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Chinese Military,Political and Social Superthread

" Worst case scenario, in 10 years Taiwan will be China's Canada: wealthy, nice place, nice people, like to wave their little flags and tell people that they aren't Chinese, but everyone knows that they really are...."

- You said a lot more about Canada here than you did about Taiwan.
Picture of Mel Hurtig on your wall?   ;D

"I blame penises for all the world's troubles."

- Good point.  Eliminate penises, and all the worlds troubles would be over in a generation.  Two, tops.

"Not that we should allow ourselves to be taken advantage of by anyone, in any way.
Not by China, not Russian, not America. Nobody."

- But it's the Canadian way - Canada:   The welcome mat of the Western World.

Tom

 
Edward Campbell said:
Call me, please, when he, or even Pierre Prettycurls goes and talks to whatever remains of the Canada-Taiwan Trade Association, if it still even exists.  There are extensive e.g. technology trade partnerships between Canada and Taiwan, including some involving government agencies like the NRC but the last time I can recall a Minister talking to the Taiwanese was back when John Manley was still Minister of Industry â “ and a lot of water has passed under the bridges since then.

The Canada-Taiwan Trade Association was dominated by caucasian-Canadians wanting to do business in Taiwan: there weren't enough people on the "other side of the table".  It was dissolved and and most of the members joined the (larger and more senior) Taiwan Chamber of Commerce.  Anyway, from where I sit trade with Taiwan is as strong as ever, and I'm sure the statistics support this (although I don't have any at my fingertips).  I don't disagree with the contention that the government might be paying less lip service to political support of Taiwan, but nothwithstanding multi-million dollar "trade mission" boondoggles, free enterprise goes where the (demand and supply) markets dictate.
 
Edward Campbell said:
I said, a couple of pages back, â Å“...Canada, explicitly recognized that Taiwan is a province of China and that reunification is, consequently, an internal matter for the Chinese to settle amongst themselves.â ?

I wonder if this has anything todo with Canadas past issues regarding unification with Quebec, or are we simply
being political and keeping our noses where they belongs?

My sense of the politics here is that everyone likes Taiwan but nobody really cares.  Taiwan is a valued and trusted source of technology and it is a good, albeit small market.  China, on the other hand, looms large on every well paid mind â “ and, generally, favourably, too.  No one, except maybe TorStar, seems to be really upset re: China spying on Falun Gong supporters â “ as someone else pointed out (here?) some people seem to agree that there are some strange, cultish people at the top of Falun Gong â “ maybe the Chinese have cause to worry. I do not detect any deeper anti-Chinese or pro-Taiwan feeling amongst the Conservatives, save that a few (and a few like minded Liberals) have a generic fear of the yellow peril lurking just off-shore.

Generic fear, lol. Indeed, I agree but I laughed at that experssion just the same.
 
I just love the one China policy.  It illustrates the innate cowardice of the great nations of the world, or at least their willingness to abandon their principles if the price is right.  What would the nations of the west have done in the 1950's if the DDR would have declared a "One Germany Policy" whereby we could either recognize our ally (West) or the Soviet puppet (East)?  I think that the list of nations backing West Germany would be a little longer than the ROC claims today.  How quickly we forget that the ROC, whose remaining territory is Tiawan, WAS our ally during WWII against Japanese, and the communists who formed the  Peoples Republic were not.  The nations of the west are fond of wrapping ourselves in the defence of democracy, freedom, and human rights, but largely to justify actions that are to our immediate advantage.  Now don't get me wrong, we often do so to oppose those who truly are dangerous and/or evil, but I find that we are utterly uninterested in threats to democracy, freedom, or human rights where large, well armed, modern nations are involved.  Real politics is necessary, I don't argue that.  I just get a little sick at the transparent hypocrisy involved; but I was only a soldier, not a diplomat.
 
Edward Campbell said:
I said, a couple of pages back, â Å“...Canada, explicitly recognized that Taiwan is a province of China and that reunification is, consequently, an internal matter for the Chinese to settle amongst themselves.â ?

Dare responded:

Is there; from where?  It certainly has not been detected by anyone with a six figure salary in DFAIT nor, as far as I can tell, is it anywhere on the Liberal Party of Canada's agenda.  Even the Toronto Star vacillates lest it shed Chinese-Canadian subscribers.

