My Take

China, and others out to supplant US, must be careful what they wish for

PUBLISHED : Friday, 18 October, 2013, 3:09am
UPDATED : Friday, 18 October, 2013, 3:09am

Nations, like people, should be careful what they wish for. In a scathing commentary, the state news agency Xinhua has called for an end to US hegemony, or what it called a "de-Americanised" world.

I confess I get tired of watching HBO all the time on pay-TV. Wouldn't it be nice if we could easily access movies and music made in Europe, Africa and Latin America, Down Under and up in Scandinavia? Wouldn't we be much better informed about the world if we could always watch news from other countries, not just CNN, CNBC and Bloomberg?

But I presume that wasn't what Xinhua was getting at. Rather, the rant was against the US-dominated global financial system and world order. Yes, it's unfair; and it dates back to the post-war Bretton Woods system of fixed exchange rates, with the values of currencies all set against the US dollar, which alone was fixed to gold. There is even a term for the American benefits - "exorbitant privilege".

The post-Bretton Woods world still favoured the US disproportionately, after Richard Nixon killed the gold link and forced the world into floating its currencies. We are living with Bretton Woods' institutional legacies, such as the World Bank and the International Monetary Fund, always headed respectively by an American and a European.

However, this US-led global financial architecture has also underpinned an unprecedented period of peace and prosperity, first in Japan and western Europe, then in the Asian tiger economies and eastern Europe; more recently, we have seen the rise of China. It is doubtful China's economy would have risen so spectacularly without the globalised trade under international regimes sanctioned by the US, or the symbiotic relationship between the two countries' economies.

But we may already be drifting into a post-American world, which has variously been called "the rise of the rest" and the G-zero world. It may be that powerful emerging nations are having a greater say on the world stage. It may also be that the United States, which has always had an isolationist streak, is accepting its relative decline, as witnessed by its reluctance to intervene in Syria's civil war.

There is no guarantee a multi-polar world will be safer and more prosperous than one led by the US.