Chapter 55 epilogue

The war is over and the enemy is defeated.The war lasted 6 years and claimed millions of lives.In the face of war, people never surrender. In 1945, Nazi Germany could no longer threaten the airspace of other countries, could no longer threaten to invade, and the Emperor of Japan had surrendered to the Americans.Hong Kong and Singapore became outposts of the British Empire, and the empire remained intact.Britain won the war, but the country was bankrupt. To support the war, Britain spent 25 percent of its national income and borrowed nearly $15 billion in foreign debt, a staggering figure at the time.During World War I, Britain's worldwide income supported Britain's war spending.During the Great Depression, Britain remained a creditor nation.And World War II changed everything permanently.During the war, Britain's global exports suffered a severe setback and national income plummeted.To support its troops to continue fighting, Britain relied on its closest ally, the United States, one of the few solvent nations in the world at the time.The United States provided Britain not only with money, but also with men and supplies, and the two allies joined forces to win the war.

The war devastated Britain's finances, and the infrastructure of cities like London and Liverpool was severely bombed.Postwar Britain needed cash, and it reached out to the United States for help.Britain wants the U.S. to provide it with an interest-free loan of $5 billion over 50 years.At the time, Britain was sure that their friend and ally, the United States, would agree to the request.But to their surprise, the United States rejected the request.Britain quickly made it clear that unless it could get loans, it would not be able to repay its debts, nor would it be able to import enough food to feed its people.The British government was close to bankruptcy, and the empire was facing a crisis of being unable to repay its debts.

After intense negotiations, the U.S. agreed to lend the U.K. $3.7 billion at an interest rate of 2 percent.Having to borrow money from the United States, and having to pay interest, was embarrassing enough for Britain, but the situation was even worse.According to the agreement, Britain had to end the preferential tariff policy for its colonies.The UK also has to abide by the 1944 Bretton Woods Agreement, under which global exchange rates would float against the dollar rather than the pound, and Britain would also agree to free convertibility of the pound into the dollar.These actually mean the collapse of the entire Empire State Building in Britain.

The British Empire had two pillars: a navy and a closed system of trade and commerce.UK can export goods to India and it knows there is a market for its goods in India because it does not allow India to freely import goods from other countries.By demanding that Britain open its colonies to American trade, and by forcing Britain to agree to an exchange of dollars and pounds, the United States effectively forced Britain to end its imperial rule.The end didn't happen immediately, but it was also very quick. In 1947, India became independent, and in the next 10 years, other British colonies also became independent.Referring to the dramatic shift in the Anglo-American balance, one British official put it bluntly: “It is impossible for us not to realize that we are taking a backseat.”

This is exactly what the US government wants to see.Although the wartime relationship between British Prime Minister Winston Churchill and US President Roosevelt could not have been more friendly, there were powerful figures in the US government, both during the war and after the war, who wanted to see the end of imperialism and the collapse of the British Empire Building .Some do it out of principle, others out of power.Despite the friendly feelings between the two countries, the United States wanted to gain its own place in the international arena that had been dominated by the United Kingdom.The war strengthened the position of the United States, Britain was severely weakened, and the United States was able to force Britain to take a backseat.

By 2030 or even earlier, China will be a larger economy than the United States, although it may still be less wealthy than the United States on a per capita basis.It would be foolish to try to guess whether the United States will be a creditor or debtor country in more than 30 years, but before then, it is entirely possible that the United States' demand for foreign capital will be so great that the United States will have to abide by certain rules, and the United States may also To suffer the hardship and humiliation that Britain suffered in 1946.Just as Britain's once-sustained imperial system eventually led to stagnant growth, so the United States' adherence to market capitalism may have led to diminishing returns, and perhaps it has.That would put China in an enviable position, giving it the ability to remake the world according to China's ideas rather than America's.

China and the United States are not incompatible.China may find that the demand for raw materials and markets in the world, especially the United States, can satisfy its national interests as a nation-state, so as to strive to have more power than other countries after paying the same price.Even if there are some unexpected twists and turns, China can continue to develop and prosper in an open market without surrendering more power in the next 30 years. This does not mean that China will become an opponent of the United States. The relationship between China and the United States will move towards confrontation.And China's overtaking of the United States does not necessarily mean the end of America's development and prosperity.In fact, in the decades after the end of World War II, Britain, severely weakened in the war, remained prosperous and enjoyed a considerable standing in the world, if not a global hegemon.

America still has rich capital and cultural resources.China still has a long way to go before it can achieve wealth and self-confidence comparable to that of the United States.The combined power of the two countries is stronger than either side alone.The long-term prosperity of the world driven by the US economy cannot be brought to an end by an economic crisis like the one in 2008 and 2009. Of course, the future development of Sino-US relations may also encounter unexpected changes.If the history of the past few decades has taught us anything, it is to be ready for the unexpected.For example, the collapse of the Soviet Union and the "9.11" terrorist attacks, they all shocked the world suddenly.Although China's rise is a relatively certain fact from the present point of view, there may still be some huge turning points in the future.Although the economic integration of China and the United States is extremely important to the world today, this integration may be weakened or even terminated in the face of various pressures on the future development path.Environmental or geopolitical factors could also change the trajectory of Sino-US integration in unpredictable ways, but at least we should consider this possibility.

