From 1800 until Now
To bring you up to date to where we are now, I want to superficially look at the post-1800 period until the
beginning of the People’s Republic of China in 1949, then look at the Mao period until 1976 a bit more closely,
then look at the period of Deng Xiaoping (from 1978 to 1997) and his successors up to Xi Jinping (in 2012) more
carefully, and then look at the period of Xi Jinping up until now. Then we will look at US-China relations more
closely. We will do all that in about 20 pages.
To begin, I will draw your attention to the eight measures of power that I showed you before for other
countries and for China since 1800. It is shown in the chart below. Notably, unlike the cycles for the Dutch,
the British, and the American empires that we looked at before, which went from their rises through or into
their declines, the cycle that we are examining for China goes from its decline at first into rising most
recently. While in a different order, as you will see, the same forces were behind China’s decline and rise as
were behind the other empires declines and rises.
The Decline from 1800 until 1949
As conveyed, the low point in these eight measures of power—i.e., education, innovation and technology,
competitiveness, military, trade, output, financial center, and reserve currency status—was in the 1940-50
period. Since then most powers—most notably economic competitiveness, education, and military—
improved gradually12 until around 1980 when China’s economic competitiveness and trade took off. Since
then until around 2008 growth was very strong with debt growth being in line with economic growth. Then
the 2008 financial crisis came along and China, like the rest of the world, used a lot of debt growth to
stimulate its economy so debts rose relative to incomes, Xi Jinping came to power, improved China’s debt
management, continued innovation and technology, more boldly expanded globally, and encountered
greater conflict with the US. As shown in this chart China is now a leading power in trade, military, and
innovation and technology, and its relative powers in these areas are increasing quickly. While China is still
highly competitive economically in world markets, its rate of improvement in this area is slowing. At the
same time China remains a lagging power in its reserve currency and its financial center.
While these indices are broadly indicative, they aren’t precise because each of these powers can’t be precisely
measured. For example, as far as the power of its education system is concerned, while our index rises at a fairly
brisk pace it fails to fully capture the relative improvements in China because this measure is made up of average
levels of education as well as total levels of education. This is best conveyed in the table below, which shows some
of the most important stats in this index. As shown, while the average education level in China is considerably
below the average education level in the US, the total number of highly educated people is significantly higher in
China than the United States. For example, the total number of college graduates in science, technology,
engineering, and math is about three times that in the United States (see table below). At the same time there are
reasons to believe that the average quality level of education isn’t as high, especially at the college level. For
example, there is only one Chinese university—Tsinghua University, which is No. 36—that appears in the top 50
universities in the world, while 29 American universities do.13 This picture in which the average of something in
China is below the average of the same thing in the United States but the total in China is greater than the total in