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China is now seen as rising into ascendancy over the United States as a world economic power.

Does it have the staying power to hold onto this for any long term however? It's power seems to be principally driven by providing manufacturing services to feed consumer demand in Western nations by underpricing Western manufacturing, how long can it effectively maintain that as it's own economy strengthens?

Politically, as the average Chinese person will be exposed to not only luxury goods but witness the extremes of a capitalist class elite forming within communities, how long until political unrest begins to again shake the nation? (a nation that is, after all, basically several nations with differing traditions). Stronger calls for democracy, stronger calls to return to the old ways of hardline communism.

I'm starting to wonder if it's all likely to collapse as soon as it blossoms?

Don't worry, China does under 16% of what the USA produces.

China is in a odd place, for every rich western shot of city people. they are whole ethnic minorities that are poor, in the millions. They have more poor than the usa has people.

The place to watch out for is India. I think they will be the new powerhouse in a few years.

China has a number of serious problems.

1. Demographic time bomb even more serious than that facing Japan, thanks to the one child policy.

2. Potential for serious social unrest caused by inequality and corruption.

3. Dangerous amounts of environmental degradation caused by unregulated industrial development such as the Three Gorges Dams.

Yes, be very concerned....they're training people to fly.




Seriously though, with the growth of their middle-class and upper classes, it's going to become more and more difficult for the Communist party to keep the masses in squallid oblivion. I think if a Tiananmen Square episode happens again, things might go a bit differently next time around.

collapse is all but inevitable as things tend to be cyclical

i just hope the collapse doesnt happen within the next 10 years or so as that implosion will not mean a single good thing for anyone in the civilized world right now

Kilkrazy wrote:China has a number of serious problems.

1. Demographic time bomb even more serious than that facing Japan, thanks to the one child policy.

2. Potential for serious social unrest caused by inequality and corruption.

3. Dangerous amounts of environmental degradation caused by unregulated industrial development such as the Three Gorges Dams.

Agreed.

Just keep in mind that their culture doesn't lend itself as much to independence and rebellion as ours.

Power is not a unitary concept. China will more than likely surpass the American economy sometime after 2020 but before 2050 depending on who you follow, but the United States will continue to be the world's military hegemon.

China also has a very bizarre situation in that their economy is becoming increasingly more liberal to keep pace with the world, but their government still holds on to the one party 'communist' ideal. These two factors will see some interesting developments in internal Chinese politics.

*Shrugs* for anyone in my generation, make sure your kids know at least one other language. The time of American hegemony is in a slow decline. The BRIC powers have a bone to pick with the international system.

Blacksails wrote:The BRIC powers have a bone to pick with the international system.

Well, at least the B, I, and C. The R isn't looking so hot going forward, and is already pretty well integrated due to being a Sec Council permanent member.

agnosto wrote:Yes, be very concerned....they're training people to fly.




Seriously though, with the growth of their middle-class and upper classes, it's going to become more and more difficult for the Communist party to keep the masses in squallid oblivion. I think if a Tiananmen Square episode happens again, things might go a bit differently next time around.

OMG they have invisible trains!!!!

dogma wrote:

Blacksails wrote:The BRIC powers have a bone to pick with the international system.

Well, at least the B, I, and C. The R isn't looking so hot going forward, and is already pretty well integrated due to being a Sec Council permanent member.

Russia is the odd one in the BRICs. However, it is, realistically, the only one of the four that will achieve a national standard of living comparable to the modern western states and will have achieved some degree of internal stability. Brazil, India, and China, all have significant internal hurdles to conquer, despite their surreal economic and military growth, whereas Russia has less in the way of internal issues, but is growing at a slower rate than the other three.

Of greater importance to China, and the BRICs in general, is the eventual degredation of their relationships as BRIC powers in the future, and the conflicts between them that inevitably arise. China, India, and Russia are all seeking to become regional powers before claiming to be international powers, however, the three all have the same backyard. Russia and China share a lengthy border, and Russia is already worried about China cultural dominance in the Siberian and Eastern Russian regions. India and China share a border, and both nations are striving to defend their interests in the same naval zone of operations.

