The decline of China and India
China and India might be regarded as this century’s rising powers, but in one key arena – the globalisation of research and development (R&D) – their leverage vis-à-vis the United States is declining. As China and India strive to become 'technology powers', both governments have courted foreign firms to set up R&D centres on their soil, and U.S. firms are easily the biggest investors in this regard. For corporate America, however, these investments represent only a small fraction of global R&D spending. The result is 'asymmetric interdependence': China and India need the U.S. more than it needs them.
The USA lead has a lot to do with:-
The US dollar as a global trading currency and a belief in it as a store of value backed only by the intrinsic worth of the American vision.
The US state's support of a declining corporate America
The US massive military spending.
All the above is at the expense of USA citizens who implicitly bear the cost of it's actions together with many foreign bond holders who are prepared to support massive US debt - for now.
We may all be surprised as to how quickly Russia, India and China catch up if confidence in the USD vision wanes. It looks as if Russia and China will challenge that on their own but Europe might go along for the ride when their stress cannot be relieved by US monetary tricks any longer.
Eric Coote
7 years 1 week ago
