The Australian: Robert Patman and Aaron Lim: Global dominance won't be changing hands in a hurry

Excerpt:
"SINCE the invasion of Iraq in 2003, the US has witnessed an alarming decline in its global standing. By 2007, this trend had assumed almost catastrophic proportions. A BBC World Service survey of more than 26,000 people across 25 countries found that only 29 per cent believed that the US was having a positive influence internationally.

For some observers, such a trend could be symptomatic of a deeper decline in the dominance of the US in global politics. Yale professor Paul Kennedy, for example, has noted that historically no great power had exercised its dominance permanently, and the US may prove no exception to this rule. Such an assessment seems to rest, above all, on the proposition that the US economy is declining in relation to the world's other leading economies and that this pattern, if continued, will sooner or later eat into the military and political power of the US.

Certainly, there are recent signs that China is emerging as a key actor in the global economy of the 21st century. In February, the Chinese stock market experienced its worst day of trading, with the Shanghai Composite Index falling nearly 9 per cent. The slump in Chinese stocks triggered falls in markets across Asia and Europe. This was perhaps the most visible international expression of Chinese economic power since the end of the Cold War, and it graphically highlighted the extent to which Beijing has integrated itself into the global economy. In contrast to previous capital market slumps, it was China that served as the centre of gravity for this global share slide. Investors, wary of the sudden prospect of government regulatory interference in Chinese markets, coupled with broader market concerns over the health of the US economy, particularly its record current account deficit, responded with a global share sell-off."

http://www.theaustralian.news.com.au/story/0,20867,21561627-7583,00.html

Alex

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