We are seeing the dawn of a new era in the world, as the United States is wasting its men, money, and credit rating fighting useless wars that in the end will eventually come back to haunt it. The Chinese are wisely using their growing economic clout to get what she wants. The big thing that’s happening now vis-à-vis China is the EU planned lifting of the military sanctions which were placed post-1989. Let’s just review the facts:

UK Foreign Secretary Jack Straw has said that the EU embargo on arms exports to China is likely to be lifted in the next six months despite US objections.
---------------------------------------
In December 2004, the EU pledged to work towards lifting the ban but said it was not ready to do so yet. The EU's move was welcomed at the time by Beijing, which described the embargo as "product of the Cold War".
--------------------------------------
Washington is thought to fear that lifting the ban would lead to a buying spree for sophisticated arms that could be used by China to threaten its diplomatic rival Taiwan.
http://www.timesoftibet.com/articles/194/1/EU-China-arms-ban-&%2339%3Bto-be-lifted&%2339%3B


Washington’s fears are not for Taiwan but for her own degrading position in East Asia. America albeit the world’s most powerful nation is losing its grip on that power. China which within the next decade will take over the US economy has the world’s largest, and soon after should be the world’s premier trading nation (last year Chinese trade for the first time exceeded $1 trillion, and grew at a alarming 37%), and possibly the world’s largest creditor post-2020, that would put China as the world’s premier power. America in contrast is the world’s largest debtor (a superpower is never one with net debt), a weakening dollar (so much so that the Euro is being really considered as the new reserve currency), an overstretched military, and a government/population who is funded by overseas savers, the US consumes 80% of the world’s savings, that is unsustainable. With the pretty much inevitable America depression within my lifetime China would by that time hopefully be big enough to absorb some of the impact of a disastrous American collapse (the ownership society isn’t working America). Meanwhile the EU has her problems to be sure; a population whose median age by 2050 will be 53 years old! A slow growing economy, if not lethargic at that, but it is the world’s largest investor, the world’s strongest currency, and close to the technological standards of the United States. But apart from the economic consequences of the Bush team, we go to the Chinese growth in her military prowess. This article from a truly great source is telling us exactly what China is doing…she is punching below her weight:

In order to achieve its goals, Beijing will have to edge Washington out of Asia by incorporating Taiwan and rendering Washington's security guarantees for Japan and South Korea less credible. Beijing's strategy puts Washington on the defensive with the expectation that, as time goes on, the balance of power will shift inexorably in Beijing's favor.
-------------------------------------
China is what historian John Gittings calls a "status-quo power that often punches below its weight in international politics." That is a realistic position for a power to take that expects its situation to improve over time, as it builds up its economy and military to full potential. For the moment, Beijing's interests are best served by adopting a "defensive" posture and a foreign policy geared to promoting stability.

Which oh so very true, China is modernizing at a rate never seen before in human history. It took the US 100 years to do what China did in 30. China is growing not only in size and scope, but in depth. The Chinese are manoeuvring in Asia to become the regions sole legitimate power, as China once was. China imo see’s itself as the origin of the Oriental culture, and way of life and will seek to increase its power over the region. But unlike the United States, China will do it subtely. She is already Japan, Taiwan, South Korea, and increasingly Russia, India, and Latin America’s new best trading partner. The US is losing ground badly against the Chinese, the best example is how China’s power is fundamentally changing Latin America, the Chinese promised what the US can’t…$100 billion in actual investment. Brazil and China are working together to de-monopolize the US’ power over the region, but this is only part of the tactic:

Washington's National Security Strategy, for example, is conditioned by the goal of a unipolar configuration in which the U.S. is the arbiter of globalization by virtue of unchallengeable military power. In contrast, major regional powers -- China, the Franco-German combine, Russia, Brazil and India – desire a multipolar world in which the U.S. is decentered and becomes a North American regional power with global reach. The regional powers adopt multipolarity because it gives each one of them advantages over the U.S. The great struggle of the first two decades of the 21st century will be over which of the two configurations gains ascendancy and how power will be distributed in the configuration that triumphs.

Indeed, as US unipolar power degrades in real terms, the rest of the world will begin to seriously catch up. Wars like Iraq will become increasingly more difficult for the US because the powers that be will have a much stronger hand against the indebted American economy. The UN should also gain in importance because it will begin to serve the interests of all states, because only the UN can really give one the legitimacy needed to do things (if you don’t believe me, look at Iraq today, the UN was right). China will be up there with the US and the EU determining the future of the world, and increasingly will surpass both.

Successfully completing the revolution in military affairs is the single most important requisite of Beijing's geostrategy because only then would it be able to displace Washington. Neoconservative strategists in the Pentagon understand this; it is the basis of their judgment that Washington has a shrinking window of opportunity to retain a significant foothold in East and Southeast Asia.

Which is why the EU getting rid of the sanctions presents such a challenge to the United States. As I said earlier “Washington’s fears are not for Taiwan but for her own degrading position in East Asia.” The US is losing ground against the Chinese because the Chinese are able to afford to buy weaponry from almost any nation now, weaponry like the Rafale jet fighter which I believe she may buy for her carrier forces, and hi-tech European radars, and other sensors which imo would be fitted on Chinese and Russian built ships to bombers. Already Russia has agreed to sell China the deadly TU-22M bombers, which was designed to destroy American battle groups. China is quickly catching up to the US, although she wouldn’t win in a global war, she could win in the Taiwan Straits.

