We don't know what China might do. This is a plausible hypothetical form of attack. There are things that I am pretty sure are facts. One is that China is dug in well enough to keep a government going. So is the U.S., for what it's worth. Either side probably thinks they can keep a few thousand to a few million underground long enough for radiation to die down if it is a radioactive war. Another is that China has our cruise missile technology and has had it since Bill Clinton gave it to them. That doesn't make a lot of difference now except that China has had at least ten years to develop methods and build a stockpile of parts that can be uncrated and snapped together. I did say that these things would be atrocities, but they would get here. If they own Taiwan then it would be that much easier, that much shorter a distance to lob missiles from. It would also force the U.S. to use resources to try to prevent launches from Taiwan, and we would have to badly damage a former peaceful ally to do it. If we wanted to win this chess game, for one thing we should have obedience-trained Saddam. The new regime will cut our throats a hell of a lot faster than Saddam's regime would have, and they are heading for a new dark age as fast as they can. We could have done this at a profit, squeezing him for cheap oil. We could have had that trillion dollars that is being flushed down the tubes to establish moon bases which would help prevent attacks by China. Even doing nothing would be better than what the US has been doing for the last 15 years, because doing nothing would mean that we would have full strength in our military and military hardware, without having made a lot of our men too sick to fight and without having spent the money we could use to build better weapons. That is, we attack no one and we make what we have the best in the world.
Not without expensive guidance systems they can't. Unless you're talking about a loss rate of 100%... Sure, if they launched a million of them, some would get through. And by the time they did, thermonuclear warheads would be falling on every military, industrial and population center in China. The US would lose a couple thousand people, tops, while China would be basically wiped off of the map. Both sides know this, and that's why it's never going to happen. The most heavily industrialized nation in the world is the United States. You also don't mention that the cheapest cruise missile technology around has long been in the hands of the US. Sure, China can get away with paying it's factory workers less, but they don't have the cheap turbofan technology, or access to military GPS (necessary for cheap, accurate guidance over long distances). Moreover, the US has 8-10 times as much money to spend on weapons, and so could also build a million cheap cruise missiles. And yet they also choose not to do so. Perhaps both the Chinese and American governments understand that a massive intercontinental cruise missile attack is a fucking stupid idea, especially against a nuclear power.
Distance from China to Taiwan: roughly 50 miles. Distance from China to mainland USA: roughly 7000 miles. Difference Taiwan makes in Chinese missile posture towards US: none. You should stop talking about global military capabilities, because you clearly don't know the first thing about them, and are just making yourself look stupid.
He's not, but you sure are. It shows in every silly thing you say. How long is it going to take you to realize that your best bet is to shut up and listen and learn? The more you talk/type the worse you make yourself look. And you know what's so outrageously funny about it? Everyone can see it - but you!!! Please Register or Log in to view the hidden image! (I get this absolutely hilarious image of you hopping around in these forums on one foot - because the other is stuck in your mouth! Can't you even taste it?) Ha-ha-ha!!!!!
So, you never bought "mutually assured destruction"? I guess I better define what decimate means to me. I would call two out of three people dead, decimation. The warheads on the ICBMs that China and the USA have are how many times more powerfull than the Hiroshima bomb? How many ICBMs does China have targetted at the USA? What proportion of incomming ICBMs would you expect to be shot down by what? I think mutually assured destruction was real and now applies to China as well as the Russia. Doomsday won't happen because nations that could engage in mutual destruction will not fight each other in full scale wars.
