The American National Intelligence Agency revealed a report stating that China's GDP will surpass that of the U.S. by 2036. What do you think about the future rivalry between the U.S. and China? In my last book, "War! What Is It Good For?," I tried to illustrate why most likely the next 40 years will be the most important in history because the way the U.S. has been working in the world within the last 30 to 40 years is very much the same way the British Empire had worked at the end of the 19th century and the beginning of the 20th century. The British did not rule the world by any means; they just dominated the international world order and economy.They were taxing the flow of world trade by their financial structures: The world was buying British goods; the British were making the trades, commerce and the money. They tried to use their power to prevent any power from challenging this financial world order. This is very much what the U.S. has been doing since the 1980s. It created its international organizations like the International Monetary Fund, World Bank and World Trade Organization to drive countries to the global market. The world gets more global and buys more American goods. The U.S. does not have the power that ancient empires had. It has economic and military power to dominate the world order and to keep the system up.Now, the U.S. faces the problems that the British Empire faced a century ago. The British were very successful in creating rivalry and protecting the world order to some extent. After some time, Germany and the U.S. made it very difficult for Britain to manage this order. Now, a century later, the U.S. is moving into a similar kind of situation with China. If the present trend continues - the U.S. continues to decline and China continues to rise - it will be harder and more difficult for the U.S. to manage this world order. I think this is a worrisome trend. More countries will integrate the system more actively. Joseph Nye of the Harvard Kennedy School emphasizes the importance of soft power. Cultural impacts are very important. The Western world has been ruling the planet since the Renaissance. It has its own cultural and intellectual dominance that was created within the last 400 to 500 years. Do you think that if, as assumed, China's economic output surpasses U.S. output, this situation will culturally and intellectually create drastic change in the world order? Does it really matter if 1.3 billion people produce more than another 320 million people? Soft power is very important; no one can deny it. But I have not found any example in history of soft power alone bringing a large group of people together. When we look at the stories of the great powers since ancient time, we can easily see that soft power tends to follow hard power. This means, after some time, cultural power is willing to follow military and economic powers. Still, soft power certainly extends beyond the borders.Look at the British Empire. British culture spread all over the world, but it tended to do so after the British hard power took those regions. Look at the Roman or Ottoman empires. They conquered massive areas, and a few centuries later those people who lived around the empires' territories started to behave like them. The most successful and powerful groups tend to become more attractive to people. We see this over and over again in history. Everywhere these empires had been, their cultures tend to have had a huge impact on people.Many years ago, when I was excavating archaeological sites in Greece, people were eating baklava and drinking Turkish coffee.When you say that these are Turkish, they get really upset and say "No! These are Greek!" In the 1300s, the Ottomans had a very small part of Anatolia, but by 1600 the empire extended from Vienna to Yemen and from Morocco to Georgia. If the Ottomans were able to take Vienna in 1529, people at Oxford would be debating more about the Quran, and most likely the Atlantic world would be much more Muslim. We would have had many minarets in Paris and London.So, as we said at the beginning, if this trend continues we will see more Chinese hard and soft power. Actually, within the last few years we have started to see this a little bit. Now, a number of U.S. high schools are teaching Mandarin, and many high schools have dropped teaching French, German, etc. This is a very important sign. The Chinese government has started to set up Confucius Institutes in American big cities and universities. I do not know if they have one here at Harvard, but we just opened one at Stanford. A lot of people in the U.S. have started to find Chinese culture a lot more interesting. My guess is we will see this steady advance of Chinese soft power within the next 30 to 40 years. But more prosperity will "Westernize" the East.Most likely at the end of the 21st century, the question of whether the West or the East rules the world will be a meaningless question because the whole world will become very westernized. The East's soft power will increase in the world, but the East will become culturally westernized at the time it reaches the power to dominate the world. John Mearsheimer says, "China cannot rise peacefully." Do you agree? I do not know. Chinese history gives no clear guidance. We will see. We all would not want this to be true. That does not have to happen either between the U.S. and China or China and Japan. On the other hand, the problem is, historically, when the world gets a big shift in wealth and power balance, it brings with it massive violence, and very often it ends up in a clash. China's military spending has been increasing 16 percent every year since 