We are not in Kansas anymore. More importantly, Kansas is not even where it once was.
Once upon a time and in the minds of most living Americans, Kansas was more than just a synonym or a metaphor for America's heartland, it was the actual geographic mid-point of the United States. You could debate whether the exact location deserving of this honor was closer to Lebanon or Grenola, but at the end of the day, all would agree that by virtue of the power and position of the United States, somewhere out there in the middle of nowhere was the center of the world.
No more. America may be the richest and most powerful nation on earth. But the world's economic center of gravity is shifting away from Kansas much more rapidly than anyone had any reason to expect it would even a decade or so ago. (I know this for a fact -- as a senior economic official in the Clinton Administration who helped put together and run the first U.S. inter-agency effort focused on the world's largest emerging markets, I remember how officials would smile patronizingly and roll their eyes, "Yes, China, India, Brazil, yes... important, but not in our lifetimes.")
Now, the evidence is piling up that not only has the economic center of gravity shifted much more rapidly than anybody had expected, but that with it is shifting the political center of gravity -- and I would argue, even more importantly, so too is shifting the world's intellectual center of gravity.
Earlier this month, the United Nations Conference on Trade and Development published a survey in which business leaders were asked where they would be most likely to direct investment flows over the next several years. It is the kind of study that in the recent past would always have seen America on top. This time we finished fourth, behind China, India and Brazil. Yesterday, in a very well done piece called "The China Cycle," Geoff Dyer in the Financial Times noted that not only did China overtake the U.S. as Brazil's largest trading partner last year but that this year it is likely to emerge as the largest direct investor in Brazil.
Why is this relevant to Kansas? Well, on the one hand it illustrates how other nations have overtaken the U.S. in influence -- even in our own hemisphere, and even in a country that would once have fallen within our "sphere of influence" (although the United States has always been much less influential in Brazil than it either thought it was or wished itself to be). And of course, part of the China boom in Brazil is tied to China's need for raw materials to fuel its growth. That includes Brazilian wheat and soy and other foodstuffs, where Chinese demand has helped make Brazil the world leader (and has also played a huge role in influencing the prices paid to U.S. farmers).
Every day you read of new deals in Brazil's energy or steel or agricultural sectors in which Chinese companies are taking positions. Each ties the two countries closer together. Some in Brazil's old guard might criticize this as part of what they critically characterize as the "Third World" orientation of the Luiz Inácio Lula da Silva administration's foreign policies. This is simply old-think, of course. The connection between the two countries has much less to do with the Third World of the 20th century than it does with the emerging first-tier powers of the 21st.
At the beginning of Dyer's piece, he writes,
Deep in the Amazon jungle, huge chunks of red earth are torn out of the ground at Carajas, the biggest iron ore mine in the world, to be transported halfway round the globe to the steel mills on China's eastern seaboard. There they are turned into the backbone for millions of tower blocks in hundreds of booming Chinese cities.
The boom in China's cities is the subject of much discussion these days. The FP Global Cities issue is just one example, and a particularly good one. China will grow from less than 70 cities of a million people today to over 220 such cities by 2030. It will grow from six cities of over 10 million to 13 such megacities in the same period. To meet this goal, it will have to build the equivalent of two Chicagos a year of commercial space. This growth will ensure that over those two decades Chinese cities are the places building the most power plants, highways, subways, high speed railways, green buildings, tall buildings, and factories. They will see the greatest inflows of people and the greatest swings in wealth creation.
What this means in turn is that demand in those cities will disproportionately drive global demand. That doesn't just mean that the Chinese will play a big role in setting the price for Kansas wheat or Kansas-built aircraft, though they will. It also means, importantly, that the decision-makers in those cities -- often people we don't know in places we've never heard of -- will be the ones deciding what the buildings and trains and cars and power plants will look like. They'll do this because they're the ones writing the specifications for the deals and because they're the ones writing the checks. If China spends more, as expected, over the next twenty years on high speed rail than the U.S., Britain, and Spain combined, then who do you think will determine what the fast trains of the 21st century look like?
Furthermore, because these cities of tomorrow will be the demand drivers of the world, they will enable Chinese companies that will have all sorts of advantages in competing for deals within them to quickly grow to be companies with the scale and capabilities to be global competitors. Some of the advantages they have will be fair. Some won't. In the years ahead, how the global system copes with sorting the two out will go a long way towards determining just how level the international playing field is. In the eyes of several very experienced trade specialists with whom I have recently spoken, it may well lead to a weakened, case-glutted WTO blowing a gasket or two and the international trading system facing its biggest challenges in modern history.
This in turn leads to the ways the growth of these cities and China and cities and emerging economies worldwide will lead to a shift in the world's intellectual center of gravity. These are the places in which, in the first instance, much of the world's innovation will be taking place, where new universities will be built, where new ideas will naturally emerge. But also, economic clout brings political clout which in turn shapes global discussions about the big issues of the time. It is by no means certain that the future of the world trading system, to pick one narrow example, will be shaped in accordance with the orthodoxies of the past six or seven decades when some new big players -- like China or Brazil or India -- have very different ideas about the appropriate relationships between states and markets.
We need to be careful not to define such views in old, Cold War terms. It is not about left versus right. It's not about statism versus markets. It's about new hybrids, new systems that may be necessary to help new fast growing economies maintain stability and upward trajectories, and how they can best be integrated into a global system in which they play an ever greater role. It's about a new power structure and new relationships that will tip the balance in favor of ideas that often do not emanate from anywhere near Kansas. In fact, they may emanate from places to which Kansas seems as remote or exotic as Chengdu or Baoding does to the good people of Grenola.
China Photos/Getty Images
David Rothkopf is the CEO and Editor-at-Large of Foreign Policy. His new book, "Power, Inc.: The Epic Rivalry Between Big Business and Government and the Reckoning that Lies Ahead" is due out from Farrar, Straus & Giroux on March 1.