US vs EU vs China 

Does the US still maintain global hegemony? The rash of trade conflicts, hand in hand with geopolitical challenges, the decline of the Western dominance both politically and economically, have cast doubt on who is really leading the world economy.

The world is neither unipolar, multipolar, nor chaotic it is all three at the same time

Joseph S. Nye, Jr.,

The Future of Power (2011)

“In a dark room you move with tiny steps. You don’t run but you do move.”

Mario Draghi

President of the ECB, Mar 7, 2019

The emergence of a new world order?

When we talk about leadership, we also talk about rivalry and 2018 was undoubtedly a particularly emblematic year of rivalries, especially between the United States and China, and to some extent, between the United States and Europe. Power, leadership and domination are three different concepts that can be expressed in many ways. Interestingly, to understand the tug-of-war, we are compelled to focus on both power and leadership from two different perspectives: country and currency.

The most pressing concern for emerging economies is how quickly the US-China TradeWar is going to be resolved.

Carmen Reinhart

Former Senior Policy Advisor and Deputy Director at the IMF


“The market has overestimated the slowdown in the US. We are going to have a little bit of a slowdown, particularly in the 2nd quarter, but US consumers remain in a very, very good shape.”

Ken Taubes

CIO of US Investment Management 

at Amundi Pioneer


Will China and Europe compete with the US as the world’s leading power?

Power is a multifaceted concept. Hard power has usually two components; economic and military forces. The soft power of a country comes primarily from three sources: its culture (when it is attractive to others), its political values such as democracy and human rights (when it lives up to them), and its policies (when they are seen as legitimate). Smart power is the combination of the two, and is usually considered as the optimal way to use power.

On those grounds, the US is by far the country with the strongest hard power. Indicators such as GDP, Development index, banks, corporates and brands value, military forces explicitly highlight the strength of the US. Europe needs to push integration further to be perceived as a more credible contender. Conversely, EU countries are usually considered as the strongest soft power (UK, France, Germany) while the US are deemed to have declined in this respect.

Trump is testing us. China is testing us. Russia is testing us. My fear, if the UK leaves, is that the EU is perceived as more fragile, like the last standing vegetarian in a world of carnivores.

Sigmar Gabriel

Former Minister for Foreign Affairs, Germany 2017-18


“We don’t see inflation expectations as de-anchored, at least we don’t see the same situation as in 2016.”

Natacha Valla

Deputy Director-General of

Monetary Policy, ECB


Unsurprisingly, China appears as the major opponent of the US, the country gaining ground year after year much quicker than any other “emerging” country. The gap with the US is gradually receding, and China is undeniably the future rival of the US. 

Will the US dollar cease to be the “unique” international currency?  

While the euro is already an international currency, competing with the USD in some areas. It is nevertheless more a regional currency than a real international one and still has leeway to progress should EU accept a consolidation of the Euro area institutional, economic and governance set-ups. On the other hand, it is evident that the journey to an international currency for the Yuan is still quite long and complex whether economically, financially or politically.

President Xi is facing a slowing economy, more than what the official numbers suggest.

Carmen Reinhart

Former Senior Policy Advisor and Deputy Director at the IMF


“Are central bankers lost? 100% yes.”

Janet L. Yellen

Chair – Board of Governors –

Federal Reserve System (2014–2018)


Hence, the lessons from the past are quite clear for the Chinese currency. Before becoming an international currency, some prerequisites such as capital market liberalisation, capital account openness, capital controls abandoned, full convertibility of the currency, etc… are to be met.

Where are we heading? 

Ultimately, the shift in global power might mean a shift in global governance. Hard power and soft power (and the combination of the two, smart power) show that the US still represent a hegemonic power, while some powers emerge gradually.

The balance of power is shifting across the world, creating a new geopolitics; new global powers have emerged.”

Dinesh Kumar Khara

Managing Director, State Bank of India


“Climate Change should be part of our mandate of central bankers, not only for financial stability reasons…”

François Villeroy de Galhau

Governor Banque de France


In terms of GDP, China will not be the unique contestant in the race to outstrip the US. With an average annual growth at 7%, world GDP would double every decade. In other words it is quite sure that the world economy will more than double by 2050, should we exclude a major and global catastrophe or a full trade war, which is not our scenario.

Power is no more in the hands of one country and we already live in a multipolar world. With China, other countries emerge in some characteristics of power. Now would be a very good time for Europe to push integration further to be perceived as a block.

Review the discussion threads and main highlights from the Amundi World Investment Forum 2019 edition on