The Taiwan issue poses difficulties for Washington and Beijing. Washington offers security to Taipei because Taiwan is its most important foothold in East Asia. Were China to unify, Washington's presence in the region would be significantly diminished. Yet Washington needs to maintain its economic relations with Beijing to protect American investments and understands that Beijing has limits with regard to Taiwan, which means that Washington must support the "one China" policy and try to check moves towards independence in Taipei.

Indeed one of China’s weakness’ is the “island carrier” as it is known from Japan to the Philippines which the has US monopolized, that is a natural impediment to China’s geo-political growth. Should Taiwan re-unify with China, China would have broken that chain, and would have access to the Pacific, and the Taiwanese economy which is worth $500 billion, once China gets Taiwan it’s a bonafide world power.

The growing strategic relationship between Moscow and Beijing represents a shift in the world balance of power that works to Beijing's advantage by pulling Moscow closer to its sphere of influence and away from the West… If their strategic relationship continues to deepen, Moscow and Beijing will have a greater chance of edging Washington out of Central Asia by solidifying the Shanghai Cooperation Organization. The more pressure exerted on Washington from "all sides," the freer Beijing will be to move in East Asia.

Only Russia, Japan, and India pose any real threat to China from her borders. With the exception of Japan, India and Russia seem to gravitating towards a tripartite alliance which corners in Central Asia which now has an abundance of oil, and Natural Gas. Also Iran could join in that alliance, completely alienating the United States in the region, Sino-Russo trade is growing, and Russia always hungry for a market is sure to follow.

Source: http://www.pinr.com/report.php?ac=view_report&report_id=253&language_id=1

The EU caving in says so much more then we presume, it is an affirmation that China has made it. Now that the EU is China’s largest trading partner, China and the EU understand that together they may be able to increasingly alienate the United States, China gets Asia, the EU gets Europe. These nations aren’t trying to destroy the US, but rather degrade its already degrading power. The Bush administration has given China and the EU the moral weight in the world’s eyes to do their bidding, as the US is idiotically fighting wars it cannot win, behind the scenes the seeds and being sown for a new world order. That’s why ladies and gents Bush’s clamouring of “freedom” don’t mean much, except to Americans.

China is playing the game very wisely...
If you check "www.sinodefence.com" you ll see also their military capabilities.
I am just waiting and wonder when this "peaceful rising" of China"is going to end and they will invade Taiwan.
They are very smart not to have problems with the EU. Both sides are happy for now and get what they want from each other..

Oh I'm quite stupid...rising not raising...sorry.

Actually Chriac's speech in Beijing tells us everything
"France and China share a common vision of the world, a multipolar world"
So, EU doesn't want a strong America anymore :eek:

The EU never wanted a strong America, especially France who has been at the head of the EU in terms of international policy. France has been at the forefront also of getting this arms embargo lifted against the Chinese, why? Because France stands the most to benefit with the Chinese. Firstly the French and Chinese have already had joint military exercises, the Chinese have bought one of France’s bug corporations Thompson, China is bound to buy large amounts of French military hardware, especially I suspect the Rafale for China’s carriers, and China has the same geo-political interest as France. While the US is dreaming about “freedom” and all that nonsense, the French are playing real politick and wining at that.

"China which within the next decade will take over the US economy has the world’s largest, and soon after should be the world’s premier trading nation", Undecided

Your ever rosy picture of China and its burgeoning economic might never mentions the potentially disasterous problems this nation faces.....

http://www.atimes.com/atimes/China/FD16Ad03.html

"China pumps in $4 for $1 of annual output
Another looming problem is that, despite a potential 1.3-billion-consumer market, hard-to-get data reveal surplus accumulation in some manufactured goods. Unchecked overinvestment could easily fuel deflation down the line. If that's not enough, China's growth quality is questionable, and may be unsustainable. Incremental capital-output ratio numbers show China has been pumping more money to generate the same growth. To generate an additional $1 of annual output, China now pumps in $4, compared with $2-$3 in the 1980s and 1990s. Last year, fixed capital spending accounted for a whopping 47 percent of GDP. That's worrying."

"A recent report in the 21st Century Business Herald, a Chinese newspaper, says local governments could have accumulated debts exceeding 1 trillion yuan ($120.9 billion). The situation is just as dire on the level of non-performing loans in the state-banking sector. Estimates put the state-run commercial banks needing at least 2 trillion yuan to bail them out of insolvency."

"China's banking sector faces a crunching financial crisis, which Beijing has been desperate to hide. These problems are set to worsen Beijing's fiscal position, though. It is already lumbered with a swollen budget deficit of its own, with public debt at 30 percent of GDP, and climbing fast. Now it may be forced to take on more of China's growing debt problems from other sectors."

Some statistics quote as much as 50% of the loans Chinese banks have given may be unrecoverable. You speak of American debt, yet China's only remedy may be its continued hope of attracting more foreign currency. Just like past Asian tigers, China may have an economic breakdown based on debt, as well.

