China vs. the U.S.

According to Wikipedia, the U.S. became the world's biggest economy between 1865 and 1913, during which time nonfarm income grew 75%. The twentieth century became "The American Century" as the U.S. used its industrial and exporting might to purchase military superpower status and in turn used that to expand and maintain its global geopolitical influence, its non-empire empire that replaced the colonialism of the great Western European powers.

In 2007, the economy of the EU passed that of the U.S. In 2010, the economy of China passed Japan's to become the world's second biggest. The Chinese are expected to pass the size of the U.S. economy by 2027.

For nearly half a century, the U.S. competed militarily with the Soviet Union, a country with an economy that was never more than a small fraction of the U.S. economy.

The Chinese economic miracle is not self-sufficient. It imports oil and coal to power its economic growth. It imports iron and copper and other commodities to create value added exports. It imports food to feed its massive population. Chinese government officials and businessmen are scurrying around the world, securing land in Africa for mining and agricultural operations, importing oil from Iran and south America and Saudi Arabia and Russia.

The future is likely to be one of intense energy and commodity resource competition between the EU, China and the U.S.

At what point, if ever, will China begin to use its military the way the U.S. has used it - essentially a long history of gunboat diplomacy and economics. The U.S. has no recent experience in competing for military superpower status with an economy larger than its own. How will future U.S. presidents respond to China's growing military and economic power?

 

How will future U.S. presidents respond to China's growing military and economic power?

By cutting taxes, of course. It solves everything.

 

The Bush tax cuts were an unmitigated disaster in terms of deficit spending. Not only do we have to repeal the Bush tax cuts, but we'll have to either increase taxes even more or cut spending or both. No matter what we do it will cause intense political pain, so the short term answer is that we will continue to run huge deficits as long as possible.

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Planning for China's rise as a military superpower isn't going to make it any easier to cut spending.

In my view, Reaganomics and trickle down taxation is the worst thing that happened to the United States in my lifetime. It has killed the middle class and accelerated our status as a debtor nation and undermined our ability to compete globally.

 

Jabba, it is already happening. Check out this article:

The Diplomat

China started out with "core interests" in Taiwan and Tibet. Officials are now extending China's core interests out further, into the South China Sea. And the norms of the American led international system do not apply within them.

 

Just think, if not for a few thousand voters in Ohio in 1976 and Sandra Day O'Connor in 2000, the world would probably be a very different place today.

 

China is trying to be the "good neighbor," and wants a peaceful rise to power. They want to be partners with the United Stayes, and want to regain the respect of the world.

But there is something that could disrupt that: Nationalism/Public Opinion. The CCP knows that it was nationalism that brought down the last dynasty, and put the KMT in power, after the "Century of Humiliation" by the Western powers. It was also nationalism that brought down the KMT, which appeared weak and cowardly to the Japanese during World War II. It was the KMT (the "Nationalists") appearing elitist and out of touch with the Chinese people which gave Mao his opening, resulting in the CCP control over mainland China and the KMT withdrawing to Taiwan. Some generals in the U.S. military actually preferred working with Mao and the CCP over the KMT during World War II, and the U.S. remained neutral to their civil war in the 1940's, it was only the Korean War which turned us against the CCP (and to the KMT on Taiwan). Until Nixon, anyways, and then the rise of Deng's more pragmatic approach after the death of Mao.

On some sensitive issues, the CCP is afraid that the extremely nationalistic public opinion could cause them to lose control. They are afraid of a boiling point on a sensitive issue which would lead to two choices: stay with the public opinion and go to war, or choose the more rational and peaceful course that could lead to them losing control over China completely and bring them to war anyways. That is what the Chinese leaders are afraid of. (And the Chinese government is basically the 9 members of the Politburo Standing Committee.) Is the CCP right, would greater democracy in China lead to a more aggressive China? Who knows, but that is the fear of the people in charge. What are the sensitive issues for the Chinese people? Being treated as subserviant by the United States, JAPAN (still a lot of hate for Japanese war crimes), and Taiwan (both CCP and KMT still hold the position of "One China," a policy the United States has agreed with since Nixon).

