Tuesday, October 8, 2013

Contrast between superpowers growing



The world’s two largest economies, the United States and China, recently took different turns which probably indicate a global trend.

The United States shut down the federal government because of budget disagreements between the White House and Capitol Hill. President Barack Obama, a Democrat, is at ideological loggerheads with the House of Representatives, which is Republican controlled.

The Republicans insist on chopping Obamacare from the budget and Obama is not amused. They shut down many non-essential federal services, affecting nearly a million people and the economy.

The picture is very different in China. Several concerns which damage the American image arise out of developments in the United States. First, the shutdown is a sign of confused partisan politics feeding into frustrating a sagging economy that is barely recovering from the slump.

Since the public appears to blame the Republicans, the government closure might politically boomerang on the GOP. Although those few in the Tea Party may not be worried, many Republicans would like to shift the blame to Obama.

Second, American international engagements have been adversely affected as Obama was forced to cancel trips to Asian countries so as to deal with the budgetary crisis.

What is more, the claim by the head of national intelligence that national security is being damaged is worrying in these days of international terrorism, the latest being the one in Nairobi.

The United States has not handled recent international crises well. It seemingly raised the stakes in Syria only to perform poorly when the moment came.

It backpedalled, in the face of what appeared as domestic and global opposition. In the process, the Russians appeared to run away with the prize of settling the Syrian weapons problem and thus emerged as peace makers.

And in the wake of the Westgate mall attack, the United States issued a travel advisory against Kenya despite pleadings that doing so would play into the hands of the terrorists.

It appeared to be alone in this, as if it was bent on inflicting economic injuries on its pivotal ally in eastern Africa. It has not offered viable explanations for its actions.

As the US appears to be floundering, whether in domestic or international arena, its great rival appears to be thriving. China increasingly plays the role of global economic engine partly due to three advantages which few other countries appear to have.

First, it has a huge domestic market with a growing middle class that has developed taste for assortments of goods thereby creating demand for those goods. For this reason, China is magnetic to many investors trying to cash in.

Second, its investors are so aggressive that they out-compete other global investors in almost everything. As a result, its investments globally are on the rise in mining, oil exploration, and manufacturing.

While remaining officially a Communist country, at least in politics, its economics is capitalistically labelled socialism with Chinese characteristics.

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