Really interesting, very in-depth article about the current state of the Chinese military, its future, their current regional and geopolitical position, and possible pitfalls they face in the near and distant future.
Some interesting things I picked out of this that I wasn't aware of before:
- Regional cooperation among China's neighbors has never been higher, and their military spending is increasing at what for China must look like an uncomfortable rate. China's neighbors - almost all US allies in some military capacity - spend more than China does on defense when combined, and most of them seem to be gearing their purchases with a sharp eye on countering China.
- Demographics problems for China might make their last two decades of growth look like a historical blip on the radar. I've already read in a number of places that inflation combined with wage growth is putting a big damper on their economy. It's only being held down by immense state spending on domestic industries. But if and when the world finds the next big low wage cash cow to make their cheap crap, China will be in trouble for a lot of reasons. Even if the economy keeps humming along for 30 years, they're going to get crushed by the weight of having to care for their elderly.
- China still lacks a capability to develop their own defense technology independently, and even efforts to steal or reverse engineer foreign tech hasn't been super successful. This isn't necessarily a huge shock. After all, the United States is really the only single nation that has that capability, and only because they spend a ridiculous sum of money keeping that machine going. Europe pools resources to do it. Even the US pooled a bit to make the F35. The real question, perhaps, isn't when will China catch up to the US in actual technology levels, but when will China catch up to the US in their capacity to create and advance tech.
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Interesting. I'm in a poor position to comment on pretty much all of that with an informed opinion. That said, I wonder how surprising it would be historically for multi-national collaboration to be effective at stopping expansionist impulses, whether economic or military? In that region in particular, I mean. My impulse is to say 'not very' and leave it at that, but I know such things have happened before in human history. And it would certainly be sensible for their neighbors to do so, if it held out a chance for success.
The demographics question I am a bit less of badly uninformed, but not by much. That said though I can't help but wonder with so much of China's growth being without precedent in China or elsewhere, I've often wondered how much anyone projecting along those lines actually knows what they're talking about? China's growth and especially its recent background seem kind of unprecedented in human history (overcoming colonialism, evolving out of communism, experimenting with status as a global power on a variety of levels), so it leaves me wondering just how guessy the guesswork is.
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quote:Regional cooperation among China's neighbors has never been higher, and their military spending is increasing at what for China must look like an uncomfortable rate. China's neighbors - almost all US allies in some military capacity - spend more than China does on defense when combined, and most of them seem to be gearing their purchases with a sharp eye on countering China.
Do they really have a choice? Not that it's a super great thing that developing economies in the entire region have to waste a ton of money on military expenditure, but China still lays the whole grabby schtick on real thick and have been overtly drumming up nationalist antipathy to keep the populace aligned behind their attempted land grabs of islands that allow for humongous sea wealth claims.
They've been courting a unified block on their attempts because by now everyone knows what they are after and what they will do to justify it, sooooooooOOOooooooooooo
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I doubt we're going to see SEATO expand and turn into a genuine NATO-like operation. At least, not yet. I think most of them still view China as more worrisome than the existential threat that Europe viewed the USSR as. But if China keeps poking all their neighbors with sticks, you might see a US-led effort to create a firmer defense structure. I think a more effective track would be to have an economic co-op. There are plenty of low-wage, impoverished nations in that little defense co-op area. Have them work with Australia, Japan and the US to shift some manufacturing to these nations. Takes some of the wind out of China's sales and also bolsters those domestic economies.
The background stuff demographics you mention coupled with the economics is something I can't find a historical parallel for, but economically, they're basically mirroring what the US did during the Industrial Revolution. Their problem of course being they're doing it with like 20 times the population and have to contend with globalized economics.
The US had the advantage of basically zero competition following WWII, coupled with a general lack of global competition in the 30s and 40s when US wages were rising. We had an amazing amount of good fortune in making that transition.
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I am for mostly unrelated reasons done with attempting to delineate "existential threats" as an important consideration in justifying defensive measures.
