2004 August 29 Sunday
China Becoming Biggest Economic Player In East Asia

China is becoming the biggest trader in Asia.

American military supremacy remains unquestioned, regional officials say. But the United States appears to be on the losing side of trade patterns. China is now South Korea's biggest trade partner, and two years ago Japan's imports from China surpassed those from the United States. Current trends show China is likely to top American trade with Southeast Asia in just a few years.

I'm sure those regional officials all know that American military supremacy is predicated upon American economic supremacy and that the days of America's role as largest economy in the world will likely end by mid 21st century at the latest.

The ability of the US to use economic power is in decline in Asia. China has more than neutralized the effects of US trade sanctions on Myanmar (a.k.a. Burma).

China has in fact capsized Washington's policy with its own trade deals, which far outweigh the value of the American penalties. The State Department estimates that Myanmar lost about $200 million in the first year of the ban on imports to the United States. At the same time, it said, trade between China and Myanmar amounted to about $1 billion in 2003.

The Chinese expect to increase trade with Myanmar to $1.5 billion by 2005. As China's economy continues to grow its trade with many countries is going to become integer multiples of US trade with those same countries. US economic influence is going to decline as a result.

The United States has peaked as a world power. The US economy will continue to grow. But continued more rapid economic growth in East and South Asia is going to cause the US economy to shrink as a fraction of the total world economy. At some point China's economy is probably going to become larger than the US economy. This means that not only will the US continue to become a relatively less important trading partner but China's economy is going to become so large that China will be able to afford to outspend the United States on military equipment.

Barring some major cataclysmic event such as a Chinese civil war or natural disaster there seems no way for Taiwan to maintain its independence unless it develops nuclear weapons. The Taiwanese would be wise to go nuclear now before China can credibly threaten to launch an attack aross the straits.

There are many things that the United States ought to be doing about the rise of China. The essential insight that ought to drive decision making by US policy makers is the knowledge that the US is going to become relatively less powerful in the future. We ought to ask ourselves what we could do now to better position ourselves once the US is not the undisputed strongest military power in the world.

Energy policy is a key area where we ought to be responding to the rise of China to find ways to prevent our national interests from being as deeply harmed by our loss of influence. We are going to become less influential in the Middle East. This is one of many reasons we should seek to develop technologies that obsolesce oil. If oil becomes obsolesced then we will have less at stake in the Middle East and our interests will be less harmed by the growing influence of a competing power. See my previous posts Saudi Arabia, Terrorism, Democracy Promotion, And Energy Policy, China Energy Consumption Growth Complicates Anti-Terrorist Efforts, and Luft And Korin On China's Rising Demand For Oil And Saudi Arabia.

Share |      By Randall Parker at 2004 August 29 04:24 PM  Politics Grand Strategy

Kurt said at August 29, 2004 6:07 PM:

The Chinese are investing heavily in the newly discovered oil and gas fields in Bolivia, Ecuador, and Peru. I believe they are building a natural gas pipeline from Boliva, across the Andies, to LNG tanker ports on the Pacific side. They are also building much of the telecommunications infrastructure in Latin America as well.

There are something like 20 nuclear power plants being built in China and Cheney recently visited China to pitch Westinghouse's version of the integral fast reactor.

There are more Chinese researchers presenting papers at the annual "cold fusion" conference, ICCF. The Chinese are looking into new energy technologies themselves (fusion, ZPE, etc.).

I am selling thin film analytical instruments into China (www.metatechnica.com). If America follows the "creaping socialism" to become more like Europe, I will probably be living somewhere in Asia in another 5 years.

If the West is to maintain its lead over Asia for the longterm, the first thing is we have to dump this whole PC Left ideology that has contaminated our culture over the last 30 years. The next step is to get rid of these idiot political causes that exist on both the left and the right (stuff like animal-rights activism and anti-abortion activism) that contribute nothing to economic growth and technological development of the West. Once we get rid of this kind of BS, we can start to grow again.

Invisible Scientist said at August 29, 2004 8:09 PM:

I would like to comment that the latest Westinghouse reactors are still water cooled
systems, and they are not exactly the Integral Fast Reactor decribed in the web pages below:
However, the latest Westinghouse designs constitute a dramatic improvement for uranium fuel efficiency,
and they do have the capability to burn most of the long term waste, leaving behind mostly short term
waste (300 years of half-life), even though they don't come close to the incredible potential of the IFR,
which can yield as much as 1,000 % uranium fuel efficiency. Even without the IFR, the potential for nuclear
reactors is enormous.

Derek Copold said at August 30, 2004 8:10 AM:

China is going to become a regional power whether we like it or not. Save for the Chinese self-destructing, It's impossible to stop. The best we can do is pull back and turn defense responsibilities over to those with the greatest incentive in limiting Chinese power: Taiwan, Russia, Japan, Korea, Vietnam and other Asian countries. Our presence in the area only acts to dilute the threat's salience and keeps the littoral nations divided.

gene berman said at September 6, 2004 10:22 AM:

Second to Kurt's, BTW. Correctly perceiving that military power is an outgrowth of economic might (rather than the reverse, which is widespred
throughout the left and part of the right), there's less to worry about China than meets the now-oriented eye. Economic well-being militates
impressively against expansionism or imperialism. If anything, China's interest s a true world partner would be for something similar to that
currently animating our own policy: a regime of global peacefulness and conflict resolution by other than violent means..

I'd add that China's far from "there" yet and has many internal struggles and contradictions with which to deal. I don't want to argue the matter or to make predictions but I wouldn't want to put important money on the long-term survival of a government committed to both socialism and capitalism simultaneously. At the best, they'd be emulating most of the rest of the world's somewhat crippled systems--and we're still way ahead in the sense of being less crippled than the rest.

Even were China to turn expansionist, it's most likely that their ambitions would be most focused on the illusion of autarky within defensible borders, along the lines of the Germans in WW I & II or the Japanese "Greater sian Co=Prosperity Sphere." With all that former-USSR relatively
empty space lying about, I don't think Americans need worry about any invasion just yet. On the other hand, if we catch any glimpses of military
involvement in other portions of the Western Hemisphere, as for instance, mnifested as a protection of tarde relations, the Monroe Doctrine might need to be dusted off and retested.

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