Thanks for catching my numerical error and supplying data on current US and China consumption. I was not concerned about China achieving US per capita oil consumption as that is physically impossible due to production limitations. By your numbers, US per capita oil consumption is 15 times greater. As China reduces it use of coal, it will need to import more oil. One important aspect of Chinese per capita wealth increase, you did not mention is that many of the things they will buy form their factories, like refrigerators, TVs, require energy and coal will supply less as they close unsafe mine -12,000 last year - so even without any improvement in peoples life styles, Chinese oil consumption will rise. Oil production is near max capacity now. Thus the price of oil will rise. I do not have the data, but think US$100/barrel is about the same as it was at the artificial shortage of 1973 peak, in inflation adjusted dollars. That is I think US$100/barrel oil may be only a few years away, even if China only tries to meet its needs, not make "economic warfare." (It is not good that they could, and win, unlike a military contest, except possibly one in their offshore waters. Return of Taiwan the Chinese objective.) The internally saving rate of the US is very low, perhaps even negative, as people have refinanced their home mortgages at the lower rates of the last few years. It will certainly be negative if oil is $100/ barrel. Someone must finance the "twin deficits" which grow larger every year. In crude terms the way it currently works is US buys Chinese goods, and the dollars return to the US as China (and others) lend US money to cover these deficits. If china did not do this, US taxes would need to rise and this with more expensive oil would leave less for Joe & Mary USA to spend on keeping the economy humming. It would hurt US much more than China as currently China is not really getting anything in this exchange except IOUs. You are surely correct that the Chinese population will consume more things produced in their factories, but this does not mean, necessarily that those factories will have less to export. - I all depends upon how the productivity of those factories changes as they are made more modern. I think you are entirely wrong to assume it will. The grow rate 9 to 10 percent annually is much faster than the population growth, and this is new factories and more efficient old ones. Also you must consider that as China builds new factories, it needs to import less finish goods. For example, Brazil's Embarae (Fourth largest, if not third largest, in the world) has built a new factory to manufacture the ER -145 airplane (about 130 seats) in Harbin (same city that had the water problem when another new factory had an explosion) - China will make some airplanes, etc. and import more but less expensive raw materials. China (and Asia in general) will displace industrial imports with local production and import more commodities. The US will lose market as it mainly makes finished products. Brazil has now a long term contract to supply iron ore (20 years I think - from memory) The price of commodities has gone up a lot, whereas the price of things the US sells are coming down. (An over generalization to be sure, but true on average. Brazil sells mainly commodities and has historically high trade surplus, despite the currency being 20% stronger, relative to the dollar in one year.) Empires rise and fall, but it seems clear to me that the US is already on the way down. Real wages of Joe & Mary USA have been lower for several years in a row, the “twin deficits” are rapidly growing, oil will be more expensive, industrial production for export is less and the value produce/ sold is lower (One of the "twin deficits" in other terms.) I do no know about total US government’s tax income, but expect it will soon be decreasing, if it has not already started down. As foreigner lose confidence in the dollar as a safe store of value, the interest US must pay to avoid default will increase. The US debt is IMHO already beyond the point of “no return.” - I predict that Pres. Bush's budget for next year will cite Katrina, Iraq, and other things to explain why the promised reduction in the debt will need to wait until "next year." Summary: China is on the way up and US is on the way down. Passing is just a question of when.
You ask the wrong question. The question should be: is hell ever going to freeze over long enough for the US to catch China.
There are consequences when someone deliberately trashes the U.S. economy. How do they expect a country without an economy to work better than a country like China?
It's not clear to me that they're reducing their coal consumption substantially. Sure, they're closing mines, but that's coal *production*. They can also import coal to make up for decreasing domestic production, and very likely will do so if oil becomes very expensive. They do, after all, live right in the middle of the world coal market (Australia, China, Indonesia). Likewise, more than half of the energy produced in the US comes from coal, and the US has the world's largest coal reserves. Indeed, US energy companies are already working to promote coal consumption by developing "clean coal" systems and going on a PR blitz. As the price of oil rises, the incentive for both countries to rely more on coal will rise, and so I expect both to do exactly that. What I'm getting at is that I think you're overstating the importance of oil. It IS important to both economies (and everyone else), but by no means is it the dominant energy source for either country, nor will it ever be. Again, that represents a cut in comestic coal production, not consumption. When they start closing coal-fired power plants, it'll be a different story, but they aren't doing that yet. Also, by no means is oil the only fuel alternative to coal. China in particular has been making heavy investments in hydroelectric power, so you can't assume that any hypothetical cuts in coal consumption will be offset by rises in oil consumption. Actually, China's coal consumption has been on the rise; all the mine closures just mean that it will someday soon become a net importer of coal, rather than exporter. This is not to say that Chinese oil consumption won't rise; it