China is the elephant in the situation room

December 24, 2012

Earlier this month the National Intelligence Council released its Global Trends 2030: Alternative Worlds report — a document that comes out once per presidential administration — mapping out likely geopolitical trends over the next two decades or so. As usual, it’s a must-read, offering comprehensive analysis of the disparate factors that will drive global politics through 2030.

Further, the NIC took bold steps to correct some previous weaknesses in past reports. In the past the report nailed the “what” more often than the “when.” That is particularly the case with its treatment of the United States, for which “past works assumed U.S. centrality.” This time around the NIC sets an increasingly “multi-polar world” — which I call the G-Zero — as the backdrop of its report, acknowledging that the lack of global leadership has accelerated in the wake of the global financial crisis of 2008-09. America’s status as a “hegemonic power” is eroding, and no country is likely to take its place.

This multipolar world is the foundation for the rest of the NIC’s predictions. The report is organized around subsections that range in probability: There are the megatrends that are sure to have an effect, the game-changers that could go a number of ways, and the four potential worlds of 2030.

In my opinion, when it comes to probabilities for the future global order, the single biggest variable — both in terms of its importance and its potential variance — is China’s rise or lack thereof. If there are twin “gigatrends” that supersede all else, they are China’s trajectory and the multipolar world in which it is playing out.

China is mentioned more than 300 times in the report, and the NIC’s assertion that “the US-China relationship is perhaps the most important bilateral tie shaping the future” is dead on (though I’d cut the word “perhaps”). But despite China’s implicit impact on the report, the NIC doesn’t establish it as the twin pillar alongside the multipolar world it vividly describes. Nor do we get a full sense of how a host of negative China surprises could fundamentally alter the world of 2030 as we imagine it.

A look at each subsection of the NIC report demonstrates just how critical China’s development is — or should be — in its calculus.


1. Individual empowerment: Reduced poverty, growing middle classes and new communications and technologies will empower individuals around the world.

Individual empowerment is, on balance, a positive global trend. But in China, it is moving along two tracks. There is the increasingly affluent, coastal, urban China, where citizens have access to the Internet and increasingly demand the protections that come with the rule of law, respect for intellectual property rights and tougher environmental standards from their government. In an authoritarian, state capitalist nation, where the central government’s priority is to maintain its grip on power, empowered citizens are a wild card. An increasingly affluent population that is demanding more transparency and accountability poses a challenge to regime stability.

On the other hand, there is the half of China that is rural, mainly inland, impoverished and uninformed. Should this group fall further behind, China might face unrest and volatility from the other side of the spectrum. China’s two-speed individual empowerment is a more destabilizing dynamic than it may appear.

2. Diffusion of Power: Without a hegemon, power will shift to “coalitions in a multipolar world.”

This is spot on. But if power is shifting away from the United States and its allies, where is the bulk of it shifting to? According to the NIC report, China will provide one-third of global growth by 2025, even if its growth rate should slow considerably. As the United States scales back its role on the global stage, the needs of China’s economy are tying its leaders ever more tightly to the world’s conflict zones.

3. Demographic patterns: We’ll see more aging, urbanization and migration.

China is ground zero for all three of these critical demographic trends and the interplay between them. According to some studies, the ratio of Chinese workers per retiree could drop from 8 to 1 today to 2 to 1 by 2040. That’s a product of a rapidly aging population — and a one-child policy that will keep the labor force from growing fast enough to keep pace. With “two Chinas,” one urban and empowered, the other impoverished and rural, urbanization and migration will cause significant turbulence in China’s social and economic fabric.

4. Food, water, energy nexus: “Demand for these resources will grow substantially …”

For the most part, demand from the developing world – mainly China and India ‑ for these resources will drive conflict surrounding them.  Today, China and India are home to 37 percent of the world’s population — and just 10.8 percent of its fresh water. Their share of the population will grow — as will demand for water as their middle classes grow.

Food is a similar story. Consider meat, which is particularly grain-intensive (and so requires a lot of water). In 1978, China’s overall meat consumption was one-third that of the United States’; today, it’s double. China now eats one-quarter of the global supply of meat, or 71 million tons a year. But per capita, it still only consumes one-quarter as much meat as the United States. Expect the gap to close—with dramatic ramifications for global food supplies — as China’s middle class grows through 2030.


1, 2, 3. Crisis-prone global economy, governance gap, potential for increased conflict: Will multipolarity lead to a collapse or a greater resilience in the global economy? Will a governance gap between countries’ leadership capacities and changing realities overwhelm governments? Will we see more conflict?

Whether a multipolar world makes the global economy more or less volatile will increasingly depend on China’s trajectory and the role it chooses to play on the global stage. In terms of the governance gap in China, the NIC notes that there is a chance that demand for democratization will vastly outstrip Beijing’s progress in that direction. The NIC sees short- to medium-term volatility arising from rapid democratization—and “a democratic or collapsed China” in the longer term, with the bright possibility for huge gains should China’s state structure turn democratic.

Unfortunately, in the case of sweeping democratic change, I just cannot get past that word “collapse.”

