Numbers Don’t Lie

Back in 2010, Goldman Sachs predicted that China’s economy will surpass that of the United States by the year 2030. It could happen sooner if the US fails to get its financial house in order. By the year 2050, China is seen to have an economy 40% larger than that of the US with nominal GDP of $58 trillion. America will trail behind with its $34 trillion economy.

We live in a time in history when a shift of world powers is taking place. The next 15 years will usher in the dawn of the Chinese epoch where our neighbor to the north will have the loudest voice in world trade, global policy, and geopolitical influence. This will have a profound effect on the Philippines given the many paradigm shifts we will have to contend with.

First among these shifts is that the new superpower will be one that operates according to strong Confucianism values. These are values we Filipinos are hard-pressed to understand considering our predominantly western orientation.

Secondly, we will be coexisting with a superpower that views itself as not as a nation state but a “civilization state.” As such, it act like a empire and for all intents and purposes, is governed like one. It has aggressive expansionist ambitions with the military and financial resources to back it up. This “kingdom” state of mind is nothing new. It is deeply entrenched in the Chinese psyche, one that goes as far back as the Qin dynasty.

Third, unlike former superpowers like the US and UK who embrace diversity on the back of their multi-racial societies, ninety percent of Chinese identify as belonging to the Han race. In Chinese society, cultural purity is embraced while diversity is frowned upon. This explains their aversion towards inter-racial marriages as the Hans view themselves as superior to others.

Finally, the Chinese generally look at its government as a morale authority. To their majority, the state is infallible as it is seen as the guardian of their civilization. Citizens rarely challenge the state, unlike western democracies who question their governments at every turn. This leaves the Chinese government with virtually no moral check and balance from within.

These paradigm shifts make China a dangerous superpower, especially for the Philippines whose territories and resources are within China’s expansion path.

Thankfully, China will not be the lone superpower of the future, according to former American assistant secretary of Defense, Joseph Nye. The US and the European Union will still maintain collective dominance on the military front. It will also maintain its influence on public opinion given its iron clad grasp of the communication superhighway through mass media and the internet. Economically, the US, India, Brazil, and Russia will balance the financial might of China.

Hence, the world of tomorrow will have a multiple polarity of power with China as the predominant figure. In many ways, it will be akin to the world order of the 18th and 19th century when the UK was the dominant force, but mitigated by France, Germany and Italy.

The dynamics of power will be different with China in the forefront as compared to how it is today.

Whereas in the 20th century, America dictated how the world was governed through the establishment of the United Nations, with a polarity of power, no single organization or country will have the final say on global policy or rule of law. Global governance will be largely dictated by agreements and treaties between nations. We are seeing it already with treaties like the Paris Agreement on Climate Change and the World Trade Organization.

Thus, we will see alliances shift depending on the interests of nations. The Philippines must attract and collect enough allies to battle China’s creeping invasion.

Pricewatehause Coopers and Goldman Sachs both see the Philippines rising to become the 19th largest global economy by 2050 with GDP of $3.3 trillion. In financial respects, this is welcome news. However, this puts us in a dangerous place known as the “middle level trap.” The middle level trap is that awkward place where an economy is too small to dictate global policy but large enough to be affected by every accord signed by the more powerful nations. The Philippines must gain a louder voice in the world stage.

The ability to influence policy and global decisions is where true power lies. Traditionally, power was gained by amassing military power and/or economic strength. But in this age of hyper-connectivity, a new source of power has arisen — its called “Soft Power.”

Soft Power refers to a nation’s ability to attract coalitions, followers, cohorts, and cliques not by force or money but by persuasion. It is the ability to shape the preferences of others through appeal and attraction, says Nye.

It is not a far fetched idea.

Just think how we Filipinos despised and feared Russia in the height of the cold war. We Filipinos identified with America and viewed the situation through their point of view. This is soft power at work.

As a nation in the middle level trap, the Philippines must attract followers towards policies that work to its best interest. After all, policies that are pushed by many are those that are most likely to be enacted. This is especially important for us as China pushes forward with its agenda of territory expansion at our expense .

How does a nation gain soft power?

Two ways, the first is a given — by putting into place a well-oiled diplomatic machine. The second is to aggressively promote a nation’s culture so as to let the world identify with it and embrace it as its own.

Developed countries have been working on their soft power since the end of world war one. France has created Alliance Francaise for this purpose as did the UK with its British Council, Germany with its Geoethe Institut and Spain with Instituto Cervantes. A few developing countries in Asia have recently been on a cultural assault of their own. India has been doing it through the promotion of Bollywood, Yoga, and Ayurveda while South Korea has been successful with K-Pop.

In the Philippines, the National Commission for Culture and Arts (NCCA) is the main agency tasked to preserve and promote Philippine culture. The fact that Congress has granted the NCCA a token budget of P30 million reflects how our legislators view cultural development and promotion. They don’t think much of it. The time has come for government to revisit our cultural program.

The Philippines must plant the seeds today to gain its gravitas for tomorrow. Amassing soft power must be part of our arsenal given our military and financial limitations to face China. The good news is that we are not bereft of cultural facets to sell to the world. Our performing arts, visual arts, cuisine, and folklore are compelling enough to have people appreciate what it is to be Filipino. Done right, we can influence the world to embrace the Filipino way of life and help us defend it.


Andrew J. Masigan is an economist.