Superpower Transition - USA to China

USA as a Superpower is in decline, and the Chinese are the rising Superpower. At what stage of this transition, are we at? Ray Dalio in his paper "The Big Cycles over the last 500 years", describes the stage of this transition as being like this.

In this simplified representation, NLD is Netherlands, GBR is Great Britain of course, USA and China are fairly self-explanatory. A more numerically precise diagram of the transitions can be seen below.

Please note the rate at which China is approaching dominant superpower-hood - very fast.

And I think this following chart is also very telling. Please note in that next chart:

  • That education is the leading cycle.

  • Please note that it is the emerging Asian countries that are very heavily investing in education, while in the West, education is an area of under-investment.

  • That Innovation and Technology (let me characterise this as maths, science and engineering - the hard disciplines), is the second leading cycle.

  • Please note that Asian countries - particularly countries like China, South Korea and India, are investment heavily in this area - whereas in countries like USA and Australia, these sectors are being de-emphasised and areas of under-investment.

To read Ray Dalio's full paper, please go to this link.

If you are interested in Superpower transitions, another useful paper, that you should read is Graham Allison's paper "The Thucydides Trap". This paper deals with the question of whether the transition of superpower-dom, from USA to China, occur without there being war between the two.

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