certainly has been rising and will continue to do so. But this phenomenon is not driven by cuts in Chinese coal production; the two have little direct bearing on each other at this juncture. Undoubtedly. Supply is maxed out and demand is growing, driven by China and India, so the price is going to go up. We will surely see $100/barrel oil in the next 10-20 years, or maybe sooner if some catastrophe befalls a big oil-producing region. While I agree that oil is going to get more expensive, and that the US should get its financial house in order, I don't see how this adds up to Chinese preeminence. You're neglecting the primary economic mechanism that corrects trade deficits: currency exchange rates. If China stops buying up US T-Bills (these are the "loans" that finance the trade deficit), their currency will spring up against the dollar dramatically, and the trade imbalances on both sides of the Pacific will disappear. The rise in the cost of Chinese goods and labor would spell the end to foreign investment and rapid development. Thus, China isn't going to stop lending the US money, and even if they did, it wouldn't be a big deal in the long run. Also, it is very likely that the US, were it forced to balance the federal budget, would do so via spending cuts rather than taxes. The US is not Sweden, after all. And another thing: they get a lot more than IOU's. They're now using all that debt to buy assets in America, just like every other foreign lender in history. Remember the botched UnoCal bid from a few months ago? While this phenomenon also terrifies nationalists and protectionists, it should be noted that every time China invests in US assets, or vice-versa, the probability of conflict goes down. So it's win-win in the long run. It also depends on the cost of goods from China on the world market. As China's standard of living increases, their ability to operate cheap factories will decline, and the cost of their goods will go up. This is why developed countries tend to produce complicated, finished products while developing ones produce cheap junk. It will not take much of an upswing to push the cheap production infrastructure next door to India. Compare to Mexico: 15 years ago there was a surge of factory openings there (and closings in the US) after NAFTA went into effect. Now that Mexico's standard of living has improved, and their currency is no longer worthless, those same factories are all closing and moving to cheap pastures. No reason to think the same won't happen in China. Well, that's a bit dire if you ask me. The US economy is still the largest in the world, and grows at approximately the same rate as the world GDP. That's hardly what I'd call a decline. International trade isn't everything; the US (and China, Europe, etc.) all produce and consume internally WAY more than they trade internationally. Not sure what your point is about US tax revenue; it's down, but that's because we've just had several rounds of tax cuts. Which in turn stimulated the economy... but you can expect to see the books get balanced by the next president in office and, again, the trade deficit will diminish as China develops and the Yuan appreciates.
It is true all forms of energy demand are increasing in China (must with their growth rate and rising living standards) but Hydropower will not drive your car (or motor scooter) you need oil or alcohol for that. In less than your 10 year estimate something like the adult male US population will be added to the "driver class" in China. It is the fastest growing car Market in the world - why all major car makers are opening plants there. Some of these 100 million new drivers will be on motor scooters and the cars will be smaller and more efficient, but Both China and India are rapidly leaving bicycles behind for the IC engine. I do not follow your logic: China stops financing the US debt should make their currency stronger? Why? To buy a T-Bill or US bond you need dollars. If they stop giving Yuan for these dollars, they will have more Yuan at home. I should think that would make Yuan worth less unless they print less also, but I expect they will just buy more commodities from Brazil etc. Brazil has passed the US in soy production, thanks mainly to the greatly expanded exports to China. The China / Brazil trade is rapidly growing. We have lots of land per person and they have lots of people per acre and are now able to supply industrial goods that we bought from US in prior years. Yes, the UniCal deal fell thru even though China would pay more for it and in cash. They seem to be wanting to lock up oil supplies in the ground. They are working with Venezuela now also - US may find it hard to get oil from there soon. Chavez fears US invasion - has recent bought a lot of AK -47s etc. He is popular and will give them out to the population if need be. Point is China may not need to directly fight US for oil. - It can buy it away. Hope you heard Greenspan's speech tonight. He said what I am saying. - Foreigners will not indefinitely finance US growing debt.
quadraphonics is right, at least for floating currencies. It's a question of supply and demand of currencies. Chinese get dollars when they sell Americans stuff. The value of the dollars to the Chinese depends on what they can do with those dollars. If they can't find anything good to do with the dollars they won't take dollars for stuff. So the Americans who want the stuff will have to offer enough more dollars for the same amount of stuff until something that can be bought with dollars once again apeers to be a fair exchange for the stuff that can be bought with Yuan. Removing US bonds as a item that Chinese want to spend dollars on would change the supply and demand equation for Yuan to Dollars. The problem with quadraphonics thinking and with every basic macro economics textbook on exchange rates and trade deficits is that the text book says that your trade deficit will go away when your currency falls because you will gain market share. This will not be the case with a moderate (say 25%) fall of the dollar against the Yuan because there are no products manufactured in China that would be manufactured in the USA if the dollar fell 25% against the Yuan. The US trade deficit would grow with a 25% fall of the dollar agains the Yuan.
