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02/26/2012

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Jack

Geez! nearly complete agreement with Prof Becker this week! I'd only add the looming problem of China's population rapidly aging due to their low birthrate.

We in the US also have a low birthrate but our population grows due to immigration that will help to provide SS and H/C for our older folk.

Lastly, there seems some, sports minded? fascination? paranoia about the day when China's GDP surpasses that of the US. I suppose this is driven by our fear that they'll (foolishly) spend the percentage of GDP as does the US or did the USSR during the "cold war".

They'd then build their "blue water Navy" and soon show up off San Diego to invade us or demand better or more authentic food from the thousands of nearby Chinese take-out cafes.

In short isn't this GDP issue silly? If you draw a line around enough poor people you can match the GDP of the US or that of the EU, but that still leaves their population with a per capita income one quarter that of the US. Kinda like our neighboring Mexico.

Curt Doolittle

Professor:

I agree. But the question is the time frame.

American prosperity is dependent as much upon its military capacity and currency as it is upon its advantages in formal institutions, puritanical culture and cheap land. Americans have made money for two centuries by selling off those institutions, puritanical culture, and cheap land to immigrants. Had the North Americans had a French totalitarian government instead of an English republican one, the country could have expanded and become a world power just as easily if not more so by selling off that land and new English industrial technology to immigrants. So how long can the Chinese import western technology and sell it to their own people as they migrate from rural to urban locations and life styles?

It only has to be long enough that they can disempower US military capacity, disempower US currency, disrupt US trade patterns, import a 'tipping point' amount of western technology, and alter the world trade and geopolitical power structure. Wouldn't that very likely nearly halve American standards of living?

It can take three or four generations for china to feel middle class economic pressures can't it? And a country that willing to oppress its people will generally externalize its internal failures -- like Iran profits from sabre rattling.

So, I tend to believe the time frame is longer and the impact greater than the Japanese example, and at least as long and as influential as the Russian episode has been -- if not longer.

And in the meantime -- although Americans never new, or have forgotten -- the Russian generals just wouldn't pull the trigger even if they were ordered to, for moral reasons. The question would be whether the Chinese have the same moral constraints. And a lot of us might argue 'no'. Their entire cultural framework is built on avoidance and deception in order to buy time to make conflict unnecessary. Our entire culture is built on the quick resolution of differences and transparency. Their world view is endemic. Look at our depiction of man in art. Look at theirs. They have a nihilistic view of human nature that a rise in the middle class must eventually defeat as you suggest. But that could take just long enough that a lot of damage is caused in the meantime.

I'm not sure China isn't a sixty to one-hundred year problem for us and perhaps the world.

CoonAndFriends

I quite agree with professor Becker's remarks, and if I were American I would not be afraid of Chinese expansion. I don't understand what the Chinese government's plan is for the elderly given their low birthrate - whatever it is, it will be very very expensive; and social unrest will likely continue to be a problem, which is good news for both the US and the Chinese people.

TANSTAAFL

The World Bank's "China 2030" report is a whitewash. It omits any candid discussion of political repression in China, the tottering foundations of the Chinese banking system, and the PRC's failure to honor international law.

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Southern JD

The shallowness of this essay is very telling. All that we can say for sure about Becker is that he is a Bourbon who never learns and never forgets.

Let's start with the never forgets part. We are given examples of Russia and Japan, without reflection.

As for the never learns part, he does not ask, Why has China been able to grow and adapt to this point. Until one gauges the strength of China, one cannot guess at whether it can overcome its weaknesses.

The real true answer to me is that people matter and we know next to nothing about the people who will matter in the future in China.

If one thinks people don't matter, remember Ronald Reagan. He was wrong on every policy but right on personality, which trumped.

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Though you may be afraid of Chin's expension, while, as a ordinary chinese people i have to say,we must or have to be more stronger, specially when we learned how the weakers would be in history.

Jack

CoonAndFriends -- You do make some worthy points regarding culture amid you generally fearful predictions.

One.... is that of motivation. Having been in Korea at a time when cab drivers drove from 6 am to midnite curfew for about $20/US I can report that they didn't work longer due to the curfew, nor shorter due to the discomfort of going without food or basic necessities.

The Chinese are surely in the same phase of economic necessity.

On comparing Chinese militarism with that of the, former, USSR, I'd point out that in Chinese history they have NEVER been successfully invaded and that their periodic revolutions tended to be a rather business-like throwing out of a Dynasty gone weak and fat by those having hardened themselves as "outs" after a fairly brief demonstration of superior power.