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quote:Originally posted by Samprimary: I am for mostly unrelated reasons done with attempting to delineate "existential threats" as an important consideration in justifying defensive measures.
History bears you out on that, so I don't blame you.
But you can understand why having the Huns at the doorstep in 1945 was a lot more terrifying to western Europe than having the vague threat of China gobbling up islands. I'm not saying that's not important or worth opposing, but it's not really the same thing, which was the only distinction I was trying to make.
It's the difference between being willing to spend money for a vague threat to defend yourself, and being willing to enter into a regional security agreement that ties your fate to someone else's. The threat isn't serious enough to make that jump for them yet.
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Yeah, it's entirely a separate impulse that has led me to conclude that academic nosing around the location of "but where is the existential threat?" is pretty useless.
Like, when hamas was bombing israel it had practically become a rote and practiced thing: "But what existential threat does Hamas pose to Israel?" Oh so until it passes some sort of threshold for existential threat you're not supposed to respond to weapons fire, or you honestly expect any but the most impotent state not to?
Same thing with this whole Philippine islands thing going on somewhat at the moment. No, the china blockade on resupply for the troops that have been maintaining the island since the 90's isn't an existential threat. It will still appropriate a need for an armed presence to counterbalance china's otherwise overt tendencies to claim it by whatever means they think they can get away with, so
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I think it's an interesting question, but in this instance for different reasons.
Neither of those things are probably existential threats, but that doesn't mean threats below that of an existential one do not require an armed response. What they're really getting at is a different question entirely: What constitutes a proportional response?
It's a similar question in the case of SE Asia and China in relation to NATO in Europe. Existential threats threaten the very existence of a nation, and in Europe's case, they decided to redefine their existence by forming a more inclusive community with shared defense commitments. I feel like non-existential threats tend not to force that level of change, where you're willing to change the national fabric in any substantial way. SE Asia doesn't feel that China actually threatens their existence, so they're taking precautions, but they aren't making those sorts of big changes you need to make when your national survival is at stake.
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Two lines of thought. 1) Personally, I agree that China's military is often overstated as a threat. I think there are plenty of people invested in having a big threat to justify things like defence spending, but frankly always ... and especially this weekend ( http://www.aljazeera.com/news/asia-pacific/2014/09/hong-kong-leader-pledges-talks-amid-protests-20149289332276673.html ), China's military is a much bigger threat to a bigger number of people inside China than outside, so the real conversation should be about that.
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quote:Originally posted by Lyrhawn: I've already read in a number of places that inflation combined with wage growth is putting a big damper on their economy.
Wage growth is awesome, inflation not awesome, but unless inflation is higher than wage growth (which is not the case), people are way better off with wage growth than not. Higher wages allow one to have a better disposable income, buy more and better things, etc. all of which is happening.
Wage growth is a "problem" that we in the middle class in North America would be lucky to have.
quote: It's only being held down by immense state spending on domestic industries.
This isn't necessarily a problem either. If you listen to the Krugman's of the world, the current situation when interest rates are low is precisely when one should borrow and spend lots of money.
Again, we should be so lucky to have massive state spending on domestic industry, especially infrastructure.
quote:Even if the economy keeps humming along for 30 years, they're going to get crushed by the weight of having to care for their elderly.
This doesn't make sense either, but these explain this better than I can.
quote:In terms of being able to support a rising population of dependents, it is important to keep productivity growth in this picture. China's economy had been growing at the rate of 10 percent a year. Even if this slows to 7 percent as many predict, it will allow workers to enjoy much higher after tax income even if an increasing portion of their wage is diverted to supporting China's elderly population.
The arithmetic here is simple. If wages rise in step with productivity growth, then after 20 years wages will have risen by 287 percent. Even if the tax burden on workers increased by 20 percentage points over this period they would still have far more after-tax income than they had when the dependency rate was lower and the economy was less productive.