China also continues to have a monumental problem with corruption...

http://www.washingtonpost.com/wp-dyn/articles/A4412-2004Dec16.html

"Corruption among government and party officials has been cited as a major reason for dissatisfaction among China's 1.3 billion people as the country moves from socialism toward a market economy."

"In the report, auditors listed steps they have taken this year to recover $3.5 billion in government funds that they said were supposed to be turned over to the national treasury as part of the 2003 budget but remained illicitly with state-owned enterprises and other public concerns. About $2.5 billion of these funds have been recuperated, but about $1 billion is still unaccounted for, they said. There was no word on how much was missing from the $300 billion 2004 budget, the subject of audits currently underway. "

We are talking about BILLIONS missing here....

http://www.asianresearch.org/articles/1830.html

"The Chinese Communist Party has issued an ambitious six-point plan for tackling rampant official corruption in its ranks in 2004, but a former high-ranking Party official says its efforts are doomed to failure without political reform, RFA's Mandarin service reports."

"Where do the roots of China's corruption problem lie? With the single party system, with the fact that there is no democracy," Bao Tong, former Party Central Committee member, told RFA."

"The official People's Daily newspaper estimated recently that U.S. $30 billion a year disappears from state coffers in China through the actions of fraudulent officials. Another estimate by a Chinese scholar put the amount at U.S.$157 billion over the past three years."

The Chinese government, which must crush civil rights in order to maintain power, is beginning to lose control over its country. A major point, Undecided, that you refuse to make is that the Chinese government may well be the largest obstacle in the path of the nations prosperity. The Chinese government will never let go enough to give up power, and its billion poor farmers are just waiting for a small economic decline in order to revolt. This is the history of China, and it is inevitable to repeat itself without a huge political reform.

China has always been an unstable nation always on the verge of revolution, I think the clock here may be ticking....

Finally the biggest problem China may have is with its water supply..

http://www.rics.org.uk/Environmentalandlandconsultancy/Environmentalmanagement/Environmentalconservation/yellow_river.htm

http://www.clo2.com/reading/waternews/China_water_crisis.html

The yellow river is drying up, and a water shortage may be inevitable in the future due to both pollution and poor water management. This is a little stated catastrophe that may become realized in the next few decades. Robert Kaplan, an avid traveler and writer, makes detailed notes of this problem in many of his books.

China's future may not be a rosy as one may think....

oh, yea, finally the red giant awakes, if what undecided said is correct then by 2020 we will have a communist superpower, its almost w00tworthy

"oh, yea, finally the red giant awakes, if what undecided said is correct then by 2020 we will have a communist superpower, its almost w00tworthy", Vslayer

I am glad that you are so ecstatic about the idea of communistic government that runs over its own people with tanks. If the population continues to become wealthier, however, you will most likely see a change of politics (with a revolution or not) that would resemble something like capitalist U.S.

the United States is wasting its men, money, and credit rating fighting useless wars that in the end will eventually come back to haunt it. The Chinese are wisely using their growing economic clout to get what she wants. The big thing that’s happening now vis-à-vis China is the EU planned lifting of the military sanctions which were placed post-1989. .

What is happening here with China in regard to the EU and America is this . Since the EU is now under one currency its consumer market is now 500+ million people twice that of the US . The EU acting as one economy can absorb a lot more from China than the USA can , so in China's eyes the EU is vastly more important than America . With this extra economic leveredge the EU can ignore the American policy of containing China and will export weapons to China . China only has the economic ability to become a Pacific power which is a threat too America not the EU .

We are seeing the dawn of a new era in the world

Yes you are and that era is the economic ascendancy of The European Union into the centre of Global Finance . What you are seeing my good freind undecided is Americas economic funeral .

I think that much of what we see in China as so miraculous is due to the fact that she is the only long-surviving continuous civilization on this planet. Using the generous standards one can use when comparing it to Rome, Egypt, Persia, etc., China has had one continuous government for about 6,000 years. There's something to be said for continuity. China works and the people who comprise it know that. All that's required to keep it working is the patience to allow some trifle like a barbarian invasion or the imposition of a preposterous economic model to sort itself out over multiple generations, and China always emerges relatively unscathed. "This too shall pass" must be their national motto.

While the US is dreaming about “freedom” and all that nonsense, the French are playing real politick and wining at that.While I agree the US does dream about freedom (whatever that means).

Your notion: all that nonsense, really takes the wind out of an otherwise decent piece. I would be more than willing to bet that within 50 years if the communists ruling China don’t give up their power and grant the Chinese citizens the same basic rights as most Western countries - there'll be another revolution.

I think we can agree history says that the good-times only role along for so long and dictatorial regimes result in revolutions. The US doesn’t have the oldest constitution still in use because “freedom and all that nonsense” is nonsense. Sure Chinese are willing to work 20h/d now because they think their going to be given control over their destiny in the future and if that isn’t the case – then they’ll take. When the economy is going good - sure everyone is happy. But, the Chinese economy is not going to keep growing at this pace for 50 years - there will come a crunch time, as there always is. That's when it becomes interesting.

Vslayer and undecided remind me of those people in that shitty movie independence day who get on the roof of that sckyscraper with their signs excitedly welcoming the aliens, only to be blown to smithereens.

I almost hope they get what they wish for, just so they can feel stupid when they're the property of cruel mongol overlords.

Undecided:

Nice post.