Though Russia may appear to be well integrated, especially as a P5 member, the opposite is more true. Russia resents American dominance in the international community, and still clings desperately to the power it once had. China and Russia have fostered an increasingly stronger relationship in response to American hegemony, claiming the BRIC powers are (or will be) equals. Brazil's the only one without nukes, but they've demonstrated the capability to make them, so being a threshold state isn't terrible.

I dunno, will China take over the world? No. Will the BRIC nations together do it? No. Will the Americans always be top dog? Also no. What we are witnessing is the emergence of a true multipolar system.

Isn't it BRICS now?

South Africa either has already joined or is joining soon. I think I read that in the Economist...

BRICS includes South Africa, though it still has a long way to go if we are talking about GDP.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

Nice to see an African country getting "up there".

As I've said here a few times, the projections of Chinese growth extending out for decades and overtaking the US is extremely fanciful, at best.

The state planned economy is great for industrialising, because the state can just pick up raw resources in labour and materials and just pile them into more and more factories and watch GDP grow by 10% each year. The Soviets achieved the same thing.

Don't know if you noticed though, but once industrialisation finished then Soviety economic growth stopped, almost came to a complete standstill. Meanwhile the Western, democratic, liberal powers kept growing, moved past an industrial economy into highly automated economies. We left the Soviets for dead.

The key being that we had much more free communication, far better forums for expressing ideas. We also had an open market for capital. These two things are the key to driving innovation in industry.

Once China has utilised every available worker, maximised the amount of resources it can bring in (and with commodity prices constantly rising as they are this point may be soon) then future growth will need to come from doing things more efficiently, and that needs innovation. The state planned economy does not do this well, and unless China opens itself up, grants greater rights of communication, and puts in the regulation to make the capital market open (and not the nepotistic collection of backroom deals and government corruption it is now) then China will stagnate.

And, well, a little freedom is a dangerous thing. Especially if the economy is stagnant at the time.

Blacksails wrote:
Russia is the odd one in the BRICs. However, it is, realistically, the only one of the four that will achieve a national standard of living comparable to the modern western states and will have achieved some degree of internal stability.

Are we talking about the Russia that is deriving an increasing amount of its GDP from mineral exports (generally damning to any increase in standards of living, just look at the Middle East), incurring more daily deaths than births, and suffering from an ever shrinking number of people of working age (that's where most of its annual deaths are)?

I'm not sure why you think they have the best chance at achieving Western standards of living when they're HDI is only .5 higher than China's, and .2 higher than Brazil's.

Blacksails wrote:
Brazil, India, and China, all have significant internal hurdles to conquer, despite their surreal economic and military growth, whereas Russia has less in the way of internal issues, but is growing at a slower rate than the other three.

I disagree completely. With the exception of India, Russia has by far the worst internal, political future (mostly the items mentioned above, but others as well). Compare this to China, which has demographic issues of its own, but also a stable, highly popular government with strong, non-mineral economic growth, public education, a state welfare system, far better upward mobility scores, and a far better PPP adjusted GDP per capita. Similarly, Brazil has a popular government, strong non-mineral growth, effective public education system, good upward mobility scores, and a stronger PPP adjusted GDP when compared to Russia.

Blacksails wrote:
Of greater importance to China, and the BRICs in general, is the eventual degredation of their relationships as BRIC powers in the future, and the conflicts between them that inevitably arise. China, India, and Russia are all seeking to become regional powers before claiming to be international powers, however, the three all have the same backyard. Russia and China share a lengthy border, and Russia is already worried about China cultural dominance in the Siberian and Eastern Russian regions.

India and China share a border, and both nations are striving to defend their interests in the same naval zone of operations.

Blacksails wrote:
Though Russia may appear to be well integrated, especially as a P5 member, the opposite is more true. Russia resents American dominance in the international community, and still clings desperately to the power it once had. China and Russia have fostered an increasingly stronger relationship in response to American hegemony, claiming the BRIC powers are (or will be) equals.

I misspoke earlier, China and Russia are both well integrated into the international community, both due to their respective P5 memberships, and their respective areas of economic significance (arms and minerals for Russia, consumer goods for China). The fact that neither one gets along with the US especially well doesn't indicate that they are somehow outside the international system.