Russia will likely never forget the costs of having been invaded and surely much of their post-WWII expansionism was driven by wanting to buffer themselves from Germany and deprive Germany of potentially additional invasive power.

The US? Like China, except for those days of our infancy, has never been successfully invaded and even today it would seem A. VERY costly to the attacker B. difficult.

Could a re-militarized (if they ever were considered a global military power??) China exert power in Asia and perhaps even in the M/E oil fields? Sure.... and great! let them deal with a few hundred years of attempted peace keeping there as the US has it easily within its grasp to be dependent only only oil/gas that comes from the Americas..... while the other 3/4ths of world demand can be supplied by the M/E, Russia, etc.

As for China being a 60-100 year "problem" for the US I'd remind the overly paranoid of the Chinese/Japanese game of "GO" in which the offense can be quickly turned into a defense and the "inside" quickly become the "outside" in the tussle over territory.

For example their ability to grow rapidly on exports to the US and EU are limited by their current product mix, the mix they might attain, and the fact of our spending FAR more of our income on goods and services that must come from our own locale.

Will they, and a soon to join the world community NK and other Asian nations become richer? Sure. Then they can buy more of our stuff including surplus grains and travel the world as did the Japanese when they became wealthy in large part by selling into our huge consumer market.

Lastly, I question why you and so many ascribe evil intent to the Chinese culture; those people who have long emigrated to N. America and have prospered from strong work ethics and scholarship.

But perhaps you mean a "bad draw" in terms of a non-democratic government. Even so it's likely that the worst of them perform some "risk reward" calculation and come up with the fact of major turf wars having been rendered profitless about the time nuclear destruction was invented.

Sure we've played at "war" since but primarily via the very strong attempting to impose hegemony or perhaps order on the weak and disarmed at great cost and little benefit. Ike, the great general pulled back from Korea (as did Truman in curbing MacArthur) rather than risk a land war with China with USSR backing.

For example being close and antagonistic neighbors could either India or Pakistan benefit by a first strike against the other?

In conclusion, have we gone so far with our overspending and emphasis on military power that we're at risk of seeing the world primarily in militaristic terms?

Lisawhite

Pretty insightful post. Never thought that it was this simple after all.Keep it up.

Pedro Cosme

The Japanese economy GDP stopped growing because it attained the "technological frontier" (38000USD) in the middle of the 1980s and its active population is decreasing.
Since 1985, its growth rate per person in the 15 to 64 age interval is identical with that of the USA: the Japanese economy grew 1.54%/year (per person in the 15 to 64 age interval) while the USA has growth 1.47%/year.
In the period 2000-2010, the Japanese economy grew 1.31%/year (per person in the 15 to 65 age interval) twice that of the USA (0.58%/year), UK(0.72%/year) and similar to Germany (1.28%/year).
Data from the World Bank.

If China is able to implement a smooth transition to the democracy (that did not occured in the USSR), i predict that china will attain the "technological frontier" somewhere near the year 2050.

See the next post (it needs translation from portuguese language):
http://economicofinanceiro.blogspot.com/2012/02/o-erro-de-ricardo-reis.html

Pedro Cosme Vieira

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Those examples do not prove that forecasts about China’s future growth.

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It seems to me, the opinion is China is at an economic crossroads and is working on privatizing since businesses are state owned which lends to a more controlling situation over workers and the nation, then I am at a loss as to why Romney mention to the press that America should borrow monies from China and use it, as Romney seems to suggest for military purposes aimed at China. Is this a statement from a seventies idea of things, for the ongoing relations this country had with China, from the opposing side of friendship with China that Romney is borrowing or his solution to overseas issues,for the 21st century, that in my personal opinion will start an international incident. Wouldn't most nations take it as a slight I know I would and have. It seems that people have invested my way not to stand for advocacy groups but to still descriminate on the basis of race and religion which I thought was against federal laws and going against the equal opportunity laws that were place under Federal Communication laws. Misrepresenting companies to make a point by the old guard who do not want computers and those making a point toward a Japanese American Buddhist, keeping one from housing and jobs, which I thought we were all with integrity , Buddhists and other peoples , speaking out against oppression.

I do believe , as I have felt, that China would definitely take it as a slight.

And Romney is an indication of what we may have as the Republican roster.

We may need to all pray more, for better candidates. I surely miss the moderate Republicans.

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