Wednesday, November 09, 2005

Those Diabolical Chinese

During seemingly every military conference in Washington, whether it concerns fighter aircraft, satellites communications, trade policy, or some other topic, some audience member always asks, "What about China?" In other words, those inscrutible Chinese -- god knows what they may be planning (see "US DoD Ponders China Threat").

But some military and public policy analysts, including Michael Krepon of the Henry Stimson Center in Washington, have said the real US vulnerability with China's is its large debt. The US consumer buys products "made in China" all the time, and all the time the Chinese government is buying up US foreign reserves.

Is this a strategic weakness on the part of the US? An economic collapse could certainly be as devastating as a military loss. The US defense budget is not that large a portion of the overall annual budget, but it's not peanuts either. When I hear some military analysts using the threat of China as justification for big-budget programs like counterspace technology, a.k.a "weapons in space" (see "Lost in Space"), I sometimes wonder if, after all, maybe China is as diabolical as some say...

4 Comments:

At 8:37 PM, Blogger Eric Blair said...

If the Chinese 'bankrupt' the US, who are they going to sell their wares to?

Just asking.

 
At 10:51 AM, Blogger TMcKenna said...

The rest of the world, I guess. But whatever the state of the US economy, I assume the US consumer would continue buying Chinese-made goods.

 
At 2:30 AM, Blogger Sandreckoner said...

"TMcKenna said...
The rest of the world, "

Comments like this underscore the -- and I do not say this to be offensive - extreme economic ignorance of far too many people, even those who are otherwise intelligent and well-informed in their own areas of interest.

Though China's exports to other nations will continue to grow, the U.S. is the customer of last resort. The trade *DEFICIT* with China by *ITSELF* is over 10% of the value of China's annual GDP. (And that's just the direct value.) China already produces more than enough to meet demand in virtually every export sector.

There can be no economic collapse of the U.S. without an economic collapse of China. Many other nations would suffer similar fates, but China (and Canada, as a side note) would be particularly devastated.

It doesn't take much to understand why the hyperbole of "China dumping the dollar" (or whatever China-destroys/owns-America's-economy meme you want to buy into) makes no sense, and how China would inevitably suffer more in the longer run than would the U.S. in such scenarios, but that doesn't seem to keep the memes from proliferating.

 
At 9:28 AM, Blogger Michael Puttre said...

Economic considerations in why nations go to war are overrated, mostly due to the influence of economic theory on political science (if I can call it that). I studied political science in college, when there was still a good Cold War brewing, and a lot of my professors, who I respect very much, were steeped in economic interpretations of national security policy. I don't mean that they were wrong, but it explains why economics is often trotted out as reasons why or why not a nation will go to war.

The fact is, nations go to war for myriad reasons, of which economics is only one consideration. Certainly decision makers in China and the US would look hard at the economic impact of a war. But the ability of the victor to influence who has access to the golobal economy and under what conditions might, in the long run, be considered worth the short-term economic damage of a major war.

Plus, there are other motivations such as nationalism, politcs, regional influence, and relative military power that, depending on the current climate, be more important than economics in driving decision makers to cast the dice for war.

 

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