Blacksails wrote:
Brazil's the only one without nukes, but they've demonstrated the capability to make them, so being a threshold state isn't terrible.

Brazil and Inida, on the hand, have legitimate grievances when it comes to having an international voice. India, in particular, is dependent on the US and the UK for many of its more tangible diplomatic actions. Brazil has fewer problems, excepting those with the security council, due to its near total regional dominance (the only real challenger is Argentina, maybe Chile as well).

Blacksails wrote:
I dunno, will China take over the world? No. Will the BRIC nations together do it? No. Will the Americans always be top dog? Also no. What we are witnessing is the emergence of a true multipolar system.

Or non-polar, depending on how you view the relevance of the military.


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Albatross wrote:Isn't it BRICS now?

South Africa either has already joined or is joining soon. I think I read that in the Economist...

You know, if we all get behind Egyptian growth, we can call it BRIE and be forever reminded of delicious cheese.

Or England could take one for the team, dissolve the UK, and cause enough economic degradation to be considered "developing".

dogma wrote:You know, if we all get behind Egyptian growth, we can call it BRIE and be forever reminded of delicious cheese.

I would suggest replacing South Africa with Argentina. Then form a former-Soviet Satellite coalition with Belarus, Romania, Armenia, Khazakhstan, and Azerbaijan to manufacture party supplies.

They can call them BRICA BRAKA firecrackers.

Melissia wrote:Just keep in mind that their culture doesn't lend itself as much to independence and rebellion as ours.

Chinese history does not support this statement.

Agreed with Manchu - their cycle of internal reformation, rebellion and war has led to China having one of the most colourful and diverse backgrounds of all the nations on earth. A little bit of study on the topic will really open your mind if you were unaware of this - I love Chinese history.

That statement is about as incorrect as it could possibly be - although the popular world view of American culture at least makes the sentiment understandable.

Arctik_Firangi wrote:Agreed with Manchu - their cycle of internal reformation, rebellion and war has led to China having one of the most colourful and diverse backgrounds of all the nations on earth. A little bit of study on the topic will really open your mind if you were unaware of this - I love Chinese history.

That statement is about as incorrect as it could possibly be - although the popular world view of American culture at least makes the sentiment understandable.

To be fair China spends a fair bit of effort trying to give that impression as well.

What impression is that? That they are diverse, or that they are not?

I'm not really very up-to-date with contemporary Chinese politics and world views - I'm just a fan of their dynastic history.

Arctik_Firangi wrote:Agreed with Manchu - their cycle of internal reformation, rebellion and war has led to China having one of the most colourful and diverse backgrounds of all the nations on earth. A little bit of study on the topic will really open your mind if you were unaware of this - I love Chinese history.

Indeed, belief in the Mandate of heave tended to result in a fairly regular switching in and out of dynasties, however the cultural core of the nation always remaained relatively stable.

I am of the opinion that China's growth is unsustainable, they had a huge umobilized population, and lot of untapped resources, and now they're tapping both at a high rate. Its economic growth is exploding up, but it can't do that forever, no matter what its government tries to do. Sooner or later it will hit the point when all of its production resources are committed, and it will have to begin life as a post-industrial state, like most of the West. The only alternative is territorial expansion to bring in more resources and population to mobilize, but that possibility is so far out there in terms of realism, that we might as well disregard it.

China will be a major player in the future...the question is whether or not they can make the jump from an industrial economy to a more Western economy. Whehter or not they can remains to be seen.

I do agree with dogma though that Russia is the least likely to become fully Westernized. The Chines may have to worry about Tibet somewhat, but the Russians have dozens of small Muslim states along their southern border that failed to get out when the USSR collapsed, and are still trying. Civil unrest in the Russian hearland may be relatively minimal, but unrest in the south will be, and remain a significant factor.

I think the 'China will stagnate' group are locked into some wishful thinking. As resources shortages begin to bite harder it is them not us who will have the best chances of survival.

The benefit of a western open free market economy only holds out when resources are plenty, a more centralised society can better handle the bad times. China is thinking in a far longer term than western nations do, and it is showing.

China's economy is based on manufacturing, while the West focuses more on services. Resource shortages will hit them hardest, especially as they are not devoting the energy to R&D to make more efficient use of more limited resources.

