A U.S. decline?

While in Sweden during the government shutdown/debt ceiling fiasco, I blogged asking whether Americans realized the huge damage such events do to America's reputation abroad. I also noted  that, while some Americans react by saying "who cares?" they ignore two important facts.

First, that America's soft power -- the attractiveness of our society and culture -- is one of our big economic and security advantages. And second, that the dollar's status as a reserve currency -- and the willingness of foreigners to hold dollars -- dramatically eases our economic situation. 

Recently in Singapore for a few days teaching change management to senior government civil servants, I had the chance to dine with a very wise Singaporean observer of the international scene -- and someone who feels the United States is in significant decline in the world, with Asia (particularly China) rising. 

He began our discussion of this topic by noting that the United States invented globalization, but that our attitudes are far less global than those in many other countries. That will inevitably hurt our ability to compete in a global economy, he argued. He believes that leaders in Asian countries are looking with distress at many events in the United States, and asking themselves whether they should be continuing to hold so many U.S. assets. 

"The Chinese have a very long-term perspective," he added. "You see that each year they are slightly reducing their exposure to the U.S. dollar. Watch -- it will go down each year, and suddenly Americans will notice that Chinese are hardly holding any dollars any more." (He added that the Chinese renminbi has now catapulted to second place in the world as a currency used in world trade, up several places in just two years.)

He followed with a clincher: "America is going in the direction of Brazil." A big country, not unimportant, but marginal in the big scheme of things. 

At this point, I objected. The United States still retains an enormous mind share in the world. I don't understand very much when I watch Chinese (or Chinese-language Hong Kong) TV, but I can understand enough to hear how often in daily news broadcasts the word "America" is used. Despite increasing interest in China in the United States, I would estimate the word "America" appears easily 10 times as often on Chinese TV news as "China" does on U.S. news. Partly this may reflect my friend's point about Americans' insufficiently global thinking, but mostly it reflects the reality of U.S. influence on the world stage. Let's just say you don't hear the word "Brazil" very often on Chinese television. 

After we had dinner, I was watching Chinese-language TV from Hong Kong in my Singapore hotel room shortly after the death of Nelson Mandela. I was struck by how quickly the station went to Washington for President Barack Obama's statement on Mandela's death.  That segment was broadcast before any reactions from China. And on the plane coming home from Singapore, I read in Hong Kong's South China Morning Post a story about 10,000 Chinese high school students trekking to Hong Kong to take the Scholastic Aptitude Test so they could apply to U.S. universities.  The article noted that at the most-prestigious high schools in Beijing, a third of the students take SATs.  

I still fear we are screwing up these advantages by some of our behavior. But for now, they still exist -- and Americans need to understand that if we squander our many advantages as a force in the world, it will be a self-inflicted wound.