I'm sure good, honest, hard working, down right decent Canadians are writing letters â “ and then the PM goes and speaks to the Canada China Business Council.  http://www.ccbc.com/ Call me, please, when he, or even Pierre Prettycurls goes and talks to whatever remains of the Canada-Taiwan Trade Association, if it still even exists.  There are extensive e.g. technology trade partnerships between Canada and Taiwan, including some involving government agencies like the NRC but the last time I can recall a Minister talking to the Taiwanese was back when John Manley was still Minister of Industry â “ and a lot of water has passed under the bridges since then.

My sense of the politics here is that everyone likes Taiwan but nobody really cares.  Taiwan is a valued and trusted source of technology and it is a good, albeit small market.  China, on the other hand, looms large on every well paid mind â “ and, generally, favourably, too.  No one, except maybe TorStar, seems to be really upset re: China spying on Falun Gong supporters â “ as someone else pointed out (here?) some people seem to agree that there are some strange, cultish people at the top of Falun Gong â “ maybe the Chinese have cause to worry. I do not detect any deeper anti-Chinese or pro-Taiwan feeling amongst the Conservatives, save that a few (and a few like minded Liberals) have a generic fear of the yellow peril lurking just off-shore.

That's my personal take on it.
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1118867654973_114276854/?hub=Canada
http://www.taipeitimes.com/News/taiwan/archives/2005/03/12/2003245898
http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050616/CHINA16/National/Idx
http://www.duncanmp.com/speeches/c357.html

There are growing movements towards recognition. Certainly not with much official interest in the Liberal government.
 
neuromancer said:
Good links, interesting stuff for sure!
Some of that stuff is pretty old though, like the media buy up, that seems to have happened right after
the Tienimen Square fiasco. The rest though is pretty interesting.

However again, look at the big picture; Even if China is spying they certainly are not the only ones.
I still rather focus on whats happening south of our border first, certainly there are larger and more pressing issues there.

Not that we should allow ourselves to be taken advantage of by anyone, in any way.
Not by China, not Russian, not America. Nobody.
There is no question that they are not the only ones and we must defend against all espionage, but 1000 agents is (I have to emphasize) *alot*. That is a huge operation. And I have a feeling that it's just the tip of the iceberg.
 
Britney Spears said:
Where did you get this?
http://www.iun.edu/~hisdcl/g385_2001/seagrave3.htm
http://www.paulnoll.com/China/Long-March/Long-March-history-01.html

As the above links show, the Chinese communists were supported by the Soviets, and the Chinese nationalists by the US.
 
I see, and so by your reasoning, the USSR was not an ally during WW2 either? Not that it really matters, since during World War 2,  the Eighth Route and new Fourth Armies were nominally under the command of the Nationalists, and received no support from the USSR.
 
Seems to me it's time some enterprising Canadians made a movie about the battle of Kapyong, just to watch the Comrades squirm.  "Canada fought WHO?"

Tom
 
Yes, but the only way it would be made is if it got a grant from the CBC and National Film Board.
 
"Yes, but the only way it would be made is if it got a grant from the CBC and National Film Board."

-Too true.

"It is the absolute right of the state to supervise the formation of public opinion"

â ” Joseph Goebbells


Tom
 
An analysis of why the "Little Tigers" are more likely to come on side with the Western alliance:

http://victorhanson.com/articles/hanson062005.html

Security Threats Warm Our Allies
by Victor Davis Hanson
Tribune Media Services

Japan's prime minister, Junichiro Koizumi, is busy trying to strengthen the American alliance. In recent months, members of his government have announced new joint military arrangements with the U.S. and announced to the South Koreans that, unlike Japan, they are not to be trusted with sensitive American intelligence.

Meanwhile, French President Jacques Chirac and German Chancellor Gerhard Schroeder have been doing just the opposite. They proudly talk up an all-European military force to vie with NATO and insist their stagnant economies will not resort to the American model.

Of course, we saw these markedly different approaches to relations with the U.S. most starkly over the war in Iraq. Japan sent troops immediately, while Germany and France actively opposed American efforts to topple Saddam Hussein.

Japan, however, hasn't always been so warm nor Europe so cool to the U.S., and current global strategic realities largely explain their quite different attitudes to America.

Like the trans-Atlantic relationship, the Japanese-American partnership arose from the ashes of World War II, and in the 1970s and 1980s Japan was every bit as prone to fits of anti-Americanism. Japanese leftists once pushed for withdrawal of American troops. The Japanese right used to lecture us about the superiority of Japan Inc. and brag of a new defiant generation "that could just say no" to U.S. fair trade nagging.

Fury over our bases in Okinawa always seemed to exceed the European inconvenience about U.S. troops in Germany. Japan had far less cultural resonance with the U.S. than did Europe.