If the United States would help China reach an agreement with Taiwan, perhaps a model based on the Hong Kong solution where they keep some autonomy for 50 years, then we would be seen as friends of China and the Taiwan issue would be neutralized. If we can't do that, and the Taiwan issue ever became hot again, then the United States should back off of the Taiwan issue. It just wouldn't be worth it.

But I do not see China and the United States competing with each other over the world's resources like two imperial powers of the 19th Century.

 

They don't need to compete over the resources themselves. If China continues on with extending its core interests, it has the potential to create big problems in its relationship with the U.S. The South China Sea is a pretty important body of water and is an access point for the Straits of Malacca. Do you feel comfortable with it becoming a Chinese lake if their views on trade are in conflict with yours?

Fortunately, I only see such a policy driving smaller neighbors like Vietnam into Washington's orbit.

 

It's not happening now because Chinese growth is still somewhat predicated on acquiring resources so that it can export consumer goods to the U.S. The real competition begins when Chinese consumers want to capture a larger percentage of China's industrial capacity to satisfy demand created by their own rising income levels.

Also, it's not just worry about what China will do, but worry about how the U.S. will react to more of its wealth being captured by China on the one hand and on the other the challenge of a China that can easily afford a military equal to that of the U.S.

The former is more threatening than the latter. Supply constraints and a commodity price explosion helped cause the Great Recession of 2008. In a world of finite commodity and energy resources there may come a time when growth in Chinese incomes only comes at the expense of stagnation and decline of U.S. incomes. And indeed, this has already been the case to some extent. Income has stagnated for most Americans over the last few decades, with only the very richest continuing to get richer as America's ruling and economic elite sold out the middle class and outsourced our industrial capacity to China.

If the Chinese share their growing wealth broadly with each other the way Americans did for much of the 20th century Chinese rulers will get tremendous buy in from the Chinese people for a sense of Chinese Manifest Destiny and Chinese Exceptionalism. Success breeds a sense of entitlement for continued success. The cultural wealth sharing project thus supports the military industrial project aimed at making China a military superpower.

 

Could you elaborate, I'd like to hear your thoughts on this.

 

Well, that's all that separated Ford from a victory in 1976, which would probably have kept Reagan out of office. The climate in 1980 would have been much more favorable for a Democrat, and I don't think Reagaonmics ever happens as a result. Sandra Day O'Connor is the justice that W owes his presidency to, and had she voted the other way, those tax cuts never would have been, and we wouldn't have flushed perhaps two trillion dollars down the drain with multiple invasions and wars.

 

The big difference between the US/USSR relationship and the US/China relationship is that the latter is interdependent. The U.S. depend on China playing bank, and China depends on the U.S. being the big insatiable market that it is. I don't think the relationship will change drastically before Americans cease being able to buy foreign goods, or before China runs out of money.

 

I presume this thread is in response to this news: China Passes Japan as Second-Largest Economy

 

I think this part is pretty puzzeling & telling at the same time. You state that the EU passed the US in economy, but go on about China, and appropriately name your thread 'China vs. the US' which does sort of isolate both actors from a bigger scheme. Just for fun, Brasil, thought about them?

Also, I'm quite bemused at the very 'competitive' title of the thread. Vs. Why?

 

Exactly, we are very interdependent.

If anyone has to worry about China's economic thirst, it should be Russia. And they are cozying up to China.

I don't think we have to worry up China "capturing" our wealth. Most of the products made in China are by foreign companies. One of the reasons why our trade deficit with China has increased over the years is NOT because we are importing more, but because all of the companies we import from used to be spread-out but have now relocated to China. I don't think this is a zero-sum game, where China's income only increases while America's income decreases.

How do you think India fits into all this? China is facing the demographic timebomb of an aging population that's set to hit them around 2030-2040. The Standing Committee of the Politburo knows this, knows that everything will begin to slow down for them at this time, so they plan on achieving whatever goals they have by then.

India, however, will keep growing and is set to surpass China around midcentury.

 

I have to question the sincerity of the "peaceful rise" claim, considering how much China attempts to blackmail and intimidate Taiwan and Tibet. Whenever the Dalai Lama travels abroad, we always hear China complain to Wester leaders, "Omg, you're promoting separatism and interfering with our domestic politics!" when the Dalai Lama has clearly rejected separatism. The "interfering with our domestic politics" part is equally absurd considering that there are no domestic politics and it's the state that wields the sledgehammer over its people. China likes to make up crap about anyone who disagrees with them because negative publicity makes them look bad....except that by doing so they show that they really are bad.