2006. The rise of the West is the very classic example of this statement. Look at the German-British rivalry or the Ottoman-Habsburg or the Ottoman-Russian rivalries or many others.The cycle has gone in the same way. It seems insane that China and Japan would go to war just because of a few very small islands.In the long run, I guess, America's allies might start to think that their economic partner is China and strategic partner is the U.S.; many governments are already saying this. They might think if we really cannot rely upon American support, then we should choose China as an economic partner and get along with China. If the U.S. panics and does respond aggressively to this rapid shift, then things might get out of control. In the Pacific we might then see a military clash. The shift creates a risky situation. Winning a war might be almost as bad for the U.S. as losing it would be for China. Even a low-level conflict would have horrendous costs. It would be a disaster for the world. If China continues to rise and the U.S. continues to decline, will the U.S. reset its Asia-Pacific strategy? Is the U.S. more willing to collaborate or clash with China? I think after this point the U.S. will be more inclined toward collaboration. Everyone wants to see this in the region. Even in America, many politicians have started to say that China's rise does not have to be bad for the U.S. The problem is that the rapidly changing balance of power is destabilizing everything. The U.S. evaluates what its position should be in the world; they are more worried about this.China lends Americans money to keep buying Chinese goods. It did this within the last 10 years or so by investing its huge current account surplus in U.S. treasury bonds. Buying up hundreds of billions of dollars also helped China to keep its currency cheap, and even made Chinese goods less expensive for Americans. The relationship is rather like a marriage. One spouse does the saving and investing, the other does the spending. In this relationship no one can afford a divorce. If China stopped buying American dollars, the American currency might collapse, and the over $1 trillion that China already held would lose its value.On the other hand, if Americans stopped buying Chinese goods, their living standard would slide and their credit would dry up. An American boycott might throw China into a huge industrial chaos, but China could retaliate by dumping its dollars and ruining the U.S. economy. The U.S. has been trying to cut back its borrowing money, but it has not been so successful so far. Nobody really knows if that current trend can continue to work or not. Can the U.S. continue to borrow Chinese money or can China continue to lend Americans money? No one really has a clear vision about this. This is the risky point for the world economy.But we should also point this out: In terms of American decline and Chinese rise there are many ambiguities. The new manufacturing technologies, the new energy technologies and the shale gas revolution might change the course of history, and the U.S. might continue to keep its leadership position in the world economy. China has its serious social and political risks. All these are possibilities. But, I am pretty sure we will see shifting power from the West to the East in the long run, but it might take longer than these predictions.In terms of per capita income, if China and the U.S. go at the same speed, then China can surpass the U.S. in 2103. In the late 1970s, people were seriously thinking that the U.S. would lose the Cold War against the USSR. But it turned out not to be case; within a decade the USSR had collapsed.These new advantages might change the U.S. position very strongly. Within the next few decades, if the U.S. dominates new technologies, genetics/nanotechnology/robotics/ energy revolutions, this might shift wealth and power westward even more dramatically than the British Industrial Revolution did in the 19th century. How do you see the future of the EU and the EU-Turkey relationship? Until 2008, the EU had been one of the greatest success stories of modern history. For the very first time, many people came together, gave up a lot of their freedoms to form a much bigger, safer and much more prosperous society. No one was really annoyed, while the EU was expanding from the 1950s to the 2000s.In terms of socio-economic prospects, it is an extraordinary achievement, which was built on the ruins of World War II. Although people are complaining about the open labor market and labor forces, further expansion and more integration would be good for everyone. Turkey's integration would be good for the EU. There are a lot of reasons for this. Turkey is a very rapidly growing economy and has a very large and dynamic population. The EU should use this dynamism.I can understand that to absorb Turkey in the union would be very hard. Turkey geopolitically is in a wonderful position. It has links with the Caucasus, Central Asia, the Middle East, the Balkans, the Mediterranean and the Black Sea; it is surrounded by natural gas and oil hubs. The prospects are very positive for Turkish growth. There is also a great potential for Turkey to increase its power in the Islamic world. Turkey has this legacy and heritage in the Middle East and in the Balkans. But I think it would be very difficult for Turkey to become a regional power unless it improves its relations with Israel. A lot of the changes we have seen in the last 20 to 30 years are the beginning of the transition of the post-industrial revolution. Turkey has moved in this period much faster than the rest of the Middle East. This is Turkey's biggest advantage.