Why, then, is Japan suddenly warm while Europe is so cool? Is the Bush administration clumsy in Berlin and adept in Tokyo?

No. Rather, the answer is the rise of China and the collapse of the Soviet Union. For the Japanese government, China and its nuclear protégé, North Korea, are not abstract threats. Indeed, they are within tactical missile range.

If Europeans dream Chinese break-neck capitalism means only lucrative business, the Japanese fear such dynamism will more likely lead to a new bully in their own backyard.

If Japan once had bouts of anti-Americanism when its neighbor China was asleep, Europe was relatively friendly to us when we kept 300 Soviet divisions from its borders.

The moral? Trashing the United States can be a sport for some when one nearby communist enemy disappears but not so for others when another such enemy ascends close by.

Of course, domestic politics, trade issues and clumsy American diplomacy also help fashion the U.S. image abroad. Still, a government's anti-American rhetoric is often predicated on its perceived self-interest.

For all the furor over George Bush's "smoke 'em-out" rhetoric, there are a variety of historical and geographical factors beyond our control that determine the relative popularity of the U.S. abroad.

The small countries Denmark and the Netherlands were invaded twice in the last century by the German Reich. Eastern Europe was swallowed up and nearly ruined by the Russians. These places will thus always be more receptive to the U.S. than a larger and more secure post-Cold War France and Germany.

New Zealand, meanwhile, tucked safely behind a shielding Australia tends to embrace anti-Americanism. If a naked New Zealand faced Communist China, Islamic Indonesia and Malaysia and nuclear North Korea, it might be more receptive to the visits of U.S. warships.

In calmer times, South Korea heralded its "Sunshine" policy of engaging the North. Predictable anti-Americanism followed.

But after a failed appeasement policy, the shocking disclosure of North Korean nuclear capability and some scary rhetoric by Kim Jong-Il, trashing the U.S. fell out of fashion in Seoul. That South Korean about-face was understandable when the U.S. announced it was sending some American soldiers off the Demilitarized Zone and down to Pusan - or home.

Perceptions of the U.S. are also in constant flux. Greece, for example, was once the most anti-American state in Europe, nursing understandable wounds over past U.S. support for creepy dictators in Athens.

But the European Union is no longer a cash cow and still without military muscle - and thus of dubious value in a scrape. At the same time Greece's age-old rival, Turkey, shows disturbing signs of Islamic fundamentalism, conducts provocative flights in the Aegean, and talks tough on Cyprus. Suddenly for the Greeks, the conciliatory and militarily powerful U.S. and its 6th Fleet don't seem so hegemonic after all.

Through all of this vacillating, the American superpower's behavior remains about the same. And despite all the shouting and angry editorials, a nation that is strong, democratic and willing to help does not look too bad.

After Iraq, we think the loud hostility of Germany, France and the Arab autocracies represents a global consensus. It doesn't.

The world changes as we speak. With new economic powerhouses like China and India, universal concerns about terrorism and Muslim fundamentalism and recognition of how weak both the E.U. and the United Nations are in a real pinch, expect easy, fashionable anti-Americanism to recede.

Indeed, it already has. Just ask a warm Japan - and look soon for the same change of mood in a once cool but now increasingly vulnerable and worried Europe.

©2005 Victor Davis Hanson
 
Chinese dragon awakens
By Bill Gertz
THE WASHINGTON TIMES
Published June 26, 2005
Part II: Thefts of U.S. technology boost China's weaponry
   
    Part one of two
   
    China is building its military forces faster than U.S. intelligence and military analysts expected, prompting fears that Beijing will attack Taiwan in the next two years, according to Pentagon officials.

    U.S. defense and intelligence officials say all the signs point in one troubling direction: Beijing then will be forced to go to war with the United States, which has vowed to defend Taiwan against a Chinese attack.

    China's military buildup includes an array of new high-technology weapons, such as warships, submarines, missiles and a maneuverable warhead designed to defeat U.S. missile defenses. Recent intelligence reports also show that China has stepped up military exercises involving amphibious assaults, viewed as another sign that it is preparing for an attack on Taiwan.

    "There's a growing consensus that at some point in the mid-to-late '90s, there was a fundamental shift in the sophistication, breadth and re-sorting of Chinese defense planning," said Richard Lawless, a senior China-policy maker in the Pentagon. "And what we're seeing now is a manifestation of that change in the number of new systems that are being deployed, the sophistication of those systems and the interoperability of the systems."

