Most of us can’t even fathom the speed that the world is changing. Goldman Sachs predicts that the Chinese economy will match the U.S’ by 2025, doubling by 2050. By this time, the Indian economy will be the same size as the American economy. And these were predictions made before the Global Financial Crisis.

China is a developing country with 1.3 billion people. Its economy has been growing by about 10 per cent per annum for the past three decades. Soon, China will become the most powerful economy in the world. The modern world has never been dominated by a non-Western Country before. It has also never been dominated by a developing country. For the first time, the global hegemony will be non Western and from very different civilisational roots.

There is a common misconception that as countries modernise, they westernise. This simply is not true. This assumes that modernity is just a product of markets, competition, and technology. Modernisation is equally shaped by history and culture. China is very different to the West and this fact is unlikely to change any time soon. This is something that the West struggles to grapple with. Understanding China cannot be done by Western terms, ideas and experiences. This is due to three fundamental and unchanging differences between China and the West.

Number One: The Civilisation-State

Consider this. China cannot really be classified as a nation-state, despite having identified itself as one for decades. The Chinese population has largely always been concentrated in what we now know as Eastern China, from the Han Dynasty 2,000 years ago. This is important because the Chinese identity came not from the nation-state period of the last hundred years, which is what happened in the West, but rather from the period of the civilisational-state. This means that the Chinese identity was moulded by its sense of civilisation, not as a nation-state. China’s ancestral customs, its notion of the family, social relationships like guanzi, Confucian values, are all things that rose from the civilisational-state period and are still very significant today.

China is huge. It is home to over a billion people. It is also very diverse and pluralistic, even decentralised. A place of this scale is not simply managed from Beijing, despite what many outsiders think.

Why does this idea of China as a civilisational state as opposed to a nation-state matter? I think it matters in a number of profound ways. The most significant political value of modern China for unity is the maintenance of the 2,000 year old Chinese civilisation. 2,000 years ago Europe was in in the midst of the breakdown of the Roman Empire. Europe divided, and has remained divided ever since. China during this same period, on the other hand, went through great lengths to hold their huge civilisation together.

Then there is the matter of Hong Kong. In 1997 when Hong Kong was handed over by the British, the Chinese stated that this would mean one country, two systems. This proposition was hardly believed by anyone in the West. Yet sixteen years later, Hong Kong is as politically and economically different to Mainland China as it was in 1997. The West got this wrong because they were thinking in nation-state terms, likely using the memory of Germany in 1990 where the East was consumed by the West. One nation, one system. This is nation-state thinking. In a civilisational-state, this thinking doesn’t work. For China, the response to the question of Hong Kong – as it will be to the question of Taiwan – was one civilisation, many systems.

Number Two: The Notion of Race

Somewhat controversially, China has a vastly different notion of race when compared to most other countries. 90% of Chinese consider themselves part of the same race – the Han. Compare that to the other densely populated countries – the United States, India, Brazil – all consider themselves multi-racial. China is only multi racial in the fringes. This can likely be explained again by the idea of a civilisational state. Their shared 2,000 year old history filled with memories of conquest, occupation, absorption and assimilation, created a process by which the Han emerged, supported by a profound sense of cultural identity.

It can be strongly argued that without the Han, China would never have held together. The Han identity is the glue that binds the country. The flip side is a very weak notion of cultural difference. This has created a very strong sense of superiority, leading to deep levels of disrespect for other ‘others’. This attitude can be observed in the treatment of the Tibetans and the Uyghurs.

Number Three: Nature of State and its relationship to Society

The relationship between state and society in China is not like that in the West. Today in the West, when we think of the state, overwhelmingly, we think of authority and legitimacy as a function of democracy. The issue with this thinking is that, in many ways, the Chinese state enjoys more authority and legitimacy than their Western counterparts. This has nothing to do with democracy, as in conventional terms, China certainly does not exist in a democracy. It is because of the significance placed on the state as the representative, stemming from their civilisation-state roots. As the representative, it is the embodiment and the guardian of the Chinese civilisation. It can almost be imagined in terms of a spiritual role.

Where state power in the West has been continuously contested over the last 1,000 years, the power of the Chinese state has not. This on its own means that the construction of power in China is very different from our Western experience. As a result, the Chinese view the state very differently. Where we in the West view the state as a distant part of our lives, as something that needs to be limited, defined and constrained, the Chinese do not. For the Chinese, the state is intimate,  the head of the family. It’s embedded in society in a way that the West finds difficult to grasp.

This can only mean that we’re dealing with a new kind of paradigm. One that does not fit into any frameworks that we’ve had in the past. While China has always believed in the market and state – Adam Smith, an 18th century writer, famously said “the Chinese market is larger and more developed and more sophisticated than anything in Europe.” Besides the Mao period, this has remained true, but this is combined with a very strong and ubiquitous state. The state is everywhere. Many leading firms are still publicly owned and private ones rely on the state in many ways. The economy is managed by the state. State authority flows everywhere, an example being the one-child policy.

This is the legacy of a very old state tradition, the Great Wall being an example of this. Another is the Grand Canal, completed in the seventh century A.D. The Canal stretched 1,114 miles, linking Beijing with Hangzhou and Shanghai. Here you can see a long history of state infrastructure projects, which is something you can observe today. The Three Gorges Dam – the world’s largest hydropower project – and other  endeavours show contemporary expressions of state aptness in China.

Yet, despite these three fundamental differences, we still believe that we can understand China through the lens of the Western experience. This is why historically our predictions surrounding China have been wrong. I believe it is somewhat arrogant to think that our Western notions are universal measures. It’s also ignorant to refuse to acknowledge the of issue of difference. Paul Cohen, an American historian suggests that the West considers itself as the most cosmopolitan of all cultures. It’s not. In many ways it’s the most insular, because for the last 200 years, the West as not been required to learn about other cultures in meaningful ways because of its dominance. Everyone else has been forced to understand the West. Thus, they are, as a result, far more cosmopolitan than the West.

Consider East Asia: China, Japan, Korea. One third of the world’s population reside there, making it the largest economic region on earth. I am certain that people from East Asia are far more knowledgable about the West than Westerners are about East Asians. This is very relevant. Because, as the Goldman Sach predictions show, the world is being shaped and driven by the developing world. the G20 is hastily surpassing the G7 (or G8). This has significant implications for the future.

First, it means that the West is continuing to lose global influence. This is seen in things like the 2010 global climate change conference in Copenhagen, where Europe was not present at the final negotiating table. This was probably the first time this occurred in over 200 years and will undoubtedly occur in the future. Second, all of this means that the world will inevitably become more and more alien to us here in the West, because it will be shaped by experiences and cultures that do not mirror our own.

For 200 years the world has been dominated by a fragment of the human population, that is America and Europe. The arrival of countries like India and China – over 38% of the global population – and countries like Indonesia and Brazil – will represent the most important act of democratisation in 200 years. Civilisations and cultures, which have largely been ignored in the study of the region’s rise, will demand stronger representation in this world. We must welcome this transformation, and we will have to learn to understand diversity and culture in order to understand the future.