Overdose:
China is playing the game very wisely...
If you check "www.sinodefence.com" you ll see also their military capabilities.
I am just waiting and wonder when this "peaceful rising" of China"is going to end and they will invade Taiwan.
They are very smart not to have problems with the EU. Both sides are happy for now and get what they want from each other..

Idunno.
China, with its booming economy and its break-neck consumerism, is a dot.com

I’ve never seen anything like it- you have, I hear, factories that used to make buttons or t-shirts transforming themselves into car manufacturers.
Think about it- people that used to make buttons, now making cars because of demand.
A bit too much, no?

I admire the Chinese for not being plagued by the European-like need to be ‘correct’ and accepted, but I say in a few years we’ll be seeing a meltdown.

You simply cannot grow so quickly and expect stability. You explode.

Gendanken,

You simply cannot grow so quickly and expect stability. You explode.

And consider also that China's number one resource at present is people power. Eventually their one-child policy will drastically curtail that resource.

I used to work in a warehouse that received all sorts of products from China. The boss went to visit the factories a few times and came back to tell us of how the shipping containers were loaded and moved.
By hand.
People would transport boxes miles on their backs. On their bicycles. In cars. In trucks. However they could get it there. Picture the Ho Chi Minh trail and you wouldn't be far wrong.
And she also told stories of how shippin containers were moved sometimes. Not with a truck. But with long ropes and hundreds of people.

People power.

I think that much of what we see in China as so miraculous is due to the fact that she is the only long-surviving continuous civilization on this planet.

It isn't the same China of days gone by any more than England today is the same England of the Celts or Saxons or Normans or Romans. The government changed, the culture changed, and the language changed. It may have done so a little bit slower, but only because it was delayed at spear point.

Towards…let’s explore:

Your ever rosy picture of China and its burgeoning economic might never mentions the potentially disasterous problems this nation faces.....

I’m worried about the erosion of China’s environment then anything else, now about the debt situation:

Some statistics quote as much as 50% of the loans Chinese banks have given may be unrecoverable. You speak of American debt, yet China's only remedy may be its continued hope of attracting more foreign currency. Just like past Asian tigers, China may have an economic breakdown based on debt, as well.

Every month China gets $10 billion in her coffers from trade, in September 2004 according to the latest issue of the economist China has $514 billion…you heard me billion dollars worth ready for any scenario, and that is increasing at a alarming rate (which could cause inflation), the United States has total foreign debt in excess of $3 trillion, China has $200 billion worth of foreign debt…alas China’s assets outnumber China’s foreign liabilities, considering that China’s economy is already 64% that of the American…that is a feat to be sure. China has no problem with attracting investment and currencies, if I were to add Greater China’s wealth this is the picture:

Chinese FDI inward Stock

2000:$348.3 billion
2003: $501.5 billion

Chinese exports:

2000: 249.2 billion
2003: 436.1 billion
2004: 593 billion
net increase btwn 2003-2004: 156.9 billion

Chinese FOREX:

2000: 168.2 billion
2003: 412.7 billion
2004: 514.5 billion

Greater Chinese GDP PPP:

2000: 5,074,820,000,000
2003: 7,199,700,000,000
2004: 7,811,000,000,000
2006: 9,100,000,000,000
2007: 12,400,000,000,000
2025: 25,155,000,000,000

United States:

2000: 9,963,000,000,000
2003: 10,990,000,000,000
2004: 11,330,690,000,000
2006: 12,231,536,508,450
2007: 13,700,000,000,000
2025: 18,881,000,000,000

Guess who is the United States’ biggest creditor?

China also continues to have a monumental problem with corruption...

It’s still a third world nation…remember the United States post-civil war was also a extremely corrupt nation, in tandem with its massive industrialization, wealth does that. China will go through a recession eventually so it should to curb investment, but this is not a unique Chinese experience.

The Chinese government, which must crush civil rights in order to maintain power, is beginning to lose control over its country.

Frankly Chinese today have more freedom then at any other time in Chinese history, as hard that is to believe. I was watching a CBC documentary on the new China, and people are pretty much allowed to what they want except criticizing the government, 0therwise you can do a lot more today then in 1989. China has changed as well, and is now allowing private property, and some reform.

A major point, Undecided, that you refuse to make is that the Chinese government may well be the largest obstacle in the path of the nations prosperity.

Where did I ever say it wasn’t? When you find that quote then we may discuss…don’t put words in my mouth thank you.

The Chinese government will never let go enough to give up power, and its billion poor farmers are just waiting for a small economic decline in order to revolt. This is the history of China, and it is inevitable to repeat itself without a huge political reform.

Chinese farmers incomes are increasing, and now that more and more people are leaving for the cities that means less competition for land and resources, alas we have the same scenario that we had in the United States when she was industrializing, a more productive agricultural sector with less labour. I do fear greatly the income inequality in China, that is becoming a problem and one that one should not take lightly…but as is the United States and her 3rd worldesqe income inequality.

China has always been an unstable nation always on the verge of revolution, I think the clock here may be ticking....

Make sure you have a piece of toilet paper when ur done…we don’t want a mess.

The yellow river is drying up, and a water shortage may be inevitable in the future due to both pollution and poor water management. This is a little stated catastrophe that may become realized in the next few decades. Robert Kaplan, an avid traveler and writer, makes detailed notes of this problem in many of his books.