ChrisWWII wrote:China's economy is based on manufacturing, while the West focuses more on services. Resource shortages will hit them hardest, especially as they are not devoting the energy to R&D to make more efficient use of more limited resources.

Rubbish(to be emphatic, but not intentionally rude). Why do I say this?

Because China owns most of Africa. It's not very well known, but most of the petty dictatorships out there have plenty going into their Swiss Bank Accounts from Beijing. All kinds of interesting behind the scenes resource agreements have been made, and you find a lot of shadowy Chinese 'businessmen' taking over the various railways adn whatnot out there, who are strangely reluctant to be caught on camera.

The West refuses to deal with Africa on the grounds that generally speaking, they have nothing we want, as we're no longer manufacturing nations. However, China's in a different position, and has been buying up mines, arable land, and mineral wealth there left right and centre.

I was making the assumption that we'd had some kind of global resource shortage. All of Beijing's land and mines out in Africa will mean nothing if there's barely anything left to get out. Granted, if the situation got that bad we'd all be screwed anyway, so you're right to the extent that resource shortages would affect the West first, but I still hold that they will affect China more, especially in the long run.

ChrisWWII wrote:I was making the assumption that we'd had some kind of global resource shortage. All of Beijing's land and mines out in Africa will mean nothing if there's barely anything left to get out. Granted, if the situation got that bad we'd all be screwed anyway, so you're right to the extent that resource shortages would affect the West first, but I still hold that they will affect China more, especially in the long run.

Soooo....if the world runs out of of resources, we're all screwed, but the Chinese more so?

I'm sorry, I don't see that connection. If the Chinese lose the capability to manufacture, it means the West not only loses the capability to manufacture, but the lose the capacity to acquire processed goods.

In the event of a global resource shortage, I'd say China and Russia are actually better placed to deal with it than Europe or the US, simply BECAUSE they have access to more resources. You're assuming that when this 'global resource shortage' hits, China will still want to keep exporting to feed their economy. In such a case, the Chinese would export less and less goods, for more and more Western cash, as Western demand would outstrip Chinese supply, and the Chinese would be able to call first dibs on everything. In that regard, they're actually better placed than the West.

Controlling the raw goods, and the means of production far outstrips controlling the demand in a resource shortage. Especially since 'demand' in a shortage isn't necessarily something that can be controlled.

Come on Chris, I expect better than you of this!

The fact that I'm on my second all nighter in a row may have something to do with my failed logical faculties right now...rereading what I said, I'm wondering, 'wait, how the HELL does that make sense?!'

China is currently trying to restrict the number of loans given out in order to prevent inflation in the short term. The costs of the benefits they've been reaping are starting to catch up with them, and they'll slow down.

Arctik_Firangi wrote:What impression is that? That they are diverse, or that they are not?

I was looking less at diversity, and more the idea that China has always been a peaceful empire. It's not true, Chinese history is full of carnage.


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Orlanth wrote:I think the 'China will stagnate' group are locked into some wishful thinking. As resources shortages begin to bite harder it is them not us who will have the best chances of survival.

What's wishful thinking about thinking it likely that a country's economy will stagnate? I don't want the climb of a billion people out of poverty to slow down or stop.

Second up, I think it is likely because China is not the first state planned economy to make very rapid progress through industrialisation, then stagnate. That's the history of every state planned economy, and I've seen nothing that indicates China will be magically any different.

The benefit of a western open free market economy only holds out when resources are plenty, a more centralised society can better handle the bad times.

I think you'll find that adaptability is the hallmark of a de-centralised economy, not a state planned one.


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Ketara wrote:In the event of a global resource shortage, I'd say China and Russia are actually better placed to deal with it than Europe or the US, simply BECAUSE they have access to more resources. You're assuming that when this 'global resource shortage' hits, China will still want to keep exporting to feed their economy. In such a case, the Chinese would export less and less goods, for more and more Western cash, as Western demand would outstrip Chinese supply, and the Chinese would be able to call first dibs on everything. In that regard, they're actually better placed than the West.

You can't just opt to export less and import less. Economies are incredibly sophisticated thing, you can't just turn faucets on and off.

