- MUST READS
- PRODUCTS
- RESOURCES
- MULTIMEDIA
- ENFACTLOPEDIA
- FSM AUTHORS
- ABOUT US
- CONTACT US
- FSM BLOG
- DONATE
- PRESS COVERAGE
SEARCH FSM
- IN THIS SECTION
November 25, 2008
Exclusive: New Reports Cite China’s Dangerous Rise
The National Intelligence Council has released its report Global Trends 2025: A Transformed World. It presents a grim future torn by conflict, and a United States with diminished capacity to deal with mounting threats. The NIC is a government think tank working for the Director of National Intelligence. “By 2025 the international system will be a global multipolar one with gaps in national power continuing to narrow between developed and developing countries,” says the report.
The NIC sees the United States still having the world’s largest economy and most advanced military, but America’s shrinking qualitative edge will not be sufficient to offset the quantitative challenges that will be launched by new major powers, rogue states and terrorist groups. The NIC warns that “advances by others in science and technology, expanded adoption of irregular warfare tactics by both state and non-state actors, proliferation of long-range precision weapons, and growing use of cyber warfare attacks increasingly will constrict US freedom of action.”
The report’s use of the term “multipolar” is music to the ears of Chinese leaders who have been using that term constantly since the end of the Cold War to describe how they want the world to evolve. For Beijing, multipolar means China is on a par with the United States, and able to influence world events in its favor. As the NIC puts it, “China is poised to have more impact on the world over the next 20 years than any other country.” China will have the world's second largest economy by 2025, and will be a leading military power. It will have a large navy to protect the sea lanes that deliver raw materials from its neo-colonial trade network to feed its gargantuan industrial complex.
The NIC notes that this transformation of world politics is the result of a massive transfer of wealth from West to East, from Europe and North America to Asia. The United States has transferred $1.2 trillion to China since 2001 by running massive trade deficits. These deficits have not only given Beijing the largest currency reserves in the world, but has supported the growth of Chinese industry and given it a steady influx of new technology. Meanwhile, American factories have been replaced by Chinese workshops. U.S. consumers have been spending themselves deeper into debt to help build China into America’s strongest rival.
On the same day that the NIC report was making headlines, Zachary Karabell had a Wall Street Journal op-ed. Karabell has run a fund that invested in China, and has a book coming out with the alarming title Chimerica: How the United States and China Became One and What That Means for the World. The problem is Karabell does not think his title is alarming even though the international union he forecasts will be on Beijing’s terms. He wrote, “But every crisis creates opportunities – or at least so goes the old Chinese saying. This time is no exception, and China will emerge victorious. As its recently announced $600 billion stimulus package makes clear, those who have cash can spend their way through this global crisis, and China has lots.” He notes that, “with $2 trillion in central-bank reserves alone, China is cash-rich and almost debt-free.” Karabell sees this as a “positive” development because Beijing can use its money to invest in the heavily indebted United States, buying up America’s productive assets and dominating its economy. The WSJ has been a strong proponent of the “free trade” and open investment policies that have brought America to its present plight.
Americans who want a better understanding of how irresponsible actions on this side of the Pacific are creating dangerous consequences on the other side of the Pacific should read the 2008 annual report of the U.S.-China Economic and Security Review Commission, which was released November 20th. The Commission was created by Congress in 2000 and has 12 members, three of whom are selected by each of the Majority and Minority Leaders of the Senate, and the Speaker and the Minority Leader of the House. The chairman is Larry M. Wortzel, a retired Army Colonel who headed Strategic Studies Institute at the Army War College before leaving the service to become Director of the Asian Studies Center and Vice President for foreign policy and defense studies at the Heritage Foundation. The Commission’s 2008 report was signed by all 12 members, indicating a bipartisan consensus that is rare in Washington.
The 393-page report is available on the Commission’s website (www.uscc.gov), along with past reports, hearing testimony and other research papers. Among its many findings, the Commission cited Beijing’s aggressive economic policies. “China continues to violate its WTO [World Trade Organization] commitments to avoid trade distorting measures. Among the trade-related situations in China that are counter to those commitments are restricted market access for foreign financial news services, books, films and other media; weak intellectual property protection; sustained use of domestic and export subsidies; lack of transparency in regulatory processes; continued emphasis on implementing policies that protect and promote domestic industries to the disadvantage of foreign competition; import barriers and export preferences; and limitations on foreign investment or ownership in certain sectors of the economy.” The Commission also notes, “China has been pursuing a government policy designed to make China a technology superpower and to enhance its exports. Some of its tactics violate free market principles – specifically its use of subsidies and an artificially low RMB value to attract foreign investment.”
Unlike Karabell, the Commission thinks massive Chinese investment in America may be harmful. “Despite statements by Chinese leaders that they seek only financial gain from diversifying their investments into equity stakes in western companies, there are increasing suspicions that China intends to use its cash to gain political advantage globally and to lock up supplies of scarce resources around the world,” concludes the report. Both wealth and power come from the control of assets, those who own the world will run it.
The great value of the Commission reports is the direct link made between economic developments and national security issues. The Commission examines Beijing’s military buildup, its proliferation of weapons, its use of cyber warfare, its space program and its growing diplomatic influence around the world. The Commission then presents 45 recommendations to Congress on how to deal with these problems. No better work is being done on these issues than by the U.S.-China Economic and Security Review Commission.
Both the U.S.-China Commission and the NIC raise the question of whether the “western model” is still credible, especially in the wake of Wall Street’s financial meltdown. “For the most part, China, India and Russia are not following the western liberal model for self-development but instead are using a different model, 'state capitalism',” says the NIC report. The Commission found “China held to its hybrid model of a state-directed economic system throughout 2008 as it consolidated its position as one of the world’s fastest-growing countries.”
Unfortunately, the notion that economics is in its own separate box divorced from the larger context of global rivalry and national security continues to crippled U.S. policy. At the Asia-Pacific Economic Cooperation forum meetings in Peru last weekend, presidents George W. Bush and Hu Jintao met. According to the White House, they “continued their conversation about the global financial situation, the need to reject protectionism and the work ahead” to accomplish a new global trade deal. In other words, to continue the unbalanced relationship that has transferred so much wealth and influence to Beijing over the last decade.
President-elect Barack Obama has not laid out any meaningful plan that is different from the failed China policy he will inherit, anymore than President Bush’s approach was different from President Bill Clinton’s, who threw the doors open to the Chinese. If the dire warnings from the NIC and the U.S.-China Commission are to bring forth an effective response, American policy will have to be rethought. We either contain the rise of rival powers, or their successful rise will contain us.
FamilySecurityMatters.org Contributing Editor William R. Hawkins is a consultant specializing in defense and trade issues. E-mail him at HawkinsUSA@aol.com.
Reader Comments: Submit Your Comment (0)
| Print This E-mail This |
|