I agree that is China’s single greatest problem…one that cannot be resolved easily.

China's future may not be a rosy as one may think

No but I’d say its better then the American future.

Vslayer and undecided remind me of those people in that shitty movie independence day who get on the roof of that sckyscraper with their signs excitedly welcoming the aliens, only to be blown to smithereens.

And you remind me of a typical American who can't write properly...

I almost hope they get what they wish for, just so they can feel stupid when they're the property of cruel mongol overlords

No I won't feel stupid...I think you should feel stupid for accepting tax cuts that will make u slaves to Chinese capital...last laugh is on me mein friend... :D

It isn't the same China of days gone by any more than England today is the same England of the Celts or Saxons or Normans or Romans. The government changed, the culture changed, and the language changed. It may have done so a little bit slower, but only because it was delayed at spear point.And my point is precisely that indeed it is the same China.

England is a perfect example, it made a quantum jump (and not necessarily in a forward direction) with every invasion. The language and culture of the original Celtic Britons are lost, only shards of them survive in Wales, Cornwall, and Brittany. When the Romans left and the Saxon colonists became the rulers, Latin was forgotten along with most of Roman culture, except within the walls of the monasteries. Only the Norman invasion followed a path similar to the "takeovers" of China. After a few centuries the Normans forsook their French tongue and began speaking (a heavily modified) English. The England of today has no continuity with either the gene pool or the culture of the Britons, any more than today's Arab Egyptians have any continuity with the Cushites of the Pharaonic Era, or the dominant culture in North America has any substantive links to the Na-Dene and Athabascan people.

The Chinese, on the other hand, speak and write a language that evolved steadily from the language of their ancients. Their traditions followed a similar course. Every band of foreign marauders that "conquered" China was ultimately swallowed up and assimilated. Admittedly they contributed something to the culture (although virtually nothing to the loanword-hostile Chinese language) but they paid a heavy price. No band of Mongols has ever regained the stature of Genghis Khan, and China swallowed not only the Manchu people but even their native land, Manchuria.

"China has $200 billion worth of foreign debt…alas China’s assets outnumber China’s foreign liabilities", Undecided

China's accounting has been way off, and it is surely hiding reality. As my previous article stated, local governments alone have 129 billion dollars worth of debt. Billions more are in bad loans, and those loans continue to be given at a generously vigorous pace to ensure the economy keeps growing and growing. Double that for the bad loans, which include 260 billion at this point, and then add the foreign debt. The loans will continue to add in order to fuel the economy. This is a repeat of the scenario that caused other asia tigers to fall. It is that foreign currency that continues to keep the economy going, especially from the U.S. What happens when that foreign currency can no longer drive that economy?


"Greater Chinese GDP PPP:

2000: 5,074,820,000,000
2003: 7,199,700,000,000
2004: 7,811,000,000,000
2006: 9,100,000,000,000
2007: 12,400,000,000,000
2025: 25,155,000,000,000"

So between 2003 and 2004, Chinese GDP grew by about 8.5%. Then you expect it to grow by another 62% in three years? Are you serious? Secondly, since you forsee the fall of the U.S. economy, what resources and money will continue to finance this huge economic growth? The Chinese people themselves do not have that much money to buy their own products.
That 62% growth is what I mean by Rosy.

"China will go through a recession eventually so it should to curb investment, but this is not a unique Chinese experience.", Undecided

It will not be just a recession but a hard economic fall. This is when the situation with its people will become ugly. The United States really did not become a world power until corruption began to end and labor laws began to fall in place. The United States, however, did not have to deal with 900 million poor peasants, and the fact that they will NEVER be able to get near the share of the pie that their Americans counterparts did.


"but as is the United States and her 3rd worldesqe income inequality.", Undecided

THe United States may not be concerned about the inequality of itself and the rest of the world, but it certainly does not have near the inequality of the Chinese people and its wealthy class. The vast majority of Chinese are dirt poor.

"Where did I ever say it wasn’t? When you find that quote then we may discuss…don’t put words in my mouth thank you.", Undecided

Your rosy picture could not possibly factor in the Chinese government. You believe that the Chinese economy will become a world power, but it is simply not possible under the current government. A revolution is inevitable, its just a matter of whether there will or will not be violence.

"No but I’d say its better then the American future", Undecided

Not nearly as bad as many think, but that is another thread. :D

"Make sure you have a piece of toilet paper when ur done…we don’t want a mess.", Undecided

I prefer not to respond to poopoo jokes, but I have plenty of Charmin ultra, thank you very much.....

China's accounting has been way off, and it is surely hiding reality. As my previous article stated, local governments alone have 129 billion dollars worth of debt. Billions more are in bad loans, and those loans continue to be given at a generously vigorous pace to ensure the economy keeps growing and growing. Double that for the bad loans, which include 260 billion at this point, and then add the foreign debt. The loans will continue to add in order to fuel the economy.