China is dependant on Western demand. In time they will be able build a domestic economy that can sustain their growing industry, but that will take a decade or more, and will only begin once Chinese authorities begin to allow it to develop. In the meantime China will be very dependant on demand in Western countries - when the GFC hit China had 40 million newly unemployed, there was rioting in the streets and people died.

That's what life is like when a large portion of your population is on the edge of poverty. Any shock to the system will have massive impacts through their society.


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Ketara wrote:The West refuses to deal with Africa on the grounds that generally speaking, they have nothing we want, as we're no longer manufacturing nations. However, China's in a different position, and has been buying up mines, arable land, and mineral wealth there left right and centre.

What? Are you saying there's no Western money in resource extraction in Africa. Because that's just plain wrong.

sebster wrote:

Ketara wrote:In the event of a global resource shortage, I'd say China and Russia are actually better placed to deal with it than Europe or the US, simply BECAUSE they have access to more resources. You're assuming that when this 'global resource shortage' hits, China will still want to keep exporting to feed their economy. In such a case, the Chinese would export less and less goods, for more and more Western cash, as Western demand would outstrip Chinese supply, and the Chinese would be able to call first dibs on everything. In that regard, they're actually better placed than the West.

You can't just opt to export less and import less. Economies are incredibly sophisticated thing, you can't just turn faucets on and off.

I think you'll find you can. Governments have oft times in history decided to stop exporting to a particular region. Indeed, economic sanctions are supposedly one of the main weapons the West has to impose on various dictatorships around the world. There are also other ways of influencing imports and exports, from heavily taxing certain goods, to banning them altogether.

I'm pretty sure Britain isn't currently exporting arms to Col. Gaddaffi, no? Yet we were a short while ago! *shock horror* A perfect example of how when the situation demands, a country can cease exporting.

China is dependant on Western demand. In time they will be able build a domestic economy that can sustain their growing industry, but that will take a decade or more, and will only begin once Chinese authorities begin to allow it to develop. In the meantime China will be very dependant on demand in Western countries - when the GFC hit China had 40 million newly unemployed, there was rioting in the streets and people died.

That's what life is like when a large portion of your population is on the edge of poverty. Any shock to the system will have massive impacts through their society.

We're talking about a hypothetical future in which there's a global resource shortage, not the current economic situation. As such, claiming that just because China is dependent on Western Demand for goods in a time of prosperity is no basis for concluding China will be in a poor position in out future hypothetical scenario.

If China controls more resources than the West in a time of global shortage, China is better placed than the West economically. It's quite simple. I don't understand how it can be viewed any other way. Controlling resources in a time of resource shortage equals more economic power. How does needing resources and NOT possessing them place one in a position of power?


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Ketara wrote:The West refuses to deal with Africa on the grounds that generally speaking, they have nothing we want, as we're no longer manufacturing nations. However, China's in a different position, and has been buying up mines, arable land, and mineral wealth there left right and centre.

What? Are you saying there's no Western money in resource extraction in Africa. Because that's just plain wrong.

I would however, point out that many resources used in the Western computer industry do indeed come from Africa. (Ha! I knew I could come up with a more intelligent argument after sleeping! ) I would argue that even though China would posess a stronger claim to access to those mineral than the West in a time of resource shortage, such a claim would be irrelevant. Why? It'd be a loss to both parties.

If the Western economy takes a hit due to resource limitations, the Chinese economy will suffer as well. As a manufacturing based economy, they are dependent on continued export, and while they may choose to stop exporting at any time, such an action would likely go the same road as the US O-Grab-Me Embargo during the Napoleonic Wars. Granted, the West will feel it if China chooses to stop exporting to them, but the Chinese will feel it even more. China wlill have a strong position, no one denies that, I definitely don't, but the fact remains that China is an industrial nation highly dependent on exports (ooh, essay idea! 'Is China a Mecantillist Economy?'), and it would harm their own interests to try and abuse the resource shortage.

Also, we have to note that if the situation got so bad that China had a crippling control of the worlds resource markets, you can not deny that the West may be tempted to use its military superiority to secure their own interests, especially in the African mines. It's definitely not a likely scenariou, but its one to keep in mind, especially since anxiety about using military force will only go down as desperation increases.