    China's economy has been growing at a rate of at least 10 percent for each of the past 10 years, providing the country's military with the needed funds for modernization.

    The combination of a vibrant centralized economy, growing military and increasingly fervent nationalism has transformed China into what many defense officials view as a fascist state.

    "We may be seeing in China the first true fascist society on the model of Nazi Germany, where you have this incredible resource base in a commercial economy with strong nationalism, which the military was able to reach into and ramp up incredible production," a senior defense official said.

    For Pentagon officials, alarm bells have been going off for the past two years as China's military began rapidly building and buying new troop- and weapon-carrying ships and submarines.

    The release of an official Chinese government report in December called the situation on the Taiwan Strait "grim" and said the country's military could "crush" Taiwan.

    Earlier this year, Beijing passed an anti-secession law, a unilateral measure that upset the fragile political status quo across the Taiwan Strait. The law gives Chinese leaders a legal basis they previously did not have to conduct a military attack on Taiwan, U.S. officials said.

    The war fears come despite the fact that China is hosting the Olympic Games in 2008 and, therefore, some officials say, would be reluctant to invoke the international condemnation that a military attack on Taiwan would cause.

    Army of the future
    In the past, some defense specialists insisted a Chinese attack on Taiwan would be a "million-man swim" across the Taiwan Strait because of the country's lack of troop-carrying ships.
    "We left the million-man swim behind in about 1998, 1999," the senior Pentagon official said. "And in fact, what people are saying now, whether or not that construct was ever useful, is that it's a moot point, because in just amphibious lift alone, the Chinese are doubling or even quadrupling their capability on an annual basis."
    Asked about a possible Chinese attack on Taiwan, the official put it bluntly: "In the '07-'08 time frame, a capability will be there that a year ago we would have said was very, very unlikely. We now assess that as being very likely to be there."
    Air Force Gen. Paul V. Hester, head of the Pacific Air Forces, said the U.S. military has been watching China's military buildup but has found it difficult to penetrate Beijing's "veil" of secrecy over it.
    While military modernization itself is not a major worry, "what does provide you a pause for interest and concern is the amount of modernization, the kind of modernization and the size of the modernization," he said during a recent breakfast meeting with reporters.
    China is building capabilities such as aerial refueling and airborne warning and control aircraft that can be used for regional defense and long-range power projection, Gen. Hester said.
    It also is developing a maneuverable re-entry vehicle, or MARV, for its nuclear warheads. The weapon is designed to counter U.S. strategic-missile defenses, according to officials who spoke on the condition of anonymity. The warhead would be used on China's new DF-31 long-range missiles and its new submarine missile, the JL-2.
    Work being done on China's weapons and reconnaissance systems will give its military the capability to reach 1,000 miles into the sea, "which gives them the visibility on the movement of not only our airplanes in the air, but also our forces at sea," Gen. Hester said.
    Beijing also has built a new tank for its large armed forces. It is known as the Type 99 and appears similar in design to Germany's Leopard 2 main battle tank. The tank is outfitted with new artillery, anti-aircraft and machine guns, advanced fire-control systems and improved engines.
    The country's air power is growing through the purchase of new fighters from Russia, such as Su-30 fighter-bombers, as well as the development of its own fighter jets, such as the J-10.
    Gen. Hester compared Chinese warplanes with those of the former Soviet Union, which were less capable than their U.S. counterparts, but still very deadly.
    "They have great equipment. The fighters are very technologically advanced, and what we know about them gives us pause for concern against ours," he said.
    Missiles also are a worry.
    "It is their surface-to-air missiles, their [advanced] SAMs and their surface-to-surface missiles, and the precision, more importantly, of those surface-to-surface missiles that provide, obviously, the ability to pinpoint targets that we might have out in the region, or our friends and allies might have," Gen. Hester said.
    The advances give the Chinese military "the ability ... to reach out and touch parts of the United States -- Guam, Hawaii and the mainland of the United States," he said.
    To better deal with possible future conflicts in Asia, the Pentagon is modernizing U.S. military facilities on the Western Pacific island of Guam and planning to move more forces there.
    The Air Force will regularly rotate Air Expeditionary Force units to Guam and also will station the new long-range unmanned aerial vehicle known as Global Hawk on the island, he said.
    It also has stationed B-2 stealth bombers on Guam temporarily and is expected to deploy B-1 bombers there, in addition to the B-52s now deployed there, Gen. Hester said.
   
