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America is still number one

Frank Schiefelbein/EyeEm/Getty

All the talk of a “great shift” away from the US-led international order is overblown, says David Wallace-Wells in The New York Times. It’s hardly a “new Cold War” with Beijing, for example, when “the vast majority of our phones, most of what goes into our solar panels, and a critical share of antibiotics used by Americans” are produced in China. “De-globalisation” isn’t exactly rampant when international trade as a share of the global economy has, “at worst, only slightly declined” since the financial crisis. Is it really worth panicking about “de-dollarification” when 88% of foreign exchange trades involve the greenback?

Since the end of the Cold War, the US share of global GDP hasn’t fallen at all, while its share of the output of G7 countries has gone up by nearly half. Adjusted for purchasing power, incomes are higher in Mississippi, “America’s poorest state”, than they are in Emmanuel Macron’s France. British incomes are roughly on a par with those in Arkansas. Meanwhile, China’s population – long seen as its “engine of future global dominance” – has peaked, and its domestic economy has seen “once-unthinkable quarters of recession”. Abroad, Beijing’s spending and investment are down from a 2016 high of $75bn to $10bn before the pandemic, and China has written off loans worth $78bn in the past three years. This isn’t to say nothing is changing. But when pundits talk about the inexorable rise of China and America’s “great decline”, they have departed from the facts.