1. Is China a global partner or strategic rival of U.S.?
By Tom Evans, CNN, November 3, 2009 2:38 p.m. EST
- China today, say many analysts, is in a comparable position to U.S. at the beginning of the 20th century… an emerging power that the dominant global power of the time is trying to downplay. Then it was Great Britain vs. the United States. Now it is the United States vs. China.
- China’s rapid economic expansion continues to outpace growth in the United States, 8.9 percent in the last quarter versus 3.5 percent in the United States giving Beijing huge economic leverage.
- China is on the brink of overtaking Japan as the world’s second biggest economy and could overtake by some estimates (PricewaterhouseCoopers) the U.S. economy in overall size (though not GDP a head) by 2025 and be 130 percent bigger than the U.S. economy by 2050
- China is the world’s biggest exporter, recording a trade surplus in the last 12 months of $250B. The United States is the world’s biggest importer, with a trade deficit of $575B over the last year. By one reckoning, one in every eight dollars of the U.S. trade deficit is due to just one company, Wal-Mart, which is the biggest single importer of Chinese goods into the U.S.
- China is the world’s largest creditor nation, holding as much as $2 trillion in U.S. dollar denominated assets. The United States is the world’s largest debtor nation. Some say that gives Beijing huge leverage over the U.S. economy. either by giving it the ability to abruptly sell its U.S. assets which could cause the dollar to plunge on the global foreign exchanges (note the U.S. did this to Britain during the Suez crisis in 1956 forcing Anglo-French forces to withdraw from Egypt) or by enabling Chinese companies to buy huge swathes of the U.S. economy (witness Chinese efforts to profit from the wreckage of the U.S. auto industry).
- China’s breathtaking economic expansion has led to a voracious demand for raw materials around the world and the rapid expansion of China’s presence in countries as far apart as Venezuela.. Sudan.. Guinea.. and Myanmar. Human rights groups say China is propping up repressive regimes in order to secure its access to critically important raw materials, including much sought after “rare earth” minerals which are a key component in consumer electronics such as cell phones.
- China is also a strong influence in the economies of some solidly Western countries that have huge mineral resources, such as Australia which is a big exporter of iron ore (and which is growing rapidly on the back of China’s economic expansion) and to some extent even Canada which has valuable oil shale and other raw materials.
- A huge flood of cheap Chinese manufactured goods and textiles is swamping the global economy, destroying traditional manufacturing jobs in Europe and North America, leading to increasing demands for protectionism in Western economies amid charges the Beijing government is subsidizing its own industries, protecting businesses with trade barriers, and keeping the Chinese currency artificially low, which depresses the price of Chinese exports in the global market place and makes them even more competitive. Cheap Chinese goods are also swamping Beijing’s trading partners among emerging nations, snuffing out local efforts to grow their own manufacturing industries and break away from resource dependent economies.
- Critics say China is reinforcing its offensive to achieve global economic dominance by establishing large industrial (and military) spy networks in Western countries (the U.S. regularly arrests and convicts Chinese spies) and using hackers to break into Western companies’ computer networks to steal sensitive information. Even the Russians are reportedly accusing the Chinese of stealing technology and using reverse engineering techniques to build a new generation of fighter planes.
- China is already the dominant economic and political player in the economies of South East and North East Asia, in a way that reminds some of Japan’s efforts to create a Greater East Asia Co-Prosperity Sphere before the Second World War to shut out U.S. influence. Beijing is a strong supporter of a proposed Asian “European Union” that critics say would cement Chinese dominance in Asia.
- China has already become a key global power, directly involved in major international disputes such as the showdowns with North Korea and Iran, and using its position on the U.N. Security Council and its economic leverage to influence events in countries regarded as areas of vital Chinese importance. It is also now the dominant regional player in north east Asia, recently hosting a summit in Beijing with the Japanese and South Korean leaders.
- China is growing more confident about using its rising power in border disputes with countries in its immediate vicinity… from the fight over an ill-defined border with India in the Himalayas.. to territorial disputes over island chains in the Pacific with Asian neighbors such as Vietnam, Japan, and the Philippines.. to being more aggressive at challenging U.S. warships sailing in international waters off the Chinese coast (China says its suzerainty extends 200 miles to the edge of its exclusive economic zone, not 12 miles as recognized by other countries). China in the past has never backed away from border wars.. note the war in Korea in 1950-53, the war with India in 1962, and the war with Vietnam in 1979.
- Beijing is engaging in a massive military modernization program, designed to reduce the number of soldiers in its army while expanding its ability to project power by air and by sea. China is reportedly building its first aircraft carrier and is developing ballistic missiles that are designed to target the decks of U.S. aircraft carriers, the principal means by which the United States exerts military influence in the Asia — Pacific region (as witnessed by past American efforts to influence Chinese behavior in the Taiwan Strait). Taiwan says China now has 1,500 missiles targeting its territory, an increase from 800 two years ago.
- China is building port facilities in countries such as Myanmar, Sri Lanka, and Pakistan all of which to its rivals look like an attempt to pave the way for a major growth in Chinese naval capabilities in the Western Pacific and the Indian Ocean in a way that not only challenges U.S. naval power but also the national security of India which has now embarked on its own naval buildup. Australia is also paying attention to China’s military modernization, announcing plans to double the size of its submarine force from 6 boats to 12 with much longer ranges.
- China remains a totalitarian one party state, dedicated to preserving the Communist Party’s grip on power while allowing no alternative political centers of power, suppressing political dissent (think back to Tiananmen Square 20 years ago when China smashed pro-democracy protests even as the Soviet Union collapsed), and crushing separatist movements on its own territory in such places as Tibet and Xinjiang.