Taiwan and the PRC are the residual remnants of the Chinese Civil War, and it's much more justified to consider them two separate states. Hong Kong originally belonged to China and it was agreed upon that it would be given back. However, Taiwan is a democracy and there's no reason why it should be forced to reintegrate with the mainland if its people don't wish to.

 

It's the Nationalism I was talking about. They have to keep supporting the nationalist sentinment of the Chinese people, if only by empty words, or risk losing control. Tibet and Taiwan ARE mostly the internal concerns of the Chinese, anyways. As for their peaceful rise, the Chinese have tried very hard to help their entire region rise out of povety with them, signing trade agreements and doing other things of good faith with their neighbors. And I don't know what you mean by "there are no domestic politics." How do you think Americans would feel if Texas seceded from the union, and then Russia wanted to recognize their independence and arm them with missiles? They view Taiwan as an internal affair, not an international affair that involves the entire world community.

But the government of Taiwan (the ROC) recognizes "One China." The government of mainland China (the PRC) recognizes "One China." The United States has for decades recognized "One China." A party in Taiwan lost power in 2008 because they looked like they were going to reverse the official "One China" policy.

Yeah, Hong Kong belonged to China over a hundred years before it was finally returned. The British conquered it sometime in the 19th century, eventually handing it off in 1997. The people did not get to decide there, even though it was more British than Chinese in culture and economy by that point. But it does keep a high degree of autonomy until 2047.

Taiwan is far less removed from China than Hong Kong was. Taiwan was ruled by a corrupt dictatorship for decades, eventually becoming a one-party state, and only in the last decade has a second party ever won power (and that period was brief). Many of the Taiwanese would like to rejoin China at some point. So I think the best solution is for the ROC to, with pressure from the USA, negotiate with the PRC to hand control of Taiwan over to them based on the Hong Kong model. Taiwan only hurts U.S. interests, it does not help us, which is why I think we should help make it happen.

 

Except Taiwan was not part of the PRC, and has never been. When the ROC says "One China" they're not referring to letting the PRC take over their island, it's basically the ideological descendant of Chiang Kai-Shek's attempt to take back the mainland right after losing it to the Communists. Taiwan's "One China" refers to taking back the mainland and is very different from the PRC's "One China". Taking back the mainland doesn't sound realistic to me, but that's another matter.

The U.S. observed "One China" because for decades after the civil war, we didn't recognize the PRC and viewed it as being illegitimate. We decided to recognize the PRC under the Nixon Administration as a matter of pragmatism, but that doesn't mean that Taiwan stops being a country.

And as for Tibet, it's not that they're attempting to gain independence, nor is America helping them to do so....in fact the Dalai Lama has ruled out independence in favor of increased autonomy. Rather it's China is putting words in the mouth of Tibetans and claiming that Tibet is trying to declare independence, a claim which is flat-out false.

 

I know what they each respectively mean by their "One China" policy, my point was that they both do not officially recognize the schism. This sounds like silly diplomatic posturing to both of us, but to them it means something, because they both want to save face and keep dignity. Which means it will be much easier for them to reunify than to ever officially recognize the independence of the other.

We were neutral during the Chinese Civil War, slightly preferring Mao as they were better at fighting the Japanese and less corrupt/elitist. The USA only took the side of the KMT/ROC during the Korean War because the CCP/PRC was attempting to please the Soviet Union at the time for their technical/economic support... so they agreed to help the Soviets with North Korea. The Soviet Union and PRC relationship ultimately didn't work out.

And I wasn't saying Taiwan isn't a country, but the United States does not recognize it as one officially.

As for the Tibet issue, yes it is false that the Chinese claim the Dalai Lama wants independence. But as I've been saying, the Chinese people WANT the government to take a harder stance, or else there will be riots or outright rebellion. And that's the worse nightmare for the PRC. The Chinese people are very nationalist, the CCP views itself as holding back One Billion people who are sick of their "century of humiliation" and want China to reclaim its pride and rightful place. The Chinese military is especially nationalist, and a rebellion of the military would be the worst possible scenario. So the CCP occassionally speaks empty words to please their base. Not unlike most politicians in the United States.

