Former Fed chairman Paul Volcker recently indicated that China’s rise highlights the relative decline of the United States:
I don’t know how we accommodate ourselves to it. You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do.
He did temper his remarks that the decline wasn’t absolute:
I would like to think that given the history of the past, given the strength, actual and potential of the American economy, we can still provide a kind of indispensable element of leadership here, but it's not going to be dictatorial, I'll tell you that.
As an indication of how far China has come, it is instructive to see that a decade ago, China was a prime destination of choice for westerners looking to adopt female children. Today, it is far more difficult for foreigners to adopt from China and Beijing is actually welcoming former adoptees.
As a resource short nation, China has moved to a policy of securing its resource base – as I have posted on before. This analysis is confirmed by a comment at Gregor, who has a more insightful viewpoint on the geopolitical implications of the major oil-actors on the world stage.
No clear sailing ahead
While China is ascendant today, not all is rosy. It is still important to remember that the country faces important headwinds and limits to growth.