Now that President Xi Jinping of China has told his American counterpart, Donald Trump, that the US is a declining power, how long will it take America to become a ‘been there, done that’ country? Long, very long I think.
It took the British empire over 70 years and the Soviet empire just five. The French took around 20 years. Much earlier the Spaniards took around 200 years. Yes. 200. But it wasn’t really an empire.
But empires don’t collapse because one, or some, of their leaders make utter fools of themselves. They collapse because they run out of money. That’s all. There are no exceptions to this truth.
So what needs asking is who will run out of money first: the US plus EU or China? The answer is that when a car runs out of petrol, it stops. Likewise, if they run out of money, so will China. America is the patron, the West is the client.
The Chinese economy is a derivative of the America-EU one, an utterly mismanaged one that depends on its rival making mistakes, like Trump has been doing.
But he will go and his successor will start fixing these mistakes. That isn’t that hard to do. And it will work because the problem is not America. It’s Donald Trump. His biggest shortcoming is that he can’t be trusted.
But can China be trusted? I just read some data that says China hasn’t delivered on 75 per cent of the promises it had made to other countries since 1950. Yes, 1950.
A temporary situation
So that’s where we stand now. China thinks it has become numero uno. But America is just waiting impatiently for a new president.
By the way, my interest in China goes back to 1973 when my brother was posted there in the Indian embassy. Basically, it seems clear that Chinese society is a very suspicious one. Everyone suspects everyone else. It’s hard to say why.
Coming back to US-China competition, the economics of American dominance is far superior to China’s portrayal of it, especially by its admirers. It’s simply not true that China will quickly supplant the US. Not a chance except in some places that the US no longer needs.
The reason is that until Trump came along, the world trusted America but now it’s hesitating and Chinese loudspeakers are amplifying that hesitation. But, rest assured, once a new president takes office, the world will once again turn to America. There’s not a hope in hell that in the interim China will become trustworthy and the world will embrace it.
The Chinese problem is cultural. In China trust is not extended to people you don’t know because the formal instruments of trust like contracts and agreements don’t matter as much as personal relationships and the resulting networks. In this regard China is still primitive.
This may well be the preferred Chinese way of doing things but at the international level it has made countries very wary of China. And that’s what makes it hard to displace the US for many years still.
The trust thing
Even today, when Trump is rampaging, if you asked the prime minister of a country who he or she would trust, only a few would say China. It has a long, long way to go before countries start trusting it.
This is because for the Chinese, and especially the Communist party of China, the power to coerce is more important than cooperation. You only have to look at the history of it all. It’s replete with the zero-sum approach. The Chinese take no prisoners.
This is not to say that America doesn’t coerce. It does but, generally, until Trump came along, it tended to err on the side of generosity and cooperation. That liberal impulse, which was so strong, has been temporarily sidelined by Trump. It will return.
In the end, though, it boils down to the size of an economy. American GDP is $30 trillion. Chinese GDP is $20 trillion, smaller than the economy of the European Union which is $22 trillion. America plus Europe are two-and-a-half times the size of the Chinese economy. Indeed, the Chinese economy is probably much smaller than it would have the world believe just as, because of counting errors, India’s is much bigger than the world thinks, maybe $6 trillion. We leave out 60 per cent of economic activity and the Chinese double count a lot.
Before getting down to write this article I also looked at the data about the Soviet economy in the 1980s. There, too, the assessments were fantastic. But in 1991 the USSR collapsed. This is worth bearing in mind while discussing Chinese strengths.
China, in order to become Number One lacks what it needs: goodwill towards others and towards it. It needs the world but behaves as if the rest of the world needs it. In a limited, industrial supply chains, way, perhaps this is true — but for the time being only.
Published on May 26, 2026