What is especially bizarre is that the obsession with the prospect of a declining population takes no notice of the horrible pollution problem that China faces in Beijing and other major cities and also the problem of global warming. A declining population will help to directly address both problems. The fact that China slowed its population growth was an enormous service to humanity.
quote:These assertions are wrong on their face. According to the International Monetary Fund, China's per capita income has increased by 4000 percent since 1980. This means that it easily has the ability to support both its retirees and its working population at standards of livings that are far higher than they would have seen in the recent past. The impact of this extraordinary growth rate dwarfs the demographics associated with the one-child policy.
If there are problems supporting China's elderly then it is due to too much money going to the wealthy. The focus on the demographics is mistaken and misleading.
In brief, if China wasn't being "crushed" by the elderly back in the 80s before recent economic growth, than it certainly isn't going to be be crushed when it has more than 4000% as much money to support them now. The increase in the elderly is simply swamped by the increase in real incomes and increased productivity.
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quote:Originally posted by Lyrhawn: Neither of those things are probably existential threats, but that doesn't mean threats below that of an existential one do not require an armed response. What they're really getting at is a different question entirely: What constitutes a proportional response?
Hell if I know, but you can be pretty sure that the CCP wants to have some opportunity to be on that island at some time at which nobody else happens to be present on it, at which point they will constantly refrain some byzantine nonsense about how it was obviously always theirs no takebacks
I do not envy the soldiers stationed on those crappy little islands
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quote:Wage growth is awesome, inflation not awesome, but unless inflation is higher than wage growth (which is not the case), people are way better off with wage growth than not. Higher wages allow one to have a better disposable income, buy more and better things, etc. all of which is happening.
Only if they diversify their economy. Much of their growth has been built upon cheap manufacturing exports. If wages increase too much, they'll chase those jobs away. It's already started happening, albeit slowly. The more wages grow, the less attractive China is as the world's mass producer of consumer goods. So yeah, wage growth is great if it lights a self-sustaining domestic economy, but what happens when fewer foreign dollars are coming in? Wage growth, in the abstract, is fantastic. Good for them and the quality of life increases it brings. But if factories start closing, then what? Maybe that won't happen, or won't happen in a way that really stings them, but Chinese factories really only have two major things that make them more attractive than anything else. 1. Low labor costs, 2. Fast adaptability and tooling. They can get up and running with a new product or a change much more quickly than most other places. But if labor there (plus transportation for trans-Pacific shipping) becomes more expensive, then I don't think that second thing is enough to keep them above other low labor cost nations nearby, or from just bringing manufacturing back to Western countries.
quote:This isn't necessarily a problem either. If you listen to the Krugman's of the world, the current situation when interest rates are low is precisely when one should borrow and spend lots of money.
Again, we should be so lucky to have massive state spending on domestic industry, especially infrastructure.
Agreed. I think most of China's money isn't coming from loans though, it's coming from foreign currency exchange imbalance. What happens when that wellspring of funds starts to dry up? It gets back to the previous point I was making. If they have a self-sustaining system, then sweet, it's not a problem. But does anything think China's economy would be humming along if they didn't have a several hundred billion dollar trade imbalance?
If that money isn't in danger, then again, sweet, but it seems like as the labor market in China evolves, they're subject to the same dangers that anyone who relies on cheap labor for the bulk of their GDP suffers from.
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quote:Originally posted by Lyrhawn: If wages increase too much, they'll chase those jobs away. It's already started happening, albeit slowly. The more wages grow, the less attractive China is as the world's mass producer of consumer goods.
This seems contradictory to me. If it was the case that jobs are being "chased away" then there would be no wage growth. There would instead be wage decreases and China would naturally be more competitive for low cost-labour again. However, this doesn't seem to be the case. Instead, the fact that there is wage growth indicates that labour IS under demand. It may be the case that manufacturing is not where this is occurring and that services is accounting for the growth, but this is a good thing.
quote:
quote: Again, we should be so lucky to have massive state spending on domestic industry, especially infrastructure.
Agreed. I think most of China's money isn't coming from loans though, it's coming from foreign currency exchange imbalance.
I don't think this is the case. Remember, the whole point of the foreign reserves is that they are formed when foreign currency enters the country to buy Chinese goods. The government buys them up with RMB to keep the value of foreign currency high.
