Critics point to the hazards inherent in racking up some $10 trillion in public debt—exacerbated now by fresh doubts over American solvency. Says historian Kennedy, "The crisis will confirm in the minds of Asians not to be so fiscally dependent on Uncle Sam." Those foreign investors, suggests Chas. W. Freeman Jr., a former U.S. diplomat in China and Saudi Arabia and president of the Middle East Policy Council, will conclude, "We're not going to finance your improvidence indefinitely." One other vulnerability also looms larger than in the past: energy imports. When Jimmy Carter was urging energy conservation in 1980, the United States imported 37 percent of oil consumed; last year, it was 58 percent.
Something else is different about the current debate over U.S. decline. Without any contraction of its daunting military firepower or the size of its economy, other nations are bound to assume more influential positions. The world geo-political map is being redrawn: Several powers are rising, some rapidly. China takes top billing on the list. Back when economic reforms began in 1978, China contributed but 1 percent of the world's GDP and its trade. Last year, it reached 5 percent of world GDP and 8 percent of trade. China's growth has hummed along at nearly 10 percent annually—for three decades. That is three times the global average.
China's "peaceful rise," as officials call the strategy, aims to restore China to the status it had enjoyed for many centuries: the world's largest economy. A recent Goldman Sachs report has bumped up the time by which China's economy is expected to surpass America's in size to 2027. China's growth is fueling a rapid expansion of military capabilities and, in effect, promoting a model competing with that of the United States—authoritarian capitalism.
At the same time, India, the world's most populous democratic state, has also found a surer path to prosperity that is broadening its influence and enabling a military buildup. Along with the economic recovery of Japan and the growth of what used to be called the "tigers" of South Korea and Southeast Asia, predictions of a "Pacific century" or an Asian one look more plausible. Asia is returning to its historical norms, Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, argues in his book The New Asian Hemisphere. "The era of Western domination has run its course," he writes.
There are shifts elsewhere, too. The once slumbering giant of South America, Brazil, is overcoming its past weaknesses. Russia is undergoing a resurgence of uncertain duration, courtesy of massive sales of oil and natural gas. Its invasion of neighboring Georgia and support for separatist regions there may mark a new period of strategic challenges to the West. Meanwhile, the European Union, in fits and starts, continues to evolve into a more coherent force in global affairs that, as a 27-nation collective, already presents the world's largest economy.
Biggest loser. The world's energy suppliers—especially those along the Persian Gulf—are also gaining strength. Flynt Leverett, director of the New America Foundation's Geopolitics of Energy Initiative, calls the flood of money from oil consumers to producers "arguably the greatest transfer of wealth from one group of countries to another." The "big loser," he says, is the United States. The Gulf Arab states, as a group, may emerge as the world's most important investor. As well, Iran and its regional ambitions will get plenty of sustenance.