    Projecting power
    China's rulers have adopted what is known as the "two-island chain" strategy of extending control over large areas of the Pacific, covering inner and outer chains of islands stretching from Japan to Indonesia.
    "Clearly, they are still influenced by this first and second island chain," the intelligence official said.
    The official said China's buildup goes beyond what would be needed to fight a war against Taiwan.
    The conclusion of this official is that China wants a "blue-water" navy capable of projecting power far beyond the two island chains.
    "If you look at the technical capabilities of the weapons platforms that they're fielding, the sea-keeping capabilities, the size, sensors and weapons fit, this capability transcends the baseline that is required to deal with a Taiwan situation militarily," the intelligence official said.
    "So they are positioned then, if [Taiwan is] resolved one way or the other, to really become a regional military power as well."
    The dispatch of a Han-class submarine late last year to waters near Guam, Taiwan and Japan was an indication of the Chinese military's drive to expand its oceangoing capabilities, the officials said. The submarine surfaced in Japanese waters, triggering an emergency deployment of Japan's naval forces.
    Beijing later issued an apology for the incursion, but the political damage was done. Within months, Japan began adopting a tougher political posture toward China in its defense policies and public statements. A recent Japanese government defense report called China a strategic national security concern. It was the first time China was named specifically in a Japanese defense report.
   
    Energy supply a factor
    For China, Taiwan is not the only issue behind the buildup of military forces. Beijing also is facing a major energy shortage that, according to one Pentagon study, could lead it to use military force to seize territory with oil and gas resources.
    The report produced for the Office of Net Assessment, which conducts assessments of future threats, was made public in January and warned that China's need for oil, gas and other energy resources is driving the country toward becoming an expansionist power.
    China "is looking not only to build a blue-water navy to control the sea lanes [from the Middle East], but also to develop undersea mines and missile capabilities to deter the potential disruption of its energy supplies from potential threats, including the U.S. Navy, especially in the case of a conflict with Taiwan," the report said.
    The report said China believes the United States already controls the sea routes from the oil-rich Persian Gulf through the Malacca Strait. Chinese President Hu Jintao has called this strategic vulnerability to disrupted energy supplies Beijing's "Malacca Dilemma."
    To prevent any disruption, China has adopted a "string of pearls" strategy that calls for both offensive and defensive measures stretching along the oil-shipment sea lanes from China's coast to the Middle East.
    The "pearls" include the Chinese-financed seaport being built at Gwadar, on the coast of western Pakistan, and commercial and military efforts to establish bases or diplomatic ties in Bangladesh, Burma, Cambodia, Thailand and disputed islands in the South China Sea.
    The report stated that China's ability to use these pearls for a "credible" military action is not certain.
    Pentagon intelligence officials, however, say the rapid Chinese naval buildup includes the capability to project power to these sea lanes in the future.
    "They are not doing a lot of surface patrols or any other kind of security evolutions that far afield," the intelligence official said. "There's no evidence of [Chinese military basing there] yet, but we do need to keep an eye toward that expansion."
    The report also highlighted the vulnerability of China's oil and gas infrastructure to a crippling U.S. attack.
    "The U.S. military could severely cripple Chinese resistance [during a conflict over Taiwan] by blocking its energy supply, whereas the [People's Liberation Army navy] poses little threat to United States' energy security," it said.
    China views the United States as "a potential threat because of its military superiority, its willingness to disrupt China's energy imports, its perceived encirclement of China and its disposition toward manipulating international politics," the report said.
   
    'Mercantilist measures'
    The report stated that China will resort "to extreme, offensive and mercantilist measures when other strategies fail, to mitigate its vulnerabilities, such as seizing control of energy resources in neighboring states."
    U.S. officials have said two likely targets for China are the Russian Far East, which has vast oil and gas deposits, and Southeast Asia, which also has oil and gas resources.
    Michael Pillsbury, a former Pentagon official and specialist on China's military, said the internal U.S. government debate on the issue and excessive Chinese secrecy about its military buildup "has cost us 10 years to figure out what to do"
    "Everybody is starting to acknowledge the hard facts," Mr. Pillsbury said. "The China military buildup has been accelerating since 1999. As the buildup has gotten worse, China is trying hard to mask it."
    Richard Fisher, vice president of the International Assessment and Strategy Center, said that in 10 years, the Chinese army has shifted from a defensive force to an advanced military soon capable of operations ranging from space warfare to global non-nuclear cruise-missile strikes.
    "Let's all wake up. The post-Cold War peace is over," Mr. Fisher said. "We are now in an arms race with a new superpower whose goal is to contain and overtake the United States."
 