Think about the Soviet Union in 1991. Then remember that China is on pace to become the world’s largest economy. In other words, there are a wide range of possible events in China that would have a starkly different — and enormous — impact on what the world looks like in 2030.

4. Wider scope of regional instability: “Will regional instability, especially in the Middle East and South Asia, spill over and create global insecurity?”

In this section, East Asia gets an honorable mention, but it should be front and center. The NIC aptly explains the regional dynamic: “Regional trends will pull countries in two directions: toward China economically but toward the U.S. and each other for security.” As China grows, this balancing act will become unsustainable. And with such an outsized percentage of global growth slated to come from East Asia, this region’s issues are the world’s issues. I don’t mean to give prospects for Middle Eastern and South Asian instability short shrift — they will have their fair share and more. But China and its neighbors are at the center of this trend.

5. Impact of new technologies: Can the advent of new technologies help address global challenges like population growth and climate change?

Technological innovation is a global positive, but its potential to negatively impact China is a substantial piece of the puzzle. Let’s focus first on social media and innovation in information and technology. Any trend that scrambles the status quo of public perception and could potentially pierce the Politburo’s opacity has the potential to be structurally destabilizing. An estimated 570 million Chinese are on the Internet, and approximately 100,000 log in for the first time each day. Can the government keep pace with the lightning speed of technological innovation? What happens if it can’t?

Another field of cutting-edge technology between now and 2030 will be in 3-D printing for manufacturing and robotics. As the NIC explains, these technologies could eliminate low- and middle-wage jobs in developed countries, as has already happened with outsourcing. But what of their impact on a developing nation such as China? A similar “outsourcing” from human labor to a machine equivalent could be hugely disruptive. Machine-driven economic growth could exacerbate the dichotomy between the poor rural China and the rich urban one. What happens when China’s most valuable resource — ample cheap labor — becomes the most serious threat to central political control?

6. Role of the United States: “Will the U.S. be able to work with new partners to reinvent the economic system?”

The report correctly depicts the role of the United States as a game-changer, but China could use a parallel section. China and America’s global actions will increasingly be informed by the other. The report’s question would better read, “Will the U.S. be able to work with countries like China to reinvent the economic system?” Or, if their bilateral relationship proves more contentious, tweak as follows: “Will the U.S. be able to work around China?”

Potential Worlds

In the potential worlds section, we get four distinct global scenarios for 2030 — and a disclaimer that the real outcome will likely contain elements from all of them. On one end of the spectrum, we get a world of Stalled Engines, in which the United States has pulled inward, globalization has largely ceased and the powerhouses of global growth have halted. On the other end, there is Fusion—a world where “China and the U.S. collaborate on a range of issues, leading to broader global cooperation.” There are two other scenarios that I won’t go into here — take a look at the report itself to read about them.

All the NIC’s scenarios are compelling. But China could be better positioned as a key variable and signpost in determining how we get from today to 2030. I structure what comes next based on two simple questions. First, “How collaborative — or hostile — will the United States and China be?” Second, “How multipolar will the world really be — that is, will other countries be weak or powerful in comparison to the U.S. and China?” If the answers are, respectively, “very collaborative” and “very weak in comparison,” then we’ll see a scenario that resembles Fusion, with a workable U.S.-China G2. If, on the other hand, we see a weaker, more adverse U.S.-China, a scenario like Stalled Engines may be more likely. The bottom line: With its vast size and enormous potential for outsized success or failure, China’s trajectory is the true game-changer between today and 2030.


I’ve only scratched the surface of the NIC report. I highly recommend you read it for yourself. And be sure to look out for China — you can’t miss it.

PHOTO: Migrant labourers work at a demolished residential site in downtown Shanghai September 5, 2012.  REUTERS/Aly Song


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

Ian Bremmer doesn’t really understand Chinese culture and fail to put the future of China in a proper perspective.

China is a civilization state and it has a unique force of stabilization through its thousands years culture. Western analysts always ignore the cultural background of the captioned nations and that’s why they also fail so bad in the prediction of events after the “Arab Spring”.

Posted by Ben_s214 | Report as abusive

There’s only one mega-trend, and it’s neither China nor a multi-polar world order. The one and only mega-trend that rules all others is climate change. Although we may have legitimate short-term concerns with other issues such as political stability in the Middle East, for the long term there is only climate.

To judge from this article, climate is not on the agenda for the NIC, which is so enchanted by its geopolitical savvy that it cannot recognize that its deep knowledge has made it blind to the elephant in the room.

It’s the climate, stupid. Nothing else really matters. It doesn’t make any sense to talk about economic development in terms of GDP or a rising middle class. It only makes sense to talk about economic development in terms of CO2.

This whole article amounts to nothing more than speculation about rearranging the deck chairs on the Titanic.

Posted by Komuso | Report as abusive

Thanks for the link to the report. It is very interesting reading. I hope many do.

