wonders which superpower will emerge victorious. Over recent decades, experts have neglected to acknowledge America’s strengths as a global hegemon, preferring to marvel at China’s economic miracle. However, with China now on the back foot after a drastic response to the pandemic, many analysts have now questioned whether it will even overtake the stars and stripes, and this article serves as a reminder that America is not yet down for the count.
Uncle Sam’s first advantage is his large working age population; although the rise of automation is imminent, human labour will still be critical for all industries for the foreseeable future. China’s one-child policy has stunted population growth by creating not only a small pool of prospective parents, but also a skewed sex ratio (there are 105.3 men for every 100 women) and a culture that having one child is desirable, whereas the US has had no such policy. Moreover, America has more than 40 million immigrants, in stark contrast to the fact that 0.07% of the Chinese population is foreign-born (making it the least diverse country in the world). The stars and stripes could attribute this success to a low tax rate and a generous family immigration system, but its culture is the defining factor for this. The predominance of English and its heterogeneity makes it easy for foreigners to integrate into the US, with China being the polar opposite of this.
In addition, America is one of the most attractive destinations for foreign investment. This is in part due to its low tax rate at 21% (which is sometimes lower under Republican presidents), compared to China’s rate of 25%. The US also has a more predictable and transparent legal system, particularly after the pandemic, during which Xi Jinping implemented unclear data protection laws which has often led to intimidation of foreign businesses within China, such as Mintz Group, Capvision and even Bain. America’s stellar education system also gives rise to a talented pool of workers; 18 of the top 50 universities are in the US, compared to 5 in China. Lastly, Xi has begun to shift the burden of economic growth, albeit slowly, onto state owned enterprises, which have been plagued with poor management and high debt levels, whereas the US relies on a nimble and dynamic private sector that has proved to be much more efficient.
The US’ final advantage is a large natural gas supply, possessing plentiful reserves such as the Permian basin, in contrast to China’s heavy dependence on other countries for foreign oil. This leaves the US largely unscathed from price shocks, which have become especially common as OPEC seeks to maximise profit and limit its daily supply of crude barrels, and Russia faces restrictions on its oil exports, both of which are major suppliers to China. And although China seems to be slightly ahead of America in the race to become renewable (15% and 12% of their energy respectively are from zero-emission non-nuclear sources), China’s prolific use of coal and oil will entail greater emissions in the short-term than America’s employment of the cleaner natural gas. Therefore, the former will need to compensate for this either through a faster energy transition or the use of expensive carbon capture and storage technology.
Advocates of democracy worldwide should rejoice at this news – while the panda may be growing at an alarming rate for some, the bald eagle is still flying high.
Written by Sean Tan