Well, that's one side of the story.  Here's another:

http://english.peopledaily.com.cn/200506/27/eng20050627_192610.html
The Pentagon plays up "China threat theory"

The pentagon's evaluation on China's military spending is "seriously inflated", said a Rand research report on the annual report on the military power of China by US Department of Defence, which will be delivered to the Congress soon. The report said that the play-up of "China military threat" theory on purpose should be rectified.

China's military expenditure suffers repeated "inflation"

On May 19, the Rand Corporation referred a report to the US Air Force entitled "The Modernization of Chinese National Defence: Opportunities and Challenges", which gave an assessment of the future development of Chinese military power. In this report, many senior Rand experts on China affairs believe that Chinese spending on national defence accounts for about 2.3 to 2.8 percent of its GDP. According to latest data Rand has gained, in 2003, the total military expenses of China were between 31-38 billion US dollars.

The figure was already 70 per cent higher than that published by the Chinese government. Yet the Pentagon claimed in its 2003 report that the year's military outlay was as high as 65 billion US dollars, still 71 per cent higher than the highest Rand estimation.

The US Congress passed its National Defence Authorization Act in 2000, requiring the Department of Defence to hand in "report on Chinese military power" to the Congress annually with analysis on China's present and future military strategy. In such reports, the Pentagon has more than once viciously exaggerated Chinese military outlay, spreading "China threat theory." In 2004, Pentagon offered a 54-page report with tens of thousands of words, trying its utmost for exaggeration and instigation. The report asserted luridly that China's military expenditure reached between 50-70 billion US dollars.

Later, a Pentagon spokesman preached that the Chinese army is devoting itself to the modernization drive and developing a capacity to win a partial war under high-tech conditions. Accordingly, the Department of Defence will continue to closely monitor Chinese army's modernization process, "especially that involving Taiwan".

What is the Pentagon up to?

Therewith, on the expenses, the US government does not sit down to make an earnest research on the first-hand data, but instead, indulges in guessing, said James Mulvenon, an expert on international issues and one of the authors of the Rand report. So, the Rand has to correct "many estimations from the US government".

Many international observers pointed out that strong political motives and huge economic interests have been driving the Pentagon to recklessly fabricate "China threat" theory.

First, exaggeration of China's military power can not only exacerbate Congress suspicion and hostility against China, but also dredge for benefits for all US military departments in order to obtain a bigger defence budget. The exaggeration can also enable the US to find a pretext for its opposition to the European Union's lifting of arms embargo on China and for making public opinions in order to enlarge its arms sales to Taiwan.

A long way for developing Chinese military power

The report believes that whether China's economy can maintain a rapid and sustainable growth will be a decisive factor influencing the changes of its defence expenses. As the world second largest economy in many fields, China has enough economic strength to build a modernized powerful army. Experts from the Rand forecast that, despite the prediction that by 2025, the growth rate will be down to 3 per cent from the present 9 per cent, China will by then still retain an economic scale more than three times the present size.

Meanwhile, Rand experts also pointed out that in the next 20 years, the speed and way of the military power growth will be affected and conditioned by many factors, including the reduced scale of cheap labor force, the sharp reduction of bank savings caused by the use of savings due to the aging population, dwindled exports and the decline of industrial output caused by market saturation, financial frailty with high risks and problems existed in agriculture and rural areas.

To sum up, the Rand report believes that although there is a good momentum for the development of the military power, it will not be a smooth path. It is too early to preach "China military threat" theory, as there is a long way to go with heavy responsibilities ahead for Chinese national defence and the army building.

This article is carried on the Global Times, June 24, and is translated by People's Daily Online

Now, you can argue that The People's Daily is just a government controlled propaganda machine â “ as some say about e.g. Fox News, where Bill Gertz (who wrote the piece just above) works as an analyst.

 
A good analysis of free trade with China. For people who think it is the "best hope", it has a lot of potential, but it will still take a long time to turn things around internally. In my opinion, we should be mounting an all out effort to invest in the Indian economy; to provide a counterweight to China, as well as to support a fellow democracy.

As for those who are concerned about outsourcing manufacturing jobs to the third world; unless we get our own act together, the flow of jobs will continue. People want quality products at low prices. (Why do you think the "big three" American car makers can only sell their products with steep discounts and incentives?). Canada's high tax and regulatory environment is certainly an impediment to investing in manufacturing capacity or hiring workers.

The Insanity of Smoot Schumer and Hawley Graham
Their China policy defies economic history.

