By Stan Grant
China, India, Indonesia, Russia, Brazil: What do these five countries have in common?
They are the future. Our future depends on them. They are not the West.
Collectively, they will account for more than half of all global growth through to 2024, according to figures from the International Monetary Fund. Think again about that: five countries, 50 per cent of growth.
The giant among the five is, of course, China. It has already surpassed the United States as the biggest engine of global economic growth — 28 per cent annually between 2013 and 2018.
By the end of this decade, China is expected to overtake America as the single biggest economy in the world. And of the other four countries — Brazil, Russia, Indonesia, India — each lists China as its biggest trading partner.
The IMF says there is no way the global economy can grow unless these countries also grow. Yet in this week’s budget, did we hear mention of any of them?
No. We did not even hear mention of China. Incredible, given China is Australia’s biggest trading partner, too.
How is Australia handling this hinge point of history?
Australia’s trade with China dwarfs its trade with any other country: more than $90 billion, an enormous 43 per cent of all our exports. For comparison, the next biggest market is Japan, at $19 billion.
Trade is equivalent to 45 per cent of Australian GDP and one in every five jobs in the country.
Treasurer Josh Frydenberg has said this budget is about stimulating, spending and creating jobs. How do we seriously achieve that when our political leaders cannot speak to their counterparts in Beijing?
In the meantime, we hear increasing talk of the “drumbeats of war”. How can we achieve economic growth and boost jobs when the Treasurer, in his budget speech, cannot mention China by name and instead makes allusions about a more dangerous world (read: China threat) and commits to ever more spending on our military?
This isn’t to deny that we live in a more perilous age or that an authoritarian China does not present a threat — or that we need to keep our defence force ready and equipped for any eventuality. But there are serious questions about how our political leaders are handling this hinge point of history.
China is an indispensable nation; our future depends on it. Our future depends on those other countries that make up half the world’s growth — countries we rarely even talk about.
This is not 1992. We have not just emerged from the Cold War; America is not the predominant or sole power in the world; this is not the end of history. We can no longer say, as Western political leaders did then, that China is on the wrong side of history.
The world is turning, history is turning
In its report The World in 2050, international professional services company PwC lists what will be the top 10 economies in the world:
Where did the West go? The report says simply: today’s developing markets will be tomorrow’s economic superpowers.
Outside of the top 10, Vietnam, the Philippines and Nigeria will be the biggest movers in the rankings.
The report compares the E7 (emerging economies) with the G7. In 1995, the E7 were half the size of the G7; by 2015, the E7 had drawn level; by 2040, the E7 could be double the size of the G7.
A Rip Van Winkle “go to sleep and dream away the future” approach won’t work.
The West has been battered by war, growing inequality, stagnant wages, terrorism, economic collapse, declining democracy and rising political populism.
America — the so-called leader of the free world — is a country damaged by unending crisis.
President Joe Biden talks a good game about “America is back” and rebuilding alliances. But how does America lead a world where economic power has so dramatically shifted?
Betting against America
In his recent speech to Congress to mark the first 100 days of his presidency, Joe Biden said it was never a good idea to bet against America. But that’s precisely what many countries are doing.
China’s massive Belt and Road Initiative — one of the largest infrastructure and investment projects in history, covering 70 countries, 65 per cent of the world’s population and 40 per cent of gross domestic product — is a bet against America.
It is part of Xi’s China Dream of a rejuvenated nation, returned to the apex of global power.
Australia is caught in the crosshairs of this global historical turn. We are still a European outpost in Asia, a country with historical ties to Britain and all in with the US.
It has served us well, but that world is passing. The geopolitical, economic and military plates are shifting as the world walks ever more treacherous fault lines.
But this isn’t the discussion we have been having post-budget.
Instead, we are talking about debt and deficit and vaccine rollout and possible election dates. Journalists are engaging in the usual round of predictable “gotcha” questions, and politicians are looking to score tit-for-tat political points.
All around us, the world we knew is giving way to the world we don’t truly understand, let alone are truly equipped for.
China, our biggest trading partner, is now a global Voldemort — he who cannot be named.
But call it what we will — or won’t — China looms over our world and it is dragging those other emerging economic giants along with it.
To stay with the movie analogy, for the West, there is no back to the future.