 

True, it isn't really "our" wealth, but I think it is more of a zero-sum game than most people believe because of fundamental resource constraints. We got a clear look at a world of commodity supply constraints right before the recession hit. Fundamental supply constraints in all sorts of commodities drove those prices through the roof, and that was one of the root causes of the Great Recession. China's economic growth over the next decades depends on a massive increase in energy supplies which in turn will depend on massive increases in oil and coal imports. More than any other factor, energy is wealth. The U.S. was the world's dominant energy consumer until last year, when China took the top spot. As China eats up a larger percentage of global energy resources, that demand can only be satisfied at the expense of U.S. per capita energy consumption unless the coal and oil supply can be expanded or alternative energy can be ramped up quickly enough to compensate.

But don't forget that the U.S. population is growing, so U.S. energy demand will have to grow as well to maintain per capita consumption levels. I do not believe the world's energy supply can grow quickly enough to prevent China and the U.S. from becoming increasingly combative over those resources.

 

If China becomes extremely competitive over energy resources, Americans will not be the ones worrying. That would be Russia, with its immense territory and fossil fuels just sitting to the north of China. Or the former Soviet republics in Central Asia, which would again be Russia's problem. That's probably why Russia is cuddling up to China now.

China's population is going to plateau soon, and its aging population will actually be greater than its working population in just a couple decades. How do you figure their demographic timebomb in?

Also, what of India?

 

Last I heard, the Taiwanese leaned more in favor of independence and that the only thing holding them back from doing so is China's threats. Taiwan was recently out on a shopping spree for modern weapons, and wanted coastal defense submarines and the latest model F-16's....and it was the U.S. that rejected the sale, not Taiwan who was a reluctant customer. Even if Taiwanese wanted to reunite with the mainland, it's important that they do so out of their own free will and not at gunpoint.

Oh good, another mass demagogue movement. So, what....our governments should just play an elaborate charade to trick our respective xenophobes and keep them sedated?

 

There are a lot of conflicting reports about Taiwan, depending on the source, and it is hard to get down to the truth. Many favor the status quo. After the prime minister of Taiwan threatened independence, he was thrown out of office by the Taiwanese people in a national referendum against the PM's party in 2008. They still favor the status quo by plurality in the short-term, IIRC, but long-term they do see and approve of eventually returning to China.

I doubt the Chinese will ever force Taiwan to join them at gunpoint. It's just a cold war rivalry, a neverending arms race, where to stop the arms race would be seen as weakness. Another reason why I think we should diplomatically interfere to bring about resolution that satisfies both sides.

But I do think if it ever escalated to the point of: (1) go to war with China, or suffer irreparable harm in the Sino-American relationship; or (2) stop arming/defending Taiwan; then I would go with #2. It's extremely unlikely we'll ever reach a decision point like that, but I was saying the Taiwan issue remains a thorn in the side of Sino-American relations and it would be best if the United States tried to negotiate a deal between them. Ultimately, it will be in Taiwan's best interest to rejoin China, especially as the PRC gradually reforms to become a more open and democratic society.

And I wasn't justifying how the CCP handles the Dalai Lama and Tibet situation, which I do disagree with, I was just explaining their reasoning.

 

If I'm not mistaken, the reason they favor the status quo is because they're being held at gunpoint. Take away the gun and they'll probably favor independence.

And I would go with #2 over #1....we have a law that explicitly says we're going to defend Taiwan, and if CNN starts reporting a Chinese amphibious assault on Taiwan I'm sure we'd have enough public opinion to back it up.

If China does become a more democratic society then perhaps reunification might happen, but even then that would take decades for the PRC to make democratic reforms, then probably a few more decades for Taiwan to decide to reunify, if at all.

 

If China doesn't become more self-sustaining and relies too much on finite resources and fossil fuels, it's great rise will not last very long.

Militarily it certainly has superior numbers in terms of troops, but I'm not sure it would ever have superior military technology. Throwing millions of troops at a problem doesn't guarantee victory against superior weapons.

China is also Communist and needs to become more democratic. It's human rights issues are numerous and it seems very keen to suppress its people's freedoms in many ways.

 

Autocratic, yes; communist less so.