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This chapter aims to examine the comparative economic performance of the United States versus China in the digital era. This chapter uses the Threshold Autoregressive (TAR) model method in comparing economic performance. The US economy was shaken quite significantly in 2008 due to the subprime mortgage crisis. On the other hand, China’s economic performance continues to improve. Based on the estimation results of China’s economic performance which continues to increase with faster economic growth than the United States, it is found that China has resistance to shocks from the 1997 crisis, the 2008 subprime mortgage crisis, and the European debt crisis in 2011 and has the potential to compete with the United States as the dominant country in economic terms. China’s economic growth is getting faster and faster since 1979. It indicates that China’s economy can surpass the US economy, which currently owns the largest gross domestic product (GDP) in the world.

The structural perspective on China's prospect of democratization has three variants. The first emphasizes the structural requisites for the survival of the authoritarian state. It argues that the conditions, such as the governing capacity of the state and support from the Chinese people that used to sustain the authoritarian state, have deteriorated significantly and the authoritarian state cannot escape a collapse in the near future (Chang, 2001). The second focuses on the structural requisites for democratization. It holds that the rise of the middle class and the emerging spread of education in China will create favorable conditions for the country to head toward democratization (Gilley, 2004). The third stresses the resilience of China's authoritarian regime. It argues that the rise of democratic polity in Europe resulted from the special social structures of the continent in the feudal period. Since China's social structure in its premodern period was quite different, democracy did not become a solution even after the middle class emerged in China. For the same reason, China's political change will be most likely to move toward rule by law rather than democratization in the future (Pan, 2006).

This paper attempts to critically question present IPE approaches and analyses that aim at assessing China’s role within the international political economy. Thus, unlike common theorizations that see the country as being integrated within US hegemony (Panitch and Gindin) or those accounts that claim that we are already witnessing the “terminal crisis” of US hegemony accompanied by a hegemonic transition toward China (Arrighi), the paper will argue that China was able to gain “relative geopolitical autonomy” as a result of the revolutionary processes it went through and eventually assert itself as a contender state, now just in the process of challenging US hegemony. Dissatisfied with existent theorizations of hegemony, I will be drawing on the critical edition of Gramsci’s Quaderni and attempt to offer a new perspective regarding the conceptualization thereof. Thus applying the elaborated framework of analysis to the current situation, I argue that unlike the US’s ability to counter the challenge of its traditional imperial rivals Germany and Japan as they developed under the grip of US hegemony, the country is facing difficulties in countering China’s ascent. However, while maintaining that China does indeed represent a challenge to US hegemony, particularly in East Asia, I will argue that the idea of a “crisis of US hegemony” is premature as China remains distant from fully realizing hegemonic relations, even at the regional level.