China and the USA, which is best placed to run a semi-autarkic economy?

from Ikonoclast

In a television special about China, one patriotic Chinese commentator said:

“China’s population is four times bigger than that of the USA, therefore China’s economy should be four times bigger than the USA’s.”

On an equality basis he is justified. Why shouldn’t Chinese people, on a per capita basis, have the same wealth as citizens of the USA? On a realism basis, we would have to question how this would or could come about. If we were to ask Scotty of Star Trek fame what he thought of this proposition he might well say, “The biosphere cannae’ take it, cap’n!”

The other realism basis which indicates the difficulty of achieving this outcome (China’s Gross Income being four times that of the USA) is that of Realpolitik. China’s economy on real measures (and probably even on PPP measures) has already surpassed the US economy. The majority of the US polity is still in denial about this fact. The perception of an entity used to superiority usually lags behind the reality of any downward curve when a decline in relative power is occurring. At some stage perception will catch up with reality, at least somewhat unless complete insanity takes over, and there will be a belated and shocked realization that the US is falling behind very substantially. This leads to the so-called “Thucydides Trap” postulated by Graham Allison. It was Thucydides who wrote: “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.”

The relative shift of manufacturing from the USA (and the rest of the globe) to China is part of this picture. The simple reality of global labor arbitrage under globalized capitalism more or less ensured this relative shift of manufacturing to China and S.E. Asia more generally; also some shift to places like India and Brazil. These indications suggest that the decline of the US in manufacturing will continue, first in relative terms, due to labor arbitrage, and eventually in absolute terms due to biosphere limits. How will the USA react to this relative and then absolute decline? The short answer is probably “not well”. It’s doubtful any country would react well.

In a world of limitation and contraction, the apparent benefits of international trade (comparative advantage) may not hold. Where large continental and sub-continental powers possess considerable domestic resources, the attractions of autarky may come to outweigh the attractions of trade based on comparative advantage. Exploiting comparative advantage in necessities (food, energy) implies a necessary surplus in the exported items. When a surplus is no longer achievable, domestic political pressures will drive the need to keep food and energy production for home consumption. This could also apply to raw materials in general. Both Realpolitik (power politics) and resource/energy shortages could provide an impetus towards autarky. Trade wars may become more and more geared to create real shortages in targeted countries and not just be attempts to retain manufacturing. This is a gloomy but realistic prognostication I think. In relation to China and the USA, which is best placed to run a semi-autarkic economy and exploit its hemisphere of hegemonic power? That may be the question. I’m not advocating this trend, I’m warning as to its possibility. How would we prevent it?
https://rwer.wordpress.com/2019/06/25/under-trump-manufacturing-job-growth-slows-to-a-trickle/