If a store is selling quality products at low prices, why would anyone want to shut it down? This rhetorical question was asked by economist Arthur Laffer last week in connection to an unprecedented attack on China trade by numerous U.S. senators. In response to the China bashing, the stock market plunged.

How fitting that such a misguided approach to both the economy and national security would come on the 75th anniversary of the infamous Smoot-Hawley tariff bill. According to economist Thomas Sowell, that massive tariff helped trigger the Great Depression, with U.S. unemployment rising from 9 percent in 1930 to 16 percent in 1931 and 25 percent in 1932.

Today, senators Smoot Schumer and Hawley Graham have proposed a 27.5 percent tariff on Chinese imports unless China raises significantly the value of its yuan currency. The senators seem to be angry at a rising bilateral trade deficit resulting from Chinese imports to the U.S. But so what? Free trade only empowers our consumers. In the last couple of years the U.S. has created about 3.5 million new jobs, the unemployment rate is only 5.1 percent, and the nation's GDP is expanding at a 4.5 percent pace. Meanwhile, China's economy continues to climb near a 10 percent rate, with the heretofore impoverished Chinese population slowly but surely entering the modern realm of rising global prosperity.

Schumer and Graham believe that a higher yuan would narrow the trade deficit. But Alan Greenspan completely disagrees. The Fed chairman told a Senate panel that â Å“some observers mistakenly believe that a marked increase in the exchange value of the Chinese renminbi [yuan] relative to the U.S. dollar would significantly increase manufacturing activity and jobs in the United States. ... I am aware of no credible evidence that supports such a conclusion.â ?

More, Art Laffer argues that a stable yuan linked to the dollar has promoted strong economic growth at low inflation for the U.S., China, and the rest of the world. â Å“We have outsourced Alan Greenspan to China,â ? said Laffer, â Å“and that's a good thing for everyone.â ?

Think of the dollar-link as China's gold standard, stabilizing the value of its currency and attracting foreign investment inflows to rebuild its economy. Destabilizing the yuan would be just as disastrous as the so-called Asian contagion of 1997-98 when Robert Rubin and the IMF forced the smaller Asian Tiger economies to de-link from the greenback. That only led to recession in the Pac Rim and intense deflation around the world.

Ironically, since the dollar has been floating freely, the dollar-linked yuan has also floated compared to a market basket of currencies. Between 1995 and 2001 the yuan-dollar appreciated by nearly 50 percent and in recent years has fallen by about 30 percent. Both the U.S. and China adjusted internally to deflation and inflation. But the common link between the two has given the yuan global financial confidence while at the same time giving the U.S. enormous leverage over the Chinese economy. What's wrong with that? We buy their goods and they invest in our country through the purchase of Treasury bonds and more recently through direct investment in large U.S-based corporations (like Maytag and Unocal).

Unlike the sale of defense-related technologies there's no national security problem here. American firms like Anheuser-Busch, the Bank of America, and numerous tech firms are all investing in China. This is free and open trade for the mutual benefit of both nations. Trade and monetary cooperation also provide the basis for national security cooperation, especially in the areas of stopping nuclear proliferation in North Korea and protecting a free Taiwan. (Interpolation; this has yet to be demonstrated)

Clearly China is not perfect, though it has reduced government ownership of the economy from 90 percent twenty years ago to about 30 percent today, according to Laffer. Yes, the communist government in Beijing prevents free elections and free speech, continues to persecute religious groups, and has a record of pirating music and software as well as other intellectual property. But according to a recent study by the Council on Foreign Relations, China has also changed 2,600 legal statutes to comply with World Trade Organization rules.

The freedom to trade and the freedom to choose are central to the economic freedom that's necessary for nations to grow and prosper. Centuries of economic history confirm this, and yet some people seem to want to repeat the worst mistakes of the past. Open trade and currency stability enormously benefit both the U.S. and China and may well lead to improved international relations. Why do senators Smoot Schumer and Hawley Graham want to disrupt the 21st century march to peace and prosperity?

Cutting off your nose to spite your face makes no sense for individuals, nor for nations. Hasn't history taught us that free trade is part of the solution â ” not the problem?