If it was the case that they were selling reserves for investment, than the opposite would occur, the RMB would be higher than expected and the USD would plummet.
No, I'm fairly certain that Chinese infrastructure loans (within China at least) are denominated in RMB.
quote:Originally posted by Lyrhawn: ... Much of their growth has been built upon cheap manufacturing exports.
Also, this is probably getting quickly out of date.
quote:Similarly, factory output and investment in fixed assets, which have been losing steam over much of the past year, continued to do so in December, the data showed.
But retail sales, which give a sense of how spending among China’s 1.3 billion inhabitants is holding up, have remained relatively firm, and notched a gain of 13.6 percent in December. The data, said Yao Wei, China economist in the Hong Kong office of Société Générale, was a bright spot in the statistics released Monday. ... Official figures released by the statistics office on Monday put the increase in the disposable income of urban residents at 9.7 percent last year, or 7 percent when factoring in inflation. Rural residents’ net income rose 9.3 percent when adjusted for inflation.
quote:China's level of consumer spending still remains far below America's. But it is growing much faster in percentage terms. It may even be growing faster in absolute terms. If government outlays are added to household expenditures, China probably added more than any other economy to global consumption last year, as it did in 2012 and 2011 (see the post by Steven Barnett of the IMF here).
Two things 1) This should not be a surprise. All that extra pollution can't be just from exports, there be massive consumption growth. 2) Holy crap, we could use a 14% growth in retail sales ... or that 7% increase in disposable income.
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Lots of countries have problems. The United States has problems, the question of whether these problems are unmanageable or crippling is what tends to be largely sensationalism.
Read The Rise and Fall of the Great Powers and I think you'll see plenty of historical parallels. Mucus's posts have been pretty informative and largely align with what I feel.
I also don't really see why China should care all that much about a number of the smaller nations around it arming themselves by some small amount (and in relative terms its very small). China isn't going to attempt a land invasion of any of them, none of them are ever going to attack them and the number that could meaningfully contribute to a naval confrontation are few and rife with historical cooperation problems (cough Japan cough) or have reasons to be friendly and careful with its relations with China (Korea).
Plus weapons bought can be weapons later mothballed once circumstances *again* change. Its a calculated risk and one I wouldn't find alarming, but would in fact be expecting.
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quote:China isn't going to attempt a land invasion of any of them, none of them are ever going to attack them and the number that could meaningfully contribute to a naval confrontation are few and rife with historical cooperation problems (cough Japan cough) or have reasons to be friendly and careful with its relations with China (Korea).
No? What about that oil rig they built in Vietnam's waters? China doesn't have to invade if it can simply build and look at another country and say, "What are you going to do about it?" Countries are arming themselves precisely because they do see China throwing it's weight around. They might not be punching you in the face, but you can see they are taking a mixed martial arts class and you've had scraps with them in the past.
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For my part, I think China has lots of problems that are going to get a lot of people killed.
But Blayne is not totally incorrect in that the problems that pundits like to focus on aren't really the the ones that are important. There are dozens of problems like climate change, local pollution, food safety, Muslim terrorists, and even simple traffic accidents that are going to get a lot more people killed than island disputes.
(Want to save some lives? Promote some seat-belts in China or buy some toilets in India)
I think people, especially pundits, like to confuse what they want to happen or what their audience wants to happen with what will happen. For my part, I'm at the point where I'd like China to go through a revolution, but that doesn't mean that I think it's going to happen or that I think the CCP is doing everything wrong.
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Is there any sort of Green movement underway in China?
I know the government has invested in renewables, quite a bit, in fact, but it's emissions and runoff I think that are doing more damage, and putting up a few wind turbines won't fix that.
One of China's strengths is the speed with which it attacks problems...once it decides to attack.
