ederal Reserve Chairman Alan Greenspan testifies before Congress in February 2003.
  • The failure of the US to effectively combat the Covid-19 crisis has opened the door to China becoming the world's dominant superpower, former Fed chairman Alan Greenspan has said. 
  • The US looks like it has "lost its way" while China is on track to achieve President Xi Jinping's ambition to become a dominant superpower by 2049, Greenspan said in a blog for a wealth management firm.  
  • While the economist said that US will enjoy less dominance this century, he highlighted some reasons that its economy is not entirely replaceable.
  • "For all its problems with populism, America has something precious that China lacks: a stable political regime," Greenspan wrote.
  • Visit Business Insider's homepage for more stories.

The failure of the US to effectively combat the Covid-19 crisis has "worsened" its road to economic recovery and opened the door to China becoming the world's dominant superpower, former Fed chairman Alan Greenspan has said. 

Economic power-play for the upcoming generation will be defined on the basis of the relationship between the US and China, he said in a blog written on Monday for Advisors Capital Management, saying that the Trump administration's shoddy response has opened the door to Chinese dominance.

"The Covid-19 crisis has presented a real threat to the United States' position of global dominance," said Greenspan, who is currently a senior economic advisor to the financial portfolio manager.

Greenspan said that the US economy had "lost its way" at a time when China is enjoying relative success and embracing its ambition to become the dominant world superpower by 2049. 

"China is endeavoring to wrench global hegemony from the United States," he wrote of the Asian power that was the first to see a rebound since the start of the pandemic

"The resurgence of the virus in the US threatens to forestall our economic recovery. And as political tensions heat up between the world's two largest economies, the balance of power that will result is still unclear, but becoming of increasingly greater concern by the day."

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While Greenspan said that the dominance of the US will dwindle this century as China contributes to a growing share of the world's gross domestic product, he said there are some reasons it cannot be entirely replaced.

"America leads in all the industries that are inventing the future, such as artificial intelligence, robotics, driverless cars, and, indeed, finance," he said. "And for all its problems with populism, America has something precious that China lacks: a stable political regime."

He said that problems of poor policy are fixable and can be restored through political will.

President Donald Trump has kept his consistently tough stance on China at front and center of his bid to win November's presidential election.

The Trump administration has pivoted from the US' policy of strategic ambiguity toward the Asian power, to open rivalry over the past few months.

Trump signed an order that demands China-based Bytedance sell its US operations of TikTok, and said he plans to ban the popular viral video app in the US. 

The US shut down the Chinese consulate in Houston, and separately placed sanctions on Chinese officials involved with human rights violations in Hong Kong and Xinjiang.

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