The war has already been won

Analysing the geopolitical scene at the end of World War One in 1919 it was accepted fact that, with the defeat of its fast rising rival Germany, the British Empire was the pre-eminent power in the world both economically and militarily. However with the vast expense of the conflict and its resulting debt , the reality was that its days of supremacy were over. Within a quarter of a century Britain was a second rate power, though militarily still relatively strong, it was dwarfed by the new global super-power, the USA. Most significantly it was the size of Britain's external debt at the time, especially to the USA, that forced its massive retreat from empire and demilitarisation. So great was the debt that the final payments were only made on 31 December 2006, more than 60 years since it went cap in hand to the USA for the Lend Lease Loans.

Ninety years on from the beginning of Britain's fall, we can see the next great geopolitical shift happening before our eyes. On paper the USA is the clear big guy today, with the world's biggest economy and a huge technologically advanced military that has bases in over 63 countries worldwide. The up-and-coming power today is of course China, and again on paper the gap between the two is huge. And yet the USA's apparent strength is a mirage. When you examine the reality it is clear that not only is China the rising force, but in fact the war for global supremacy has already been won - and China was victorious.

Throughout history geopolitical dominance has been achieved through a combination of four core factors: Economic strength, Control of raw materials; Technological supremacy militarily; and Population size.

Economic strength is vital as it provides the wealth to influence other nations and to pay for a large military. Meanwhile a technological advantage militarily over its competition is critical as losing wars is not on the agenda. The British Empire of the 19th century was in no small part due to the British having the world's most advanced machine gun of the time, the Maxim, and a huge navy that embraced iron clad steam powered warships earlier than its rivals.

And to capture and control an empire one must have man-power, lots of it. This is something that Britain being to the first nation to industrialise had a early head start against its initially agrarian (France, Spain, Russia) or politically divided (Germany, Italy). Likewise the USA gained its momentum as its population leapfrogged Britain towards the end of the 19th century with the massive surge of immigration that followed the Civil War.

Finally a nation must have control or access to the core raw materials essential for the running of its economy and especially its armed forces. Without these it can be held to ransom by its competitors

When one examines these factors in the context of today it becomes abundantly clear that in the war to dominate the globe in the 21st century China has already been victorious.

For a century, ever since the then British First Lord of The Admiralty, Winston Churchill, decided to transition the Royal Navy away from coal power and onto oil, black gold has been the obsession of foreign policy mandarins in London and later Washington. The theory went that if you controlled the oil supply then you would have economic and therefore military predominance over all-comers. Ultimately however it has turned that this US and British obsession was a strategically not only hugely expensive, however ultimately futile, as it was the wrong prize all along.

Sun Tzu wrote in The Art of War, "Thus it is that in war the victorious strategist only seeks battle after the victory has been won". His countrymen many centuries must have wryly smiled as the USA spend decade after decade fighting to control first the Middle East and more recently also the oil fields of Central Asia. For the strategists in Beijing realised that no matter how much oil you controlled, you cannot build the technology for a guided missile, a pilot-less drone or a modern jet fighter plane without certain rare earth minerals'? Seeing as the Chinese have strategically now secured over 98% of the world supply now who is the boss really? And there were the American strategists thinking that they were being so cleaver wrapping up all the global oil reserves before the Chinese got too powerful.

For China to become powerful (again) was only a matter of time. With a population four times greater than that of the US, it was an inevitability that they would eventually catch up economically, and therefore militarily, after the self flagellation of the Mao era. Ultimately it was always going to be impossible for the USA to stay ahead due to shear weight of numbers.

In fact on paper at least the only trump cards the USA looks like it controls are in military technology and size of economy, which is still per capita still considerably further ahead than China. Even here however all is not as it would seem. For in reality in this modern globalised world, nationality and nationhood mean nothing to the mega-corporations, who will happily move their wealth making assets to wherever they will make the most return. It has been happening for more than a decade already, but the process is accelerating as the 20th century's dominant Western Powers are being slowly asset stripped by the corporations as they seek out more profitable avenues.

Even the cornerstone of US economic dominance, the mighty green-back, is about to have a spectacular fall. It matters not whether one believes the official figures which put U.S. government debt at US$13.5-trillion (60 per cent of current gross domestic product), or whether you believe Boston University economist Laurence Kotlikoff, who writing this week in Finance and Development (a journal of the International Monetary Fund) says that the true figure is closer to US$200-trillion (840 per cent of current GDP). Once the Federal Reserve starts its next Quantitative Easing process (current estimates at $3trillion of "new" money) then the US Dollar's days as world currency will be over. Just as the writing on the wall for Britain's economic pre-eminence appeared when it finally abandoned the Gold Standard in 1931, so the dollars fall from grace is likely to be swift and brutal.

And who owns most of that debt? China. Obviously it is often argued that it would not be in China's best interest for its US debt to be devalued, and in the short term that would be true. But Chinese strategists have not been looking at the short-term.

With an ever weakening economy, and access to the vital rare minerals severely restricted, the USA's ability to maintain its military dominance will quickly become an impossible task. This will result in a potentially rapid withdrawal from"empire" as it closes one foreign military base after another so to save money.

In twenty years time the USA will still be a major military power, just as Great Britain was in 1945, however its days of dominance will be over. The 21st Century will belong to China, and the only thing in question will be whether the USA's continuing fall will be steady and controlled (like Britain's) or rapid and potentially violent (like the USSR in 1990).

Of course between now and then there will be plenty of jostling for position between the two (and their allies and proxies). In the short term the USA will still keep chasing the wrong prize (oil) and Iran, Yemen and Venezuela are hot favourites for some ‘special attention'. Certainly odds have considerably shortened on Yemen, and its large and mainly untapped oil reserves, being next up since this weeks terrorism "scare" - it would also be a lot quicker and easier to have a paper victory over than the other two contenders.

Akin to what happened in the Cold War between the USA and USSR (1946 to 1990), most future conflicts between the two powers will largely be fought by proxy. With the pending referendum it is likely that Sudan could be where the first Chinese / American proxy war will soon commence. It too has (unsurprisingly) considerable, largely untapped oil reserves.

If there is a big (hot) war between the two then chances are it will probably be over in a flash (or cough as it will probably be fought using biological or genetic weapons). In that case, should the spectre of MAD (mutually assured destruction) have failed, then really all this is immaterial anyway, and one would hope that strategists on both sides would have realised that fact.

Away from black gold (and rare minerals) the other potential war triggers between the two will be water and food. Water will cause local/regional wars without doubt in the coming years. This is especially in the Middle East, central/south Asia and Africa, which are all experiencing rapidly falling water-tables, and increasing upstream pollution. In reality however there  is enough technology around to prevent any serious problems for developed nations such as atmospheric water generators and desalination.

Food however could be a much bigger problem, with climate variability, urbanisation and pollution all being rather non-conducive to the ever increasing food production required by a growing world population.

In 1914 if you had told an Englishman than within a generation the British Empire would be gone, the country bankrupted, and militarily only a second string power he would have laughed so hard that his top-hat would have fallen off. Who is laughing now?