Again her FOREX accounts make up for that disparity, I was talking to my Economic historian professor about this very same situation let me put it like this so you understand why China is indeed a major power:

The Chinese save massive amounts of money, Americans save 1.2% of their national income. The Chinese have accumulated FOREX worth in excess of $515 billion, Japan another $700 billion, Taiwan $250 billion, Hong Kong $115+ billion, etc. Why? because American people don't save anything, the US consumes 80% of the world's savings, the US economy is now totally dependent on China and the gang for its economic well being. If the Chinese tommorow say "we will stop buying American dollars" the US currency would collapse, so would US demand, and a depression of the likes we haven't seen since the 1930's would ensue. This is the single greatest economic issue facing the world today, America's insatiable demand being floated by Asia's frugality, its a cycle. If China tommorow went into a recession the US would be in a hard place to be sure, because then the Chinese have to reorient their economy to consumption. Imo the Chinese recession will occur when the Chinese economy has overinvested (which it already has), and will be forced to start consuming to make that excess capacity work. That means that the US will have to do with less as a result since the Chinese will start demanding Yuan, and inflation hits China which will create lower demand for US dollars. The Chinese and the United States are locked in a mortal embrace, and the longer this imbalance goes on the worse it gets for the capitalist economy.

What happens when that foreign currency can no longer drive that economy?

Are we talking about the US? Because I know that China is thankful that the US dollar is going down and the US is paying a hard price for letting the dollar go down. Firstly the Chinese Yuan remember is fixed to the US dollar at a rate 8.28/1, thus as the US currency loses its potency against the Euro, Chinese exports will be EVEN cheaper against the Japanese, and European markets because those currencies are appreciating, this illustrates the power of modern China. She has the future of the economy in her hands, the US now is begging China (literally) to do something about the massive imbalance, because the falling US has done nothing to stem the flow of imports which has only increased to record levels regardless of the fall in the dollar value. Also the US dollars decline hastens the inevitable loss of the US as the world's hegemonic economic player, Russia has already annouced that she will start buying Euros instead of dollars, and nations that invest in US dollars are going to ultimately lose money unless the US Fed raises interest rates to make up for the loss. The world cannot have a net debtor nation as its reserve because its reserve is in the rest of the world, we are seeing the rise of the EU and China in a multipolar world, and the decline of that "great American empire" and frankly I'd rather see Brussels then Washington...its about fucking time.

"Greater Chinese GDP PPP:

2000: 5,074,820,000,000
2003: 7,199,700,000,000
2004: 7,811,000,000,000
2006: 9,100,000,000,000
2007: 12,400,000,000,000
2025: 25,155,000,000,000"

So between 2003 and 2004, Chinese GDP grew by about 8.5%. Then you expect it to grow by another 62% in three years?

Sorry I should have written down that the 2007 figures are from I believe newsweek and those are of Greater China (China, Taiwan, Macau, HK), but yes generally speaking those are the figures available to me, so its a more or less. Take it or leave it...

Secondly, since you forsee the fall of the U.S. economy, what resources and money will continue to finance this huge economic growth?

The Euro...why do you think China and the EU are starting to work so much together? I mean to everyone but Americans it seems see's how weak the US economy really is. when I say the American fall I don't nessecarily mean a massive all at once fall, but a gradual but increasingly noticeable decline in American standards of living, and income, its already gone down for many Americans...and with the concentration of wealth in the upper classes of American society the few will get richer and the poorer will really get poorer, neo-liberalism at its finest.

The Chinese people themselves do not have that much money to buy their own products.

They have 7,811,000,000,000, the problem is China is that not many are buying...its still a investment based economy.

It will not be just a recession but a hard economic fall.

Most forecasts foresee a soft landing in China, from the economist, and slower growth in China means...7.5% growth...think about that.

The United States really did not become a world power until corruption began to end and labor laws began to fall in place.

Slowly happening in China...its typical growing pains, the more important the Chinese economy gets, she will have to become more transperant to attract investment.

The United States, however, did not have to deal with 900 million poor peasants, and the fact that they will NEVER be able to get near the share of the pie that their Americans counterparts did.

True, I don't doubt that social inequality is quite an issue in China and always has been, one of the prime motivators of 1949 and here is where the CCP has lost its way. But that is capitalism, isn't this what the US wanted? The fact is that we have only seen the begining of Chinese growth, who knows how far it could go, surely larger then the US economy by leaps and bounds. Also by mid-century China's population is expected to start a decline.

THe United States may not be concerned about the inequality of itself and the rest of the world, but it certainly does not have near the inequality of the Chinese people and its wealthy class. The vast majority of Chinese are dirt poor.

So are an increasing amount of Americans...its ironic how the American complains about the Chinese inequality but ignores his own. The US and China are in the same boat the only difference is that in China there seems to be a general trend upward for society, in the United States the opposite.

Your rosy picture could not possibly factor in the Chinese government.

Again don't put words into my mouth thank you...

You believe that the Chinese economy will become a world power,

What's there to believe it already is.

but it is simply not possible under the current government.

It certainly is...look at Wal-Mart for instance, no one wants a democracy in China because as you say the income inequality is so bad. If elections were held who is to say that the socialists wouldn't come back to power and totally rack the Chinese economy back to its Maoist foundations?

A revolution is inevitable, its just a matter of whether there will or will not be violence.

Ok Marx...revolution is not inevitable if the Chinese gov't can reform in tandem with economic growth. You seem to forget that Marx noted two possibilites for the capitalist economy...revolution or reform, and reform has won out.

