Will China replace the US as the new superpower?
China’s Socialist Empire has grown tremendously stronger since 1949, and many wonder if this mighty economic giant will overtake the United States in the near future.
China’s economy boom is starting, consider that China ranks number three in power on the world stage next to Russia, which includes number one ranking GDP, which has overtaken the United States and its transparency and influences are increasing, therefore, it is impossible not to be aware of its presence. In addition, the yuan has become the third reserve currency next to the US dollar and the euro.
The Chinese yuan is a strong competitor against the US dollar as they want to impose more control over their economy, there is a push to make sure their money system is accepted globally. This push may be to consolidate itself as the best replacement for the US dollar as the universal currency. The recent news that Venezuela is now selling oil for yuan instead of US dollars doesn’t sound so good, plus rogue countries suffering from a Western-imposed sanction are using the yuan as a tool to survive. Also, the number of countries with close ties to China have been conducting their trade and investment under the radar with the Yuan, they are Russia, Germany, Sweden, Malaysia, Australia, Indonesia and Canada.
Today, China’s 1.3 billion citizens experience a better standard of living, and many have achieved outstanding status, recognition and power. Their strong growth has increased the number of self-made high net worth individuals and they have surpassed the United States with the most billionaires at 637 to the United States with 342. Their diplomatic public relations skills being used seem to have had a great impact with other countries far and wide, which has made it one of the most favorable countries today.
Meanwhile, the United States appears to resemble a shadow of its former self, even though it still wields external economic and military power, yet its influence and respect seem to have warmed and its image has suffered a sharp decline among its allies, in addition of their favorites are at their lowest point in countries like Africa, Asia, Europe, Latin America and North America. The American Dream seems to be fading due to the downturn in the economy, and its prospects are becoming difficult for today’s youth to access a better standard of living than their parents of yesteryear, according to an article published in Eureka Alert, by the American Association for the Advancement of Science. Meanwhile the Pew Research Centerthey affirm that there are few adults in the middle and high income bracket, but there are more occupying the lower class.
Today, international investors are increasingly concerned about where they place their investments.
They note that Washington has not yet approved a budget, nor has it implemented credible actions to pay its creditors’ bills. Which is seen as an insecure paradise for investment and that is not good. Lately, the United States has been playing financial sleight of hand by moving money around to make sure they don’t run out of cash. They have borrowed approximately $19.8 trillion, of which a third of this amount is owed to themselves, $6 trillion from major foreign holders of Treasury securities, which include foreign countries, companies and individuals, $1.1 trillion is they owe to China and the same amount to Japan plus all other US citizens and businesses including state and local government. It is still surprising to see that the international credit rating agencies, Moody’s and Fitch, gave the United States a credit rating of three “A’s”, while S&P gave a credit rating of AA+.
Moody’s, the International Credit Rating Agency, has downgraded China’s credit rating to A1 for the first time in three decades, this is considered a setback and this action has angered them, while S&P and Fitch rated China A+. China’s economy has boomed for the past 18 years but seems to be cooling down a bit but despite all this it is still considered a favorite place for investment the US includes most stable countries for 2018.
Recent news coming out of China indicates that during 2018, there will be a move to ensure a more sustainable and profound way is used to increase high-quality development that will enrich the global outlook, according to the Chinese president at a high-profile meeting. This move will be enforced to transform itself in a more intense way in order to bring more prosperity to both China and on board. This is the news investors love to hear.
Although the US has the largest national wealth term and China has the largest GDP, both share a relationship as an economic partner and potential adversary. There have been periods of open conflict between the two nations, but the relationship has remained stable.