Coming Soon: A Post-American World
Aug. 17, 2008(CBS)
Millions of us have been swept up in the color and drama of
the Olympic Games. But the Beijing Stadium isn't the only
arena for global competition. Now, after decades of
dominance, will the U.S. soon be "passing the torch"?
Here's Martha Teichner: Consider the Olympic Games a giant
exclamation point … a fanfare announcing a message from the
They're putting the world on notice, that they are players
playing to win, and not just Olympic gold. They want you to
know that China is a power to be reckoned with, and proud
of it, that it's bearing down on the United States … fast.
"The implications are that China will be the commercial
leader of the world," Albert Keidel, an expert on China's
economy, told Teichner. "It will also deserve and demand
leadership in global institutions."
Keidel is the author of a startling new study for the
Carnegie Endowment for International Peace, "China's
Economic Rise: Fact And Fiction."
"We can model the economy and show that by 2035, it will be
as big, if not bigger than the United States' economy will
be at that time, and by the middle of the century it will
be twice the size of the U.S. economy at that time," Keidel
"That's staggering," Teichner said.
"That's conservative," Keidel said.
In cased you missed that - within the next 50 years China's
economy will double the size of the United States' economy.
So where will that leave the United States? Are we
slipping? Are we reaching some inevitable tipping point
that will change the world as we know it? Is the golden age
of America coming to an end?
Fareed Zakaria, editor of Newsweek International, said,
"What's happening right now is, the world is moving beyond
America. The future is, in many ways, being shaped in
distant places by foreign people."
Zakaria is author of "The Post-American World," which is a
"That's a big shift from a world in which America was at
the center economically, financially, culturally,
militarily, politically, to a world in which there are more
centers and many forces, from India to China to Brazil to
South Africa that have to be taken into account," Zakaria
The meltdown in the U.S. economy at the moment isn't
helping: The price of gas, the mortgage crisis, the weak
dollar, the cost (both monetary and political) of the wars
in Iraq and Afghanistan. But the shift, according to
Zakaria, is more fundamental.
"This is not happening because America is failing or
declining," Zakaria said. "It's happening because the rest
are rising, and it's happening because the natives have
gotten good at capitalism."
And it's happening right under our noses. America's
beverage, Budweiser beer, is now owned by Belgians.
The government of Abu Dhabi last month bought a 90% stake
in New York City's iconic Chrysler Building.
And isn't the United States supposed to be the place with
the biggest and best of everything?
The tallest building in the world isn't in New York or
Chicago anymore. It's in Taipei.
The Mall of America in Bloomington, Minnesota, once the
world's largest, isn't even in the top ten now. The biggest
one's in - surprise, surprise - China.
Alan Wolff, an international trade lawyer and former U.S.
trade negotiator who specializes in china, said we're not
used to foreign competition.
Coming out of World War II, we had a lot of breathing
space; the rest of the world's economies were devastated,
"but they're catching up," Wolff said.
"Worldwide, 179 countries are growing faster than we are.
As our manufacturing jobs have moved offshore, the United
States has counted on innovation to keep its edge, but how
much longer will that be possible?"
Take the iPhone. The idea, the genius, was American. But
the phones themselves are made in China, where the
government is determined that the next generation of
geniuses will be Chinese.
"Actually, that's a stated national policy," Wolff said.
"They have a medium- and long-term science and technology
policy, 2006-2020, and in that policy one of the
statements, one of the parts is to establish global brands,
with indigenous technology, with Chinese technology behind
Think Japanese cars. When they arrived here in a big way in
the 1970s, Detroit didn't see what was coming. Today
Toyota, not GM, is the number one-selling car company in
the U.S. And find an American community that wouldn't like
a Toyota plant putting people to work.
China wants to be next.
Michael Jemal is president and CEO of Haier America, told
Teicher that innovation and having its own patents is the
"life blood" for Haier. "Haier applies for two patents
every single day, every day of the year. In fact, it's more
Never heard of Haier America? Just wait. Right now,
Chinese-owned Haier is trying to buy GE's appliance
When it entered the U.S. market nine years ago, the company
sold three products. Now it sells 3,000. You name it, Haier
makes it, everything from little dorm refrigerators to air
conditioners, washing machines to flat screen TVs.
"Haier is the number one brand in China," Jemal said. "In
asia, we're in the top ten. The objective here in the U.S.
is also to build a market share, to be in the top three in
Haier is a pioneer, the first big Chinese manufacturer to
build a plant in the United States, a $40 million dollar
refrigerator factory outside Camden, South Carolina.
There the Chinese flag hangs alongside the Stars and
"This is an American plant," said Joe Sexton, president of
Haier America Refrigerators. "It's run by Americans, and it
is staffed by Americans. It is owned by the Chinese."
They employ 125 hourly employees, and 30 salaried employees
at Camden. Half these people used to work in the textile
industry. They lost their old jobs to lower-paid workers in
Asia. In other words, this is globalization in reverse.
South Carolina Governor Mark Sanford said, "We've been, I
mean, really whacked in textile job loss. We lost about
95,000 direct textile jobs in that process."
Sanford said that thanks to foreign investment, the state
has made up those losses and then some. The 600-plus
foreign companies operating in South Carolina account for 1
out of 5 manufacturing jobs. They employ nearly two hundred
"Capital goes to where it's loved, and we try to be very
inviting on that front, and not just in terms of tax policy
and regulatory policy and other things, but also in terms
of direct relationship," Sanford said.
"That's happening at the local level in the United States,"
Wolff said, "but the federal government is oblivious to
Wolff said the president and Congress must face the new
reality of global competition.
"We need to change our tax policies, change our immigration
policy. We made the U.S. a magnet, an attractive place for
the best and the brightest in the world, and we frustrate
that by saying, 'You get a Ph.D. here and that doesn't
matter. Right now, we're throwing you out.' That's very
"We save too little, we consume too much, we borrow too
much from the rest of the world, we use energy in a
profligate and wasteful fashion," said Zakaria. He says the
U.S. must change its ways, and soon, if we want to hang on
to the wealth and influence we have.
"I think that our window for policy change is very short,"
he said. "I think if we don't, in the next few years, four,
five years, make the necessary adjustments, what you'll see
is something that looks a little like the trajectory of the
British empire in the 20th century. It's not that Britain
collapsed, it's that it just slowly faded away in
significance, in power and wealth."
Halfway through the Olympics, the enormity of China's
ambition is a wonder for all to see - and for Americans, a
sobering wake-up call.
"At one level a post-American world is a sign of American
failure, and at another it's a sign of glorious success,"
said Zakaria. "Why is this happening? Because countries
around the world are doing what we've been telling them to
do for the last 60 years: open yourself up to capitalism,
to free trade, to technology."
But Zakaria worries that one day historians will write
about how the United States globalized the world, but
forgot to globalize itself.