Not nearly as bad as many think, but that is another thread. :D

No its really bad...

And you remind me of a typical American who can't write properly...

And this bit of spelling criticism is brought to you by a Canadian who only realized after the fact that he had a misspelling in his own thread title. How funny is that?;)

Millions go missing at China bank (http://news.bbc.co.uk/2/hi/business/4201279.stm)

Two senior officials at one of China's top commercial banks have reportedly disappeared after funds worth up to $120m (£64m) went missing.

Bank of China and China Construction Bank .. two frontrunners in the race to list overseas. They shared a $45bn state bailout in 2003, to help clean up their balance sheets in preparation for a foreign stock market debut.

China's banking sector is burdened with at least $190bn of bad debt according to official data, though most observers believe the true figure is far higher. Officially, one in five loans is not being repaid. Just interesting, are they cleaning-up? or being caught-out?

And this bit of spelling criticism is brought to you by a Canadian who only realized after the fact that he had a misspelling in his own thread title. How funny is that?;)

Firstly I recognized it, admitted it, and changed it as much as I could, that's being Canadian an American would probably insist that what he did was right. Secondly I didn't misspell anything...I just used the wrong word...so are we seeing the American education system at work yet again? :confused:

About Zhongguo:

Despite the government's efforts to cool down the scorching economy, China's gross domestic product (GDP) totaled 13.65 trillion yuan (US$1.65 trillion) in 2004, jumping unexpectedly by 9.5% year-on-year, the National Bureau of Statistics (NBS) said here on Tuesday.
-----------------------------
In a sign that government measures are working to some extent, consumer prices increased 2.4%, the smallest rise in 10 months, while industrial production registered the slowest rise in more than a year.
---------------------------
Per capita net income of rural residents rose 6.8% last year to 2,936 yuan, the strongest growth in the past seven years. Per capita disposable incomes in urban areas, home to a third of the nation's 1.3 billion people, rose 7.7% in real terms to 9,422 yuan. By the end of 2004, the saving deposits of China's urban and rural population totaled more than 11.95 trillion yuan, an increase of 1.59 trillion yuan over the end of 2003. Last year, the number of newly employed reached 9.8 million among urban residents, 800,000 more than the anticipated goal. As a result, the urban registered unemployment rate dropped to 4.2% at the end of 2004, down 0.1 percentage point from a year ago.
----------------------------
China's total value of imports and exports in 2004 reached $1.15 trillion (9.5 trillion yuan), up 35.7% over the previous year. Of the total, exports grew by 35.4% to $593.4 billion, and imports by 36% to $561.4 billion, with a surplus of $32 billion, or $6.5 billion more than in 2003. In 2004, foreign direct investment actually utilized in China totaled $60.6 billion, up 13.3% from a year earlier. By the end of last year, China's foreign exchange reserves reached $609.9 billion, up $206.7 billion from the previous year.
---------------------------
http://www.atimes.com/atimes/China/GA26Ad05.html

Red hot ladies and gents, and it does not look like it will slow down significantly for a long time. I am starting to hear and read many people that China has a good 15 years of 7-10% growth in her, I can't even imagine that, and I don't nessecarily believe that because China can probably grow that quickly but can the world economy absorb all that production? As long as China pumps billions into the US propping her economy up China will grow, eventually to such a size where she will determine international economy policy.

All they need is a good rice blight, the right broken dam, or big enough cracks forming in their single party. Any of a thousand things could send them tumbling into ruin and chaos. While their population does lend them more strength than I am comfortable with, it also could be seen as their greatest weakness.

Even if by some miracle they continue to boom without disturbance, would any of you want that? You always complain about America, but it seems to me that from your point of view you would be trading one master for another. And the new master would watch you very carefully and would probably use the stick a hell of a lot more than the carrot.

All they need is a good rice blight

Brazil, Argentina,Uruguay, the US,etc. would be happy to supply all the rice China needs, she has in excess of $600 billion in savings she can easily survive any such draught.

the right broken dam

Three Gorges specifically? That would be a disaster yes, and it could have serious political implications.

While their population does lend them more strength than I am comfortable with, it also could be seen as their greatest weakness.

The greatest weakness in China is the comprimise btwn capitalism and a Leninist state (not Marxist), and how class conflicts, and growing tension btwn the cities and rural areas will play out.

Even if by some miracle they continue to boom without disturbance, would any of you want that?

I would of course, China isn't going to bother me frankly China is possibly the best thing that has happened to the world economy ever. China is not the United States, since I am from Canada and can easily reside in Latin America any time I want, all I see is big bucks coming from China. You see China did what the US can't, provide a market large enough to make nations like those in Mercorsur, and Canada, Russia, etc. grow because of China's almost unending demand. Because of China, Mercorsur is bound to be the world's bread basket, should the US get rid of her agricultural subsidies her agri. biz will be at a significant comparative disadvatage against the likes of Brazil and Argentina. Canada also should benefit from increased demand of her natural resources. To be fair there will be some losers in all this, nations like the US, some European states, and other industrial nations because they don't have natural resources to sell in abundance, they have a over paid work force, and their companies are moving industrial jobs to the BRIC countries. But I would have to say the twin growth of China and India will pull the thrid world out of poverty, and the second world (according to my definitions nations above Global GDP per capita yet below that of $20,000) will become part of the first. The United States has not been able to do that, and she can't, with a market of 2 billion persons India and China will provide to the world what the West simply could not. That's capitalism, if you don't like it Clock...try another alternative.