â ” Larry Kudlow, NRO's Economics Editor, is host of CNBC's Kudlow & Company and author of the daily web blog, Kudlow's Money Politic$.
 
http://www.nationalreview.com/kudlow/kudlow200506241442.asp
 
Chinese economic expansion is a worry, in the sense that a resource starved Chinese economy, coupled with the highest ever potential for power projection, leads to fears of another Greater East Asia Co-Prosperity Sphere, which was unacceptable when forged by the Imperial Japanese Navy, and is no more tolerable from Red China.  Ask Tibet how the Chinese respect the sovereignty of their neighbors, when they calculate that they have the ability to take what they desire.  Building up the Indian, Taiwanese and other Asian democratic economies will act to keep those nations aligned with us, rather than China, and serve to counterbalance the growing Chinese economy.  It is not in our long term interest to allow the Chinese to form an economic hegemony in Asia, as economic, political, and military power are far too closely linked in the centralized Chinese authoritative state for such an economic hegemony to lead shortly to nothing less than the fall of a second Iron Curtain, this one over Asia, not Eastern Europe.
      As long as the balance of power is preserved in the east, then China's economic expansion can be directed towards international intergration, rather than regional domination, with its attendant military/political dangers.  Just as with the Japanese in the last century, stopping the Chinese expansion is most easily accomplished in the beginning, tentative forays, and becomes prohibitively expensive if they are allowed enough early successes to throw their whole weight behind it.
 
Chinese economic expansion is a worry, in the sense that a resource starved Chinese economy, coupled with the highest ever potential for power projection, leads to fears of another Greater East Asia Co-Prosperity Sphere

So I presume US and North American enonomies don't need resources to grow, right?  Our standards of living were achieved without the need for any resources and with absolutely no harm to the enviroment?

This is the thing about protectionists that annoy me: It always has to be us versus them, and it's always about me me me, but they've never got the guts to come out and admit it. I see the same idiotic ranting from people who whine about losing their tech jobs to cheaper workers in India. " Don't let them take OUR jobs!"  ::)  Because how can anyone give a job to an Indian when a white man is forced to go back to school and learn a *real* skill, right? God darnit I was born in Canada so I've got a RIGHT to be overpaid and those dirty Indians will just have to go without.

Tell me, what exactly is it about the Chinese and the Indians that makes them undeserving of resources/jobs? 50%(or some ridiculous number) of Americans and Canadians drive their behemoth SUVs 2 blocks to the 7-11 but god help us if those evil Chinese ever get more oil than they need for their little ditty wagon ambulances to get over those dirt roads huh? 

Look, if you're angry and paranoid that the Chinese and Indians might want to raise their standard of living up to 1/4 of yours, because that just means less grease and slightly more expensive gas for you, then come out and say it and you can at least be consistent. Please stop with the silly morality play because I'd like to see you go face to face with a Chinese or Indian man and explain to him why you deserve the jobs and resources more than he does.
 
Britney Spears said:
Please stop with the silly morality play because I'd like to see you go face to face with a Chinese or Indian man and explain to him why you deserve the jobs and resources more than he does.

What a great comment!  :salute:

However I think your overstating something as well. I dont think most people are so very concerned with Mr Chang getting
a higher standard of living and that costing us slightly higher gas prices, as you put it. Instead, I think people
are more worried about CPC gaining so much of an advantage that they use their newly aquired power to
dominate/destroy/do-bad-thing.

I dont begrudge Mr Change buying a new dvd player, good for him. But China as
a world player is a little worrysome. Not because I begrudge anything for China,
no, I just worry because they are gaining power so incredibly quickly!

Internally china must just be a total beehive right now! Im worried
the beehive might turn into a powder keg.

Also, it is a worry because power corrupts, as history proves nicely, and
China is indeed becomeing powerful.

I sincerely think China is occupying a very powerful position right
now, and enless they defeat themselves by bad planning then they definitly
have the potential to move into an even more powerful place in the world
market and global scheme. I just hope they do so with grace and wisdom,
not arrogance and a great big chip on their shoulder.
 
Britney Spears said:
So I presume US and North American enonomies don't need resources to grow, right?   Our standards of living were achieved without the need for any resources and with absolutely no harm to the enviroment?
    Actually, you totally missed the point.  I encourage them to seek those resources through free and open trade.  I oppose quite strongly any moves towards appeasement on our part that would permit them to take these resouces by direct force of arms, or threat of same.  I encourage China to join more fully in the world economy.  I think that the intergration of the growing Chinese economy with that of the rest of the world can only lead to a greater understanding, and a general lessening of tensions on all sides.  That is behind door number one.  Behind door number two, is China determining that they have the force to seize the resources that their growing economy needs, the power to defy and or intimidate the west into non-interference, and tight enough domestic control to pay the cost in blood and treasure to pull it off.  The problem with China choosing door number two is that it is awfully hard to return to door number one, once you've started playing conquistidor, and a whole heck of a lot of people get to die when China guesses wrong about what we will let them get away with.
 
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