The Emerging China Red Menace Red MenaceOR. Friendly Global Capitalist Trading Partner?
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Transcript of The Emerging China Red Menace Red MenaceOR. Friendly Global Capitalist Trading Partner?
Background – 300 years of Background – 300 years of foreign dominationforeign domination
Opium Wars 1842-1858Opium Wars 1842-1858 Boxer Rebellion 1900Boxer Rebellion 1900 Japanese invastion 1937Japanese invastion 1937 Communist Victory 1949Communist Victory 1949 Tibet invasion 1950Tibet invasion 1950 ““Great Leap Forward” 1959Great Leap Forward” 1959 Cultural Revolution 1966Cultural Revolution 1966
The Emerging Threat?The Emerging Threat?
The economic threatThe economic threat– China holds a large part of U.S. public & China holds a large part of U.S. public &
private debt (1.4-2 trillion dollars)private debt (1.4-2 trillion dollars)– Our inter-reliance on trade with each otherOur inter-reliance on trade with each other– Foreign ownership within the United StatesForeign ownership within the United States– The cultural distortion of AmericaThe cultural distortion of America
Chinese Share of Global Chinese Share of Global GDPGDP
China is the world’s China is the world’s largest producer of largest producer of coalcoal
China is the 2China is the 2ndnd largest consumer largest consumer of energyof energy
Chinese share of Chinese share of global GDP global GDP estimated to pass estimated to pass the US in 2039the US in 2039
Growing US/Chinese TradeGrowing US/Chinese Trade
China’s China’s exports to exports to the US have the US have soared from soared from $39 billion $39 billion to $197 to $197 billion in the billion in the last 20 last 20 yearsyears
Chinese Share of the US Chinese Share of the US EconomyEconomy
China currently China currently holds about $500 holds about $500 billion in US billion in US treasury billstreasury bills
Japan still holds Japan still holds twice that manytwice that many
Trade imbalance Trade imbalance can be looked at can be looked at two waystwo ways
Chinese Currency ValueChinese Currency Value Chinese currency is Chinese currency is
currently 6.9-7.5 currently 6.9-7.5 YuanYuan to the dollar to the dollar
Most experts believe Most experts believe that is that is approximately 30% approximately 30% undervalued/i.e. undervalued/i.e. $2000 on a car$2000 on a car
Impact on trade? Impact on trade? Wages? Wages?
A limited float A limited float announced 2012announced 2012
China: Rich or Poor?China: Rich or Poor? China has grown China has grown
at 10% per year at 10% per year growth rate for growth rate for 30 years30 years
China has moved China has moved 400 million 400 million people out of people out of poverty (<$1 per poverty (<$1 per day)day)
China has China has quadrupled the quadrupled the average incomeaverage income
China: Rich or Poor?China: Rich or Poor? More than 1 More than 1
billion Chinese billion Chinese still below the still below the world poverty world poverty lineline
150 million live 150 million live on less than $1 on less than $1 per dayper day
Unemployment Unemployment above ten per above ten per cent and growingcent and growing
Inequality and DisparityInequality and Disparity
One of the most economically One of the most economically unequal societies in the worldunequal societies in the world– The growing urban-rural gapThe growing urban-rural gap
The “two-class” systemThe “two-class” system The call for reform – protests and The call for reform – protests and
unrest have become commonplaceunrest have become commonplace
China and Global WarmingChina and Global Warming
Failure to initially join the Kyoto ProtocolFailure to initially join the Kyoto Protocol China passed the U.S. in December of China passed the U.S. in December of
2007 as the world’s largest emitter of 2007 as the world’s largest emitter of greenhouse gasesgreenhouse gases
China is the world’s second largest oil China is the world’s second largest oil consumer with crude oil imports consumer with crude oil imports increasing at 18% per year. China’s increasing at 18% per year. China’s demand is driving up global crude demand is driving up global crude pricesprices
Product SafetyProduct Safety March 2007 – Warnings and recalls on March 2007 – Warnings and recalls on
Chinese produced pet foodChinese produced pet food May 2007 – Chinese toothpaste (some May 2007 – Chinese toothpaste (some
counterfeit) found to contain poisonous counterfeit) found to contain poisonous chemicalschemicals
June 2007 – Chinese toys discovered to June 2007 – Chinese toys discovered to contain high levels of lead paintcontain high levels of lead paint
July 2007 – Chinese tires found to have July 2007 – Chinese tires found to have major defectmajor defect
20% of all Chinese products produced for 20% of all Chinese products produced for domestic consumption were declared domestic consumption were declared substandardsubstandard
Chinese Chinese Military Military
ExpansionExpansion Chinese interventions Chinese interventions
in Vietnam (1979) & in Vietnam (1979) & the Spratley/Paracel the Spratley/Paracel IslandsIslands
Influence with North Influence with North KoreaKorea
Military spending Military spending increases have kept increases have kept pace with GDP growthpace with GDP growth
US 600 B v. China 100 US 600 B v. China 100 BB
Quemoy and MatsuQuemoy and Matsu
•Chinese declaration to intervene if Taiwan declares independence
•Truman & the Sino-American Mutual Defense Treaty -
•“The attack upon Korea makes it plain beyond all doubt that communism has passed beyond the use of subversion to conquer independent nations and will now use armed invasion and war.”
Chinese DemocracyChinese DemocracyTienanmen Square 1989Tienanmen Square 1989
May 1989, over a May 1989, over a million protesters million protesters gather over what gather over what started as a protest started as a protest on dorm foodon dorm food
June 3June 3rdrd 1989, 1989, hundreds of hundreds of students gunned students gunned down or arrested down or arrested
Chinese DemocracyChinese DemocracyTopicsTopics RangeRange
ResultsResultsWorld Democracy overall rank1-1501-150 126126Political Rights 1-71-7 77Civil Liberties 1-71-7 66Press Freedom 0-1500-150 135135Corruption 0-1450-145
5757
Chinese Development v. Chinese Development v. Chinese DemocracyChinese Democracy
In 2003, 3 In 2003, 3 million people million people participated in participated in 58,000 protests58,000 protests
The number The number increased to increased to 74,000 in 200474,000 in 2004
Can you have Can you have development development without without democracy?democracy?
The 2008 Summer OlympicsThe 2008 Summer Olympics
Opportunity for Opportunity for influence missed?influence missed?
Chinese oil Chinese oil purchases in Sudanpurchases in Sudan
Chinese spending Chinese spending over 40 billion on over 40 billion on Olympic Olympic infrastructureinfrastructure
Pollution during the Pollution during the OlympicsOlympics
DiscussionDiscussion
Is the United States entering a pact of Is the United States entering a pact of mutually assured destruction with mutually assured destruction with China by linking the two economies so China by linking the two economies so closely?closely?
Is China a threat militarily? Is China a threat militarily? How could the United States counter How could the United States counter
any potential military threat posed by any potential military threat posed by China? China?
The Discussion Strikes The Discussion Strikes Back…Back…
So far, China has been successful in So far, China has been successful in suppressing the discontent from suppressing the discontent from much of its rural population. Will much of its rural population. Will China be able to continue this China be able to continue this successfully in the future?successfully in the future?
Can a nation liberalize economically Can a nation liberalize economically without liberalizing politically? without liberalizing politically?