A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Pierre Pagesse

A new global hegemonic cycle

Thierry Pouch,

Permanent Assembly of Chambers of Agriculture (APCA)

Last May, the Cyclope report by Philippe Chalmin confirmed China as hegemonic power and “price maker.” Now, the World Bank has announced that the Middle Kingdom’s economy should overtake that of the United States, not it 2019, but in 2014, it will overtake the European Union, currently the world’s largest economy, in 2015.

In a recent editorial (extract here1), Thierry Pouch discusses this issue which, if it happens, could be particularly destabilizing. To guard against this, he said that Europe and the United States are trying to unite under the Transatlantic Partnership. Yet for agriculture in particular, this free trade agreement will only confirm Europe’s illusion of power as it swims up current against other global agricultural powers such as China.

Effectively, each year China is reinforcing its agricultural strategy for food self-sufficiency both internally and externally. If this goal is difficult to estimate in terms of maturity, it is clear that its agricultural production will continue to grow, while it continues to supply foreign markets, risking disparities in agricultural markets.

momagri Editorial Board

The news is a shock. After revising its forecasts and readjusting China’s GDP, the World Bank has declared that China will overtake the United States, not in 2019 as originally predicted, but ... in 2014 and the EU in 2015! So, this year, China will become the largest economy in the world. It is already the world’s first exporting power; it will now be the first in terms of GDP. Is this the beginning of a new hegemonic cycle?

Hubert Vedrine, Lionel Jospin’s former Foreign Minister, recently stated in an interview, “the superiority of the West over the rest of the world is increasingly illusory”. Western values are currently being eroded, even though the countries that hold these values are still powerful. This diagnosis also probably applies to economies. Since globalization, and because they are catching-up, emerging economies are increasingly challenging the position of industrialized powers. Projection exercises for establishing rankings based on GDP or shares of world exports led, it should be remembered, to the idea that China would be first in terms of world GDP between 2020 and 2030.

Few imagined that such projections would be achieved faster than expected. Yet this is what we are witnessing. The World Bank has made a number of revisions to its statistics as part of its International Comparison Program, and indicates that China will overtake the United States in 2014, with classification based on the GDP indicator in purchasing power parity (PPP), yet in 2005, the process was envisaged for 2019. Though the EU remains the world's largest economy, this will only be temporarily because China will also supplant it in 2015.

This process is well known to economic historians.

Once the phase of economic catching-up has begun, emerging economies generally end up by overtaking, which may result in a power claiming leadership over world affairs. Combined with China’s position in international relations, and in particular on the UN Security Council, the question that arises is whether China has the ambition to become this hegemonic power, in place of the United States. Does it have all the attributes (economy, money, technology, military, language)? It is the leading trading power, it will soon become the first economic power; its currency also exceeded the Euro in trade contracts at the end of 2013. It should not be forgotten that occupying the rank of hegemonic power comes at a cost that the United States can no longer finance, thus paving the way for their successor.

Some will see this concern as premature, inasmuch that not only has the Chinese economy seen slow growth in recent years, it is exposed to the risk of a bursting property bubble and its poverty rate remains high. However, the World Bank’s message should be taken seriously and also the converging message of the IMF. Though China’s position in the global economy does not yet mean that it will rapidly succeed the United States, the process is clearly underway. It is understandable why the Americans were so quick to enter into negotiations with the Europeans for a transatlantic agreement, which, if signed in time, will allow them to contain China’s power. As for the Europeans, docile followers, they expect a positive impact for the West to keep hold of world affairs. Is this a repetition of 1930, when Germany and France were candidates as the successors of England? Distinguished historians, enlighten us!

Another useful index to show that something fundamental is about to occur is that crises often, even always, see turning points and the end of cycles as harbingers of a new hegemonic cycle and new configurations of power and power relations. England before yesterday, the United States yesterday, why not China tomorrow. Ultimately, the inexorable rise of China will increase its appetite for raw materials. Is a further episode of market turmoil to be expected in the coming months or years? The tilting of the world economy’s centre of gravity has become a reality.

1 Follow this link to read Thierry Pouch’s editorial:

Page Header
Paris, 16 June 2019