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china's biggest problems, i think, are ecological issues and corruption. anything else that's going to happen stem from those two things (including the ever-seeded latent risk of a huge economic collapse, which may or may not happen, based off of things i've mentioned before like the giant empty show-cities, or the problems the ccp has with the collapse by degrees of their information control and firewalls), and few others in the world besides the chinese themselves will have a hand in how those issues eventually get managed.
quote:Originally posted by Lyrhawn: Is there any sort of Green movement underway in China?
Most organization occurs at the NIMBY level, there have been a lot of middle-class protests that have successfully moved out things like chemical plants.
However, no sizeable non-governmental organizations exist for the obvious reasons. (Unless you count Hong Kong of course)
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I believe China's been doing more to promote nuclear power and transitioning to green economics more than a lot of countries.
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quote:Originally posted by Elison R. Salazar: I believe China's been doing more to promote nuclear power and transitioning to green economics more than a lot of countries.
Sure. More specifically than Zimbabwe, Senegal, Myanmar, Sri Lanka, Uruguay, Belize, Rwanda, Bulgaria, Haiti, Cuba, Tahiti, Greece, Nepal, Bangladesh, Syria, Afghanistan, Algeria. Just to name a few.
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quote:Originally posted by Elison R. Salazar: And the United States.
Debatable.
On the manufacturing side, most certainly. Cheap Chinese solar cells have been a major reason why the price of solar installed per kwh has dropped so dramatically in recent years. But the economics, long term, will turn on technology more than mass manufacturing (well, I guess they'll work hand in hand, eventually).
Big fields of solar cells are probably not going to be the wave of the future. Either small fields of incredibly high efficiency cells, or smaller arrays on houses and businesses are probably the future of solar. Industrial scale solar isn't going to be more widespread until we invent a giant industrial scale efficient battery to rid renewables of their biggest problem: irregularity. Even more than cost, I think this is their biggest problem. The US is likely to solve that problem, not China.
Most major advances in wind power have come from the US and Europe, GE in the US and a couple companies in the Scandinavian region I believe. Most major efficiency gains in solar power have also come from the US.
China is doing some pretty cool stuff, and they're right up there in the top five countries for installed capacity of all sorts of renewables. But they're also one of the most heavily polluting country in the world, and the world's largest CO2 emitter (not per capita, of course). And they've yet to establish a domestic R&D arm to make big breakthroughs on renewables (though they're still working on stuff, to be fair).
So are they better than the US on this? No, I don't think so. But I don't think they're that far behind when you take everything into account.
I'm not sure if they're better on nuclear either. The West isn't super keen on nuclear at the moment. And correct me if I'm wrong on this, but I feel like most of the major research done on next gen nuclear facilities is coming out of the West as well.
So again, it's debatable.
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Research I think is interesting, but reality (as in what people are using now) and action (future capacity) is more relevant.
So let's look at the specifics.
Current:
quote:... they're right up there in the top five countries for installed capacity of all sorts of renewables
Specifically, for totals China is far and away #1 when it comes to wind and hydroelectric. It's #2 in solar (following Germany). They're only #6 for nuclear with a big "but" in the next section.
Overall, China is in fact #1 for renewables as a total.
Some of this could change obviously, but the IEA reports in this handy report that China is on-track to build 750 TWh of renewables by 2018. The US is only going to do 150 TWh.
The crazy thing is that not only is that far and away the largest in total (as you'd expect) its also a larger growth per capita (i.e. the US falls short even if you multiply its growth by 4.3).
Ultimately, I think that the most embarrassing thing for the US in this arena is not that China is the leading between the two both currently and in the near future, but that we're even having this conversation.
Adjusted for PPP, per capita China only has about a fifth of the income of the US. China is literally poorer than Mexico. Imagine if the US were being out-shone in renewables by Mexico, but somehow this is acceptable with China. Why is this even a competition?
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China is building something like 5-times more nuclear reactors than the States, 40% of the world's total under construction.
That's just plain crazy due to the water shortages and that nuclear reactors are the kind of thing where you need the highest safety standards. Building large numbers of wind turbines and solar panels is actually a whole lot safer because if one breaks, you can just replace it. If a nuclear reactor breaks in China ... there goes like a million people.
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