In order to maintain the development of Sino-U.S. integration and promote the stability and prosperity of the future world, both China and the U.S. need to consider making some fundamental changes.At present, part of the US Seventh Fleet is deployed in the Pacific region under the pretext of defending China's Taiwan and maintaining peace.This begs the question of whether China's Taiwan needs U.S. protection, especially as Taiwan's economic ties with mainland China deepen and cross-strait relations grow closer.Although close financial ties cannot prevent armed conflict, the cost of armed conflict should be much greater than before for both China and Taiwan.With regard to Sino-Japanese relations, despite the historical hostility between the two countries, the growth of Japan's wealth is now increasingly dependent on Chinese demand for its high-end equipment.Although the two countries do not have deep feelings for each other, their ties are getting closer.Against this backdrop, the continued presence of the US fleet in the region could be viewed by China as a hostile or even unnecessary provocative act, similar to the situation faced by Germany after World War II.

Both Chinese and American governments continue to formulate their own domestic economic policies.When both sides talk about issues such as interest rates, currency values, and budgets, they both believe that they have inviolable sovereignty over these issues.However, China holds a large amount of U.S. assets in its foreign exchange reserves, and China’s purchase of U.S. treasury bonds is also conducive to the development of the U.S. economy. The capital flow between the two countries is related to their respective domestic balances. In this context, if the two sides can jointly formulate economic policies , the result may be more favorable.Fortunately, the two sides are now in a dialogue, but officials from the Federal Reserve and the People's Bank of China sitting together to discuss interest rates are different from the two sides jointly formulating economic policies.Perhaps joint economic policymaking is unbelievable for both sides now, but it may soon become a requirement for economic integration between China and the United States.

Other possible shifts are equally important.Instead of focusing on protecting intellectual property rights, American companies and the government should focus on innovation and enter the Chinese market; instead of always trying to protect their technological secrets, Americans should accept the fact that technology is almost impossible to monopolize. Understand that innovation is the only advantage, and seize the Chinese market, which is beneficial to both parties.These include allowing China to buy ailing U.S. companies if it has purchasing power.Of course, China should also adopt a similar approach and not create obstacles for companies from the United States and other countries to acquire Chinese companies. Finally, there is the pressing issue of the environment.China and the United States are currently major greenhouse gas emitters, and China's rapid economic development means that environmental problems will continue to intensify in the near future.What China and the U.S. need is not to blame each other, not to say who should bear the main responsibility for environmental problems, and who should take the greatest action to reduce greenhouse gas emissions. What the two countries need is joint action, especially Consider that China's greenhouse gas emissions are partly caused by foreign-owned companies producing products for American consumption.Now, in the formulation of future environmental policies, the cooperation between the two countries has shown some exciting signs. However, in terms of the degree of economic integration between the two countries, the two sides still need to carry out more comprehensive cooperation. Are China and the US willing to make changes?Will the above-mentioned problems hinder the further development of the integration of the two countries?We still have to wait and see.For America, however, the history of the end of the British Empire is crystal clear.What ended the British Empire was not its enemies, but its so-called friends.It all happened quietly, but with lasting results.This reminds us that the challenges facing the United States in the future may not come from overseas enemies, traditional hostile countries, or non-traditional terrorist threats, but from the lack of preparation of the United States.Changes in climate and global business are such challenges.Both of these changes may have something to do with China.The U.S. government can respond to various emergencies, but in the face of irrepressible external economic competition, the U.S. government is helpless. If it is to avoid the fate of the United Kingdom, the United States must reorient itself, shifting its focus from addressing the military and security challenges of the 20th century to addressing the economic challenges of the 21st century.This requires Americans to change their understanding of the world and the way they interact with the world.And this requires Americans to fundamentally reflect on the state of government and national security. The strategy implemented during the "Cold War" to deal with the threat of the Soviet Union is no longer applicable today when the Soviet Union collapsed and China began to rise steadily. Over the past 20 years, China has undergone economic and political reforms.In the past 20 years, the US government has hardly changed, and only began to intervene in the economy after the outbreak of the financial crisis in 2008.The last intervention on this scale was in the 1930s.But in this financial aid, the U.S. government is still using old methods from the past, which were not designed to deal with today's problems.Therefore, the choice Americans face now is: either try to rely on outdated methods, ideas and government agencies decades ago to revive the economy, or use innovation and talent to reshape the system and ideas to adapt to the current world, otherwise, Americans We can only prepare to wait for the long night after sunset, and live by memories.Hope Americans can make the right choice.