China a Threat?

Discussion in 'Economics' started by ShoeshineBoy, Dec 14, 2005.

  1. Great thread on how China is not necessarily the threat that we think it is:

    False anxieties fueling new China syndrome

    Dec. 14, 2005 12:00 AM

    The United States is full of anxieties about the rise of China.

    Some fear that China will somehow use the large amount of U.S. government debt it holds for malefic purposes.

    Fears about China as a rapidly growing economic force are rampant in this country.

    Secretary of Defense Donald Rumsfeld has publicly fretted about China's large military buildup given that, at least according to Rumsfeld, it faces no security threats.

    During the 2000 campaign, then-candidate George W. Bush derided the strategic engagement policy of the Clinton administration. Instead, Bush asserted, his administration would treat China as what it is, a "strategic competitor."

    That sort of language has been dropped by the administration, but it doesn't really seem to have an alternative strategy to guide U.S. interaction with China. During his recent visit to Asia, Bush made his customary freedom and democracy lecture about China, but from the safe shores of Japan. While actually in China, Bush had uncharacteristically little to say.

    Most of these anxieties are misplaced or exaggerated.

    China has a grossly underdeveloped financial system. It needs a safe place to park reserves and there isn't anything much more secure than U.S. government debt. This would be a strategic concern only if no one else was willing to loan the federal government the money. Persistent low interest rates indicate that isn't the case.

    China certainly has a fast-growing economy, having averaged about 9 percent annual growth in its Gross Domestic Product for the past two and a half decades. But it is still far from overtaking or even reaching parity with the U.S. economy.

    Currently, China's GDP is less than one-seventh that of the United States. Its GDP per capita is barely above $1,000, compared with more than $37,000 in the United States.

    Even if China continues its current pace of growth it would only have an economy about a quarter the size of the United States' by 2025. China's ambition is to have per capita GDP in just the $3,000 range by mid-century.

    To get even that far, China must overcome some fairly significant obstacles. Right now, China's economic growth is largely export-driven. To truly develop the domestic economy will require extensive liberalization and the establishment of a non-political rule of law. Right now, China ranks very low on the Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal.

    Because of its population control measures, China also has a developing demographic problem of an aging population that makes the aging issue in the United States look like a cakewalk.

    More importantly, however, China should not be viewed as an economic competitor. Companies compete against each other. In a free global economy, countries provide markets for each other.

    Much is made of the growing trade deficit with China. U.S. exports to China, however, have increased by 284 percent over the past decade. Moreover, Chinese imports have made a meaningful contribution to keeping inflation under control in this country.

    China is rapidly building up its military, increasing expenditures at an estimated 11 percent a year over the past decade. But even the Pentagon's highest estimate only has China's military spending at about a fifth that of the United States.

    Contrary to Rumsfeld's fret, the United States fully understands the need to have a military capable not only of dealing with existing threats but strong enough to deter potential ones as well. By the Pentagon's own assessment, China does not yet have the military capability to protect its own extensive coastline, much less the shipping lanes on which its economy depends.

    China has territorial disputes with its neighbors, but the only one that concerns the United States is Taiwan. Yet, over the long haul, the fact that Taiwan is the largest source of foreign investment in China is likely to serve as more of a deterrent to precipitous Chinese military action than the dwindling credibility of U.S. intervention.

    None of this is to say that the United States should embrace China's rise. It is led by an authoritarian regime from which we should keep our distance. But it is not, realistically appraised, a threat, economically or militarily.

    In fact, Bush's uncharacteristic relative silence while in China is a sound diplomatic approach to U.S. relations with that country. As was something Bush did while there: He attended a church service. Bush didn't say much afterward, but it highlighted the suppression of religion in that still benighted country.

    Sometimes the eloquence of a simple act says more, and is more effective, than the often futile posturing of diplomacy and military power.

    Reach Robb at or (602) 444-8472. His column appears Sundays, Wednesdays and Fridays.
  2. I think this guy needs to check his math. China GDP is 61.8% of US GDP as per CIA 2004 est.
  3. JMHO
    In an imperfect world when you become rich you need to protect your wealth.
    If you don't look after yourself how can you expect others to look after you?
    America has become the richest and has the most powerful military there is.
    Can anyone expect China to do otherwise? Does anyone know what is the meaning of the Great 'Long' Wall?
  4. "Some fear that China will somehow use the large amount of U.S. government debt it holds for malefic purposes."

    print away baby, they do this all the time in the third world countries.
  5. Cheese


    China is a threat .. economically and militarily. And push come to shove those mothers have no rules. There is no tradition of 'rule of law'.

    The answer: don't panic.
    The US is master of the known universe for the moment.
    And the longer term answer: get into bed with the Russians. They are frisking in the new glories of capitalism. We are talking the European/Caucasian family here. It is going to take a while for all politicians to get this into their heads.

    No longer is it MAD with the Ruski's.
    Its the new big word: MASS .. Mutually Assured Survival and Success.
  6. I have never feared China because I have never met a chinese person that I did not like. Their leaders may be wackos at times like a lot of other countries but I believe the average chinese is no threat and hopefully they will win out in the end.
  7. Is that the last Game?

    Does it play on Sony, xbox or nintendo?

  8. This is a lot of rubbish.
    I bet lots of people thought Japan and the Asian countries were threats in the 1980s 1990s(respectively)
    BTW, I think more countries think the US is a threat :D.
  9. Retired


    China is a threat if you're a Japanese and you know your countrymen have massacred millions of innocent Chinese without paying a price.

    Like the Jews, the Chinese will not forget. When they become powerful, they will get their revenge on Japan. Just wait and see.

    Japan: either face up to history, or piss in your pants!

  10. Harakiri would be more honorable.
    #10     Dec 26, 2005