Modernity was born in the West. Ask educated Westerners today why it was their part of the world, rather than another continent, that wrote the rules of the modern age, and they will likely tell you of Europe’s scientific revolution and the Enlightenment – and possibly the Renaissance. That would be true, as far as it goes. But history is more complicated than the stories we learn in school. What most would be unlikely to know is the degree to which Chinese technology provided critical sparks to the Industrial Revolution. Among other techniques and inventions, Europe took far-superior iron and steel production; the printing press; navigational tools, including the compass; gunpowder; and paper money from China. From Islam, Europe took binary mathematics (originally from India), astronomy, double-entry bookkeeping and much of its own forgotten knowledge from classical Greece and Rome. ‘[Much] of the European revival was based on the ideas, institutions, and technologies borrowed from the advanced civilizations in the Middle and Far East,’ notes Richard Baldwin, whose book on today’s Great Convergence is rightly acclaimed. The shift of power from the Islamic world to the Christian in the late Middle Ages had, in turn, been enabled by the destructive westward sweep of Genghis Khan’s Mongol hordes in the thirteenth century. In addition to its more benign exports, Mongol China delivered the Black Death, which wiped out between a third and a half of Europe’s population within three years. Here, too, the impact was complex. As the more urban civilisation, the Islamic world was dealt an even worse fate by the bubonic plague, since its people were more concentrated and so more exposed than those in Europe. You could say that the Mongols sharply improved Europe’s terms of trade. Jeffrey Garten’s history of globalisation, From Silk to Silicon, tells the story of the last millennium through ten biographies. His book ends with Steve Jobs. It opens with Genghis Khan. The latter’s impact was a fitting one with which to begin his story.
‘If we take the long view,’ writes Hugh White, Australia’s leading Sinologist, ‘the rise of India and China today is less a revolution than a restoration – a return to normal after a two-century interlude.’
Economists are notorious for getting the future wrong (just as they are peerless at explaining the past). The joke is that they have predicted ten out of the last five recessions. In recent years, during what is now called the age of hyper-globalisation, bad forecasting has erred in the opposite direction. Economists have consistently predicted growth where none has materialised. In particular, since the 2008 global financial crisis, forecasts have annually over-estimated the next year’s growth. The quickest way to verify this is to leaf through each of the past eight years’ estimates of the Davos Forum’s Global Economic Outlook. But if you stand back, the longer trends are unmistakable. China may well have to grapple with its own recession in the coming years (I can safely forecast that Western journalists would then promptly declare the death of China’s miracle). Indeed, Beijing ought already to have engineered a recession given the country’s high levels of domestic debt. At some point it will need to liquidate its bad loans. But China’s politburo clearly dreads the domestic backlash a recession might trigger. It has thus opted for slower growth – preferring to let the air out of the balloon rather than pop it.
Whatever its short-term fortunes, China will continue to make big strides on the West in the coming decades. In terms of purchasing power parity – measured by what you can buy in the local currency – China’s economy surpassed the US in 2014. Within a decade, give or take a few years, China will overtake America on more conventional dollar measures. By 2050 – a century after its communist revolution – China’s economy is likely to be twice the size of America’s and larger than all the Western economies combined. A century of restoration will have followed the century of humiliation. And by then, India’s economy will be roughly the same size as America’s. Whether the Western way of life, and our liberal democratic systems, can survive this dramatic shift of global power is the question of this book. The answer is not entirely in our hands. But our response so far has been to accelerate the shift. Donald Trump’s victory crystallises the West’s failure to come to terms with the reality it faces.
Edward Luce, The Retreat of Western Liberalism, 2017.