You always complain about America, but it seems to me that from your point of view you would be trading one master for another.

No...because China isn't interested in the America's China is interested in East Asia. You see you are (like most scared Americans) forgetting that this China rising is also a rise in the EU, and other regional blocs. We are going into a multipolar world, meaning by definition there is no "master" as there is now, only a collection of increasingly large custom unions, and nations:

>China
>United States and NAFTA
>EU
>India
>Mercorsur
>Possible Russian union
>the rest

It won't be China then the rest, no it will be a world divided by a horizontal chain of command not a vertical one.

And the new master would watch you very carefully and would probably use the stick a hell of a lot more than the carrot.

Oh no...American cold war xenophobia is back with a vengence...only this time it doesn't seem you can win. ;)

Don't knock paranoia. It has its uses.

Don't knock paranoia. It has its uses.

Don't flatter yourself...America's gone beyond paranoia, its schzoid.

Firstly I recognized it, admitted it, and changed it as much as I could, that's being Canadian an American would probably insist that what he did was right.

*cough* *ahem* *cough*

Secondly I didn't misspell anything...I just used the wrong word...so are we seeing the American education system at work yet again?

Ahh...I see. The wrong word. So it was bad grammar, not bad spelling. How Canadian of you.

cough* *ahem* *cough*

Robitussin

Ahh...I see. The wrong word. So it was bad grammar, not bad spelling. How Canadian of you

Well now ur getting the hang of it...good.

good.

Indeed.

I was scouring the web for even more economic statistics, and I came to some shocking conclusions about China’s GDP observe:

GDP PPP:
1975: 206,290,000,000
1980: 403,337,000,000
1982: 536,630,000,000
1984: 736,589,000,000
1986: 964,471,000,000
1988: 1,277,110,000,000
1990: 1,484,133,000,000
1992: 1,969,449,000,000
1994: 2,636,988,000,000
1996: 3,371,676,000,000
1998: 4,092,062,000,000
2000: 4,882,797,000,000
2002: 5,860,852,000,000
2004: 7,811,000,000,000
2006: 9,100,000,000,000
2025: 25,155,000,000,000

That is an increase of about 12,193% in 50 years, the United States in turn:

GDP PPP:
1975: 1,627,092,000,000
2025: 18,881,000,000,000

The United States about 1160%....

Trade:

China:
1840: 37,700,000
1900: 117,500,000
1929: 650,000,000
1950: 550,000,000
1975: 7,689,000,000
2004: 593,400,000,000
Net increase from 1975:7717%

United States:
1840: 111,700,000
1900: 1,370,800,000
1929: 5,157,000,000
1950: 9,993,000,000
1975: 108,856,000,000
2004: 804,000,000,000
Net increase from 1975:738%


Impressive ain't it... :eek:

Not to say it isn’t impressive, however what does it mean?

The conclusion I come to is that the US was doing pretty good in 1975 and had reached an economic plateau – perhaps one that all countries reach – hence there wasn’t much more improvement to make; whereas China must have been completely shit and hence could do quite a bit of growing.

I wonder what the data would look like for Japan, SK, Taiwan, Singapore, HK . . . . is there really any meaning in the data other than to say the country was doing shit and , after adopting the school of philosophy called “capitalism” now has capitol? If you take similar data for Saudi Arabia do you reach the same conclusion? UAE? Kuwait? Iran? India?

Not to say it isn’t impressive, however what does it mean?

Everything…

The conclusion I come to is that the US was doing pretty good in 1975 and had reached an economic plateau – perhaps one that all countries reach – hence there wasn’t much more improvement to make; whereas China must have been completely shit and hence could do quite a bit of growing.

That doesn’t explain why by 2025 China will be a significantly larger economy, what this shows is that China started from a low base indeed, but within 30 years has become the world’s second largest economy, with enough trade to significantly change the world economy, and China now has the US’ purse strings. Who do you think is keeping the American afloat, and avoiding a massive economic depression? The world economy right now is in the worse shape its been since the 70’s and the façade of economic growth is hiding the massive inefficiencies in the system, a depression is very likely…save your money ppl.

I wonder what the data would look like for Japan, SK, Taiwan, Singapore, HK . . . . is there really any meaning in the data other than to say the country was doing shit and , after adopting the school of philosophy called “capitalism” now has capitol? If you take similar data for Saudi Arabia do you reach the same conclusion? UAE? Kuwait? Iran? India?

Actually India and Brazil are the best comparisons both nations in 1975 were much larger then China’s GDP:

GDP PPP 1975

Brazil: 220,252,000,000
India: 262,842,000,000
China: 206,290,000,000

GDP PPP 2004

Brazil: 1,381,875,000,000
India: 3,284,739,000,000
China: 7,035,859,000,000

GDP PPP 2025

Brazil: 2,372,000,000,000
India: 9,808,000,000,000
China: 25,155,000,000,000

It’s the way China capitalized that is the success story, with high savings, large investments, mercantilist policies, and without a democracy, which throws in the face of IMF dogma. China also was lucky that she choose just the right moment to reform.