I agree with point of both your paragraphs, but note you said: "for floating currencies" The Yuan is not one. It is a controlled currency. I think the Chinese government knows full well they would come off much worse than the US in a military contest, so they are seeking alternative ways to make the US back down or cease support of an independent Taiwan. In my view, their plan to take Taiwan back has two elements. (1)Buy / build subs, in quantity with limited range that can sink US ship off their coast if it came to that, and install lots of silkworm missiles along the coast that can do the same if twenty or so are fired in a coordinated attack at each US ship. Someone here claimed that China does not have good cruse missiles and/or Clinton gave them the technology. Etc. That is not true. The silkworm is a good missile, perhaps not as good as the French Exocet, but much bigger and stills a "sea skimmer." If one gets thru, the ship probably goes to the bottom. China was selling earlier versions before Bill Clinton was president. They no doubt have used some of their advancing technology to give it penetration aid. For example they may be able to launch in pares with the lead missile launching a dozen decoys when the US ship's radar "paints" it. (US anti missile systems work by illuminating the incoming missile and the energy reflected from it is used by the defense missile to home in on the attacking missile. This is why one speaks o "painting the attacker." Sea skimmer are a real threat to ships, even if they are not as low as the Exocet, as they can be painted only after they come over the horizon, and there is only time for one defensive engagement, prior to the last ditch defense of bullet firing guns. These guns radar trace their own bullets and converge them on the attacker - Thus they can only take care of one attacker at a time.) I think 10 silkworms popping over the horizon at one time would have at least a 50/50 chance of putting the ship on the bottom, 20 would almost surely do it. Twenty silkworms cost much less than 1% of an escort ship, like Aegis. 100,000 cost less than the aircraft carrier at core of the fleet. China can afford to make it too expensive for US to defend independent Taiwan with the seventh fleet. (2)Avoid all of (1) above, by gaining economic power to destroy US economy. Set Yuan value low, keep it there as Government controls economy not a free market currency exchange. A low Yuan makes it expensive to import things, so let the people do without until internal growth can supply them domestic produced goods. They are happy as their lot is improving very significantly for a miserable base. Also they have little independent news, so tell them how well off they are often and it seems true. Keep buying US debt, but let it be known (quietly) that this will stop if the US is not "reasonable" on the Taiwan question and fails to honor its long-standing "one China" policy. Strengthen Mainland/Taiwan economic ties. Invite Taiwan businessmen to trade fairs etc. Open direct flights between both. Build a faction in Taiwan that wants to reintegrate with the mainland. Sell them on the Hong Kong model (One government, two economic systems) Continue economic change on the mainland that makes it very much a guided free market. etc. - Most of this has already happened and more of it will. If I lived in a house on Taiwan, I would either be a leader in the "Re-integrate now" movement or sell and get out. China will win this struggle.
The US response to a Chinese end to US debt buying would probably be to print away the US national debt, inflation be damned. The dollar would crash. Very little imported oil for the USA unless they take it by force rather than by paying for it. The world trading patterns break down and a global economic depression gets started. Maybe I should stock pile good used stuff because the price of good used things will skyrocket when the supply of new stuff gets cut off. I think every US president would rather have China take Taiwan than have China stop buying treasury debt while they are in office. The US president would want to pretend that China taking Taiwan was makng everybody happy and that it was his Idea. China would allow that, but how do you get the Taiwanese people to dance and sing happy songs on cue for CNNs cameras?
Congratulations. You got the picture I have been painting. On the need for scenes of happy Taiwanese dancing in the streets etc, I suggest that CNN film them now in San Francisco's China town, while it can still afford to pay them to dance and sing.
If China places missile launching stations on Taiwan, it will save a significant amount of fuel and increase the probability of hitting their target. It will also eliminate a first line of defense against those missiles because the U.S. will lose land based defenses and the strait. For them the land itself will be disposable, as will the people of Taiwan. It will force the U.S. to bombard people we used to protect, in other words, Taiwan will be a hostage.
Yeah, like our military strategists have been doing any better, Billy T. I'm not particularly good at chess but I know a chess game when I see it.
