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As foreign economies grow, the United States gains more opportunities to trade and allocate its resources to industries where it has a comparative advantage. The increased trade and reallocation of resources will lead to more prosperity not only in the US, but around the entire globe. For this reason, China's emergence as a leading world economy will be helpful to the US and other countries.

Adam Smith's assertions concerning the "invisible hand" and "laissez-faire" can be applied not only at the individual level, but also at the state level. The United States, China, or any other state can pursue its own self interests - to grow economically - and at the same time help other states pursue their self interests, hopefully doing so within the bounds of international norms set to protect private property (of other nations) and to promote public goods. Trade relations among states help all states that participate - if they didn't help the trades wouldn't occur. This promotes absolute wealth across states and improves the living conditions among them, following the assumptions made by liberalists.

If any state in the international political economy today were to act in large scale protectionism - in accordance with mercantilists' views - other states would retaliate against it and diminish opportunities of economic expansion for all. The Super 301 legislation of the Trade and Competitiveness Act of 1988 was an example of a retaliatory effort made by the United States against Japan's "unfair" trading policies. Most economists would agree that the protective Smoot-Hawley Tariff Act in the early 1930's was very detrimental to the US economy and the world economy as well.

Therefore, China's emergence as a world power will have more positive than negative consequences. Not only will it help our economy, but by increasing trade relations and globalization between the two states, China may be enticed to move towards a more capitalistic economy and conform to additional international laws and norms - such as human rights (which it has been criticized for). This would help our political relations with them in addition to our economic relations.

The main drawback of a gain in China's power may be our relative loss of power. Of course, the idea that we would lose relative world power (with respect to the rest of the world) is speculation. As has been stated above, our economic gains will only increase as China's increases. We will certainly gain power on an absolute scale, but even if we lose relative power we will possibly befriend China in the process (through trade relations) and thereby gain more political influence on them.

My belief that the benefits that the United States can gain from China's emergence as the world's second-largest economy far outweigh the disadvantages reflect liberal assumptions. The economic benefits that will gain outweigh all the drawbacks and will help the US become a superior nation.

About the Author

Blake Taylor has written many articles about political, financial, and economic issues. To learn more about finance or economics, visit www.fundamentalfinance.com. To read other political articles, go to www.fundamentalfinance.com/blogs.