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Will China’s Economic Rise Mean America’s Fall?

The world of the early 21st century is far less zero-sum than the world of the early 20th.

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BY Quora - 11 Jan 2018

Will China's Economic Rise Mean America's Fall?

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Is China's rise America's fall? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Glenn Luk, works in investing in the U.S. and China, on Quora:

I subscribe to the belief that the world of the early 21st century is far less zero-sum than the world of the early 20th. A century ago, economic output and wealth were defined far more by the ownership and acquisition of natural resources and physical output and this is often a winner-take-all proposition.

A barrel of oil can only be burned once; two can't own the same piece of fertile farmland. When push came to shove these things usually ended up in the hands of the guy with the most guns. As a result, it was a far more brutal place and time, especially for the losers.

Today, wealth and economic output are created primarily by unleashing human productivity and creativity as well as the continuous process of re-organizing an economy and allocating resources more efficiently. Much of the hard/boring work can be outsourced to machines and software. Wealthy economies generate the vast majority of GDP from services which means that the better society gets along, the better it works.

In this game, the winners tend to be the ones that take a collaborative and partnership vs. adversarial approach. And because much of this type of wealth can be created or copied on a de-centralized basis, the gains are spread more equitably and even the relative losers are much better off in absolute terms.

We live in a far less zero-sum world today and that is good news for everyone.

This does not mean that countries and economies will avoid all conflict, or that natural resources do not matter anymore, but it certainly helps mitigate the more extreme elements of humanity's natural Machiavellian tendencies.

That is why I do not think the rise of China necessarily equates to the fall of America. Both can co-exist and prosper together -- and if so, the world as a whole will be much better off.

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