Posted by tmc | Report as abusive

The reality, which you gloss over in the section entitled ” Food, water, energy nexus: “Demand for these resources will grow substantially … Their share of the population will grow — as will demand for water as their middle classes grow. Expect the gap to close—with dramatic ramifications for global food supplies — as China’s middle class grows through 2030.” is that there aren’t enough resources to supply the world with anywhere near OECD standards now, and arguably not enough for everyone to survive on ANY stanards by 2030.

This will translate into “resource wars”, unlike your peaceful cooperation scenario.

Posted by PseudoTurtle | Report as abusive

Frankly, ANY report that purports to predict the future in roughly 20 years from now should be viewed with a high degree of skepticism, which would perhaps have made a better approach for your article than simply to accept it verbatim.

Posted by PseudoTurtle | Report as abusive

There is no G 2. There is only one super power, believe me, it is market. Market will be the government of the governments, the master of the masters, the lord of the lords and the king of the kings or queens. All the people, all the nations, all the technologies, all the future and all the hot water will knee down in front of market. Market governs everything and anything not only on the planet of earth. Neither person nor nation can live alone. The future is the future of market. Market Is God.

Posted by | Report as abusive

You know it never fails to amaze me how off track this sort of report is. I mean, talk about self serving political garbage. Here’s the bottom line, pardner. Oil dependent oil importing economies are dead or dying. Oil exporting economies are surging. Canada’s just fine, Norway, Russia, all net energy exporters. The life blood of any country is was and always will be energy. The short term prognosis for ANY oil dependent oil importing economy is, 1) how much is it bleeding cash for energy which is 10 times more expensive than 15 years ago and 2) how much is it in debt which will affect it’s ability to change infrastructure to stop bleeding cash and 3) which governments are going to overcome the vested interest driving their economies into the ground.
Answer those questions and you’ll have a solid look at the future.

Posted by UScitizentoo | Report as abusive

I agree, except “Market as God” should really be “Market as 666″.

Posted by PseudoTurtle | Report as abusive

Humans driven and dominated by the selfish (and even unreasonable) will continue to expand, spread and spend away resources in their community, their area, their country. The only way for them to survive is to spread to another area, taking the resources and lifelines from someone else and then say “that’s why life is”.

There will always be excuses to do bad things if the underlying intention is ill. The unreasonable will refuse to treat people the same way they want to be treated, will refuse to respect other’s free will, will refuse to consider themselves in other’s situation.

War will not be done in a flash, with bullets and explosion. The stealing and robbing will still be there, but it will be done in a slow and steady way. It will not be done with the fist and force but with the slow and firm hug under the ‘peaceful’ mask.

Posted by trevorh | Report as abusive

btw, my comment was not meant to target any country specifically just in case it upsets anybody.

I was talking about a widespread general problem everywhere. Too many people don’t know or don’t care about their limit. Too many unreasonable people…

Posted by trevorh | Report as abusive

I don’t think market can solve everything. It must be combined with the government..

Posted by starrystarry | Report as abusive

I think the report is very easy reading and touches on most economic drivers fairly well. I would love to read one of the real reports (the classified ones). I agree with most perspective in it, though I think they were purposely light on the impact of Israel. I think shortly a war will force the United States to decide if it will truly support Israel. As Winston Churchill eluded to, I think we will support them initially, but then realize that pretty much the rest of the world will be against us, and we will withdraw support. We’ll see.
I really doubt much of the “Fusion” world will occur. I think the world will be much closer to the “stalled engine”. The Individual Power megatrend is causing a lot of havoc and I think that trend will continue. The most recent challenge to it was soundly beaten back at the UN. The down side of this megatrend is less thoughtful government and more mob rule. I think there is a period of our history shaping up where we find that we are not ready for a truly democratic government where all people have equal input. The world and especially the United States are still far to diversified to have a strong, cohesive voice. It will take many generations for that to occur.
I say this as I troll thru the comments on around a dozen international news sites. The vast majority of comments are still at a personnel and national level of greed. I see extremely few that are global and generous.

Posted by tmc | Report as abusive

As the US becomes a net energy exporter (and shale gas is exploited in other areas) energy becomes less important.

Fresh water will be an issue, environmental degradation and extreme earth/weather events will possibly be game changers. As there is no real market in fresh water, and what people are able to pay for the sort of volume they need is close to nothing per gallon, it is difficult to see how such issues can be addressed. Suffice it to say fresh water issues will put a brake on growth in China, South Asia and the Middle East.

But how China can handle population aging is the really big variable. Much of the West’s issue is tied up with an aging population. China faces a much more rapid aging. Just because they don’t have government benefits doesn’t mean there is no cost to aging. And it will make the costs less predictable and possibly higher.

It is hard to see how any nation can handle all the issues China has coming without major upheaval. Telling the West we don’t understand, or that China is a civilisation and we are somehow not (i.e. ‘uncivilised’) is just silly.

How can a one party state leadership show any level of flexibility? I cannot see the CCP relinquishing power voluntarily. If they do not relinquish power they face the stagnation of rule by committee. Involuntarily power change is called revolution.

China has major issues, the leadership does not have the authority and charisma of Deng Xiaoping, never mind Mao. I see no path forward for China that will not include revolution.

Posted by Dafydd | Report as abusive