The year is 2040. China and the United States dominate the world landscape, forming an uneasy and not entirely stable partnership, bound together by ties of mutual benefit. China’s economy is the largest in the world, having grown at a higher rate for the last two decades. With that influence has come a greater role in global security. The United States has stabilized at a lower growth rate and has refocused its global role around its critical priorities in the Middle East and the Americas. Both nations depend on the other as their largest trading partner.

But more important than any individual country are the new multilateral institutions that provide a supranational framework. Around the world, various nation-states regularly find themselves physically and financially incapable of withstanding the acts of terrorism, financial crises, and natural disasters that periodically engulf them. It is this increased level of risk that has given rise to newly empowered organizations.

While the United Nations remains the world’s premier talking shop, institutions affiliated with it play an increasingly important role in the conduct of global affairs. The International Reserve acts as a global stabilization fund and also as a regulator and certifying agency for the world’s financial exchange. The Asia-Pacific Treaty Organization, including the United States, has taken over a security role in Asia, complementing an expanded NATO agenda in Europe, Africa, and the Middle East. The International Criminal Court has become the judicial body of last resort and is also the global community’s investigating arm—the “sharp edge of the sword” in the defense of human rights. The World Health Organization has acquired global quarantine authority supported by local enforcement arms; this change was instituted after the outbreak of a second virulent biological plague in 2020. Meanwhile, as charitable giving outweighs official development aid by an order of magnitude, nongovernmental organizations (NGOs) play an increasingly prominent role in developing countries.

As its economic dominance wanes, the United States has reluctantly become a principal beneficiary of these multilateral institutions. Indeed, it depended on them as it weathered multiple financial crises requiring ever-greater levels of coordinated global intervention to restore economic stability. Domestic economic priorities continue to drive policy. Health care costs now amount to 25 percent of GDP, and marginal tax rates are approaching 50 percent. Immigration has slowed to a trickle, but population growth continues to be robust at 1 percent per annum. US schools have maintained their global preeminence, particularly in biotechnology. Terrorist incidents of both domestic and foreign origin have become more common. Yet US military expenditures have declined from their peak in 2010. The nation’s military bases are now concentrated in Asia and the Middle East in order to defend the nation’s still-critical oil pipelines.

As the world’s largest economy, China has become banker of last resort to the world. It is by far the largest holder of US government debt. The RenEurDol (or Red, for short)—a new international currency made up of the freely floated renminbi, the US dollar, and the Euro—has been established as the world’s reserve currency. No economic crisis anywhere can be resolved without the approval and participation of China. China leads the world in energy, electronics, and material science technologies. It continues to be a manufacturing powerhouse, but its factories now churn out high-tech gear designed by graduates of Chinese universities. Over 50 percent of the Fortune (now renamed Caijing) 500 are based in China.

China’s population, which peaked at about 1.5 billion in the year 2030, is starting to decline even as immigration is picking up. Electoral democracy has come to China, though the Communist Party maintains its leading role in society, holding most of the seats in the National People’s Congress and most local government jobs. The Chinese population’s migration from the countryside to the cities peaked at around 70 percent. China is now effectively made up of ten major economic clusters, each of which shares common infrastructure but possesses heterogeneous cultural tastes. The Chinese have cleaned up their cities, but they now face soaring health care costs—their cancer, obesity, and stroke rates have skyrocketed due to a more sedentary lifestyle as well as the high levels of pollution that were present early in the century.

Elsewhere in the region, India rivals China for influence in South Asia, particularly over access to gas reserves, which are now critical to both countries’ energy requirements, though both also depend on hydro, nuclear, wind, and solar energy sources. India has emerged as a major infrastructure investor in its own right and, while not a major exporter, it has succeeded in building an industrial base largely able to meet its own requirements. India maintains its global reputation as a service-oriented economy, and the Bollywood film industry is now many times the size of Hollywood in both value and productivity. A late wave of urbanization beginning in the 2010s has created a thriving urban economy around a new set of Indian cities.

Japan continues to age rapidly, and its capital surplus is largely consumed domestically as it turns increasingly inward both economically and culturally. The Middle East is now aligned around a group of trading regimes headquartered in the Gulf States, the natural resources boom having definitively ended during the 2020s. Africa is finally emerging. A fully urbanized South Africa has taken up regional leadership in the southern part of the continent, while Egypt, Algeria, and Morocco provide centers of commerce and funding in the north. The only region that stubbornly persists in underdevelopment is South America, where local ruling elites have successfully entrenched themselves and blocked productivity-oriented development priorities.

For its part, Europe remains relatively prosperous but has continued to suffer from immigration-related social tensions and rising costs given its aging population. Russia is now fully economically integrated into Europe and depends on capital flows from the continent to support its own even more rapidly aging population. Eastern Europe has become the new technology hub of the continent, with major scientific and educational institutions that rival those of the United States. Thanks to climate change, the economy is driven by wind and nuclear power, under constant refinement by the region’s R&D labs. In southern Europe, emer-gency medical teams have taken up permanent residence fighting periodic outbreaks of various tropical diseases brought on by climate change.

While military skirmishes take place from time to time, mostly due to conflicts over natural resources such as oil and water, the world has settled into a sometimes tense stasis. China and the United States defend their critical interests directly, but defer to multilateral institutions to do most of the fighting and intervention. The established relationship between the two nations is generally supportive, as both have a mutual interest in defending a global market–based economy. No player has yet emerged to challenge China and the United States directly, but neither can either power exert unilateral power in the way that the United States and the United Kingdom held global sway in the past. A new and special relationship now rules the waves.

Back to top