Thursday, June 17, 2010

Deadly Embrace? US-China Relations. Notes from US Army War College


This post is a work in progress and will be updated as I read through additional notes and double check facts presented during lectures and discussions.

The views expressed in this blog posting are a collective summary of many opinions expressed at the US Army War College.  The War College practices non attribution so I will not provide the source of the opinion.  I share the summary of opinions, as well as my own, to open a dialog with others.  I walked into the US Army War College with my set of facts and beliefs, and walked out adding new facts and some adjustments to my beliefs.

China as a Nation is large and vast.  It's Government is very different from our own.  Nation's are made up of people.  Separating the two, Nation's Government & Politics vs. the People, is challenging but important.

In a fairly heated, dynamic exchange of varying opinions during my study group, it was my turn to speak and I used the technology term "Deadly Embrace" to explain my theory.

Classmate Point of View Expressed:  China would never pull the rug out from under us because it would hurt them (I am paraphrasing).

My Perspective:  I politely and respectfully disagree.  In some regards I believe they have and could damage us economically and politically.

Why I say we are in a "deadly embrace" with China - A very simplified, non technical description:  When two separate computers initiate a transaction that needs the same computer resources, they get locked in a deadly embrace.  The only way to get out of the deadly embrace is to power down both computers.  You have to be careful about who powers down first or if both should go at the same time & you have to be careful about who powers back up first.

I believe our situation with China fits this simplified definition of a "deadly embrace".    We owe them money, we buy their goods, they need our services, we would like to see them improve human rights, we have different points of view on ruling a Nation...

The U.S. has many global advantages and resources but we need to be cautious and strategic about how we develop our relationship with China the next 10 years.


Competitive strengths:  (Source:  Business Week November 10, 2009)
 Innovation - We are still a leader in science & technology
 Top in the Globe for Education - We rank among the best institutions of higher learning
 Committed (mostly) to competition and free markets
 Deep & effective (mostly) capital markets
 Resilient & dynamic

Pollution / Climate Change
Military Modernization
Human Rights
U.S. Capitalism is Under Seige by Protectionism & Populism

1.  Quote:  Mike McConnell, Dir of National Intelligence  Oct 30, 2008

“China is posed to have more impact on the world over the next 20 years than any other country.”

2.  POLLUTION:  China predicted to emit more than double the carbon dioxide emissions of the U.S.  Source:  Energy Information Administration


a.  GDP of the Global Economy is changing very quickly.  $ figures are from IMF.

GDP 2009 (millions of USD):
Rank 1:  US 14,256,275 
Rank 3:  China 4,908,982

b.  Strength in Numbers - Population
U.S.  305 Million
China 1.3 Billion

China population is aging.  By 2050, 1/3 of their population will be retirees

China has focused resources on their Army (PLA) without detracting too much from their economy.  Their official budget more than doubled in less than 10 years!  (Approx $27.9B in 2000 to $60.1B in 2008 USD). 

However, the U.S. still spends more than China on its military if you compare the "official" budgets.  We are not sure how much is spent by China off the official books on the military.

The U.S. has a national debt of $13 TRILLION and it is growing every day.  Our National debt is larger than the economies of the UK, Australia and China combined.

23% of our Debt is Foreign Owned.

The Top 3 Countries and Entities Holding Our Debt (Sources:  Treasury Dept and Defeat the Debt):
What does this have to do with Human Rights?  The U.S. owes China money.  When your own house is not in order, it is hard to lecture others on their issues.  

During the course of the week at USAWC, I learned from the military leaders that attended that a systemic & core reason for unrest and lack of peace in many parts of the world can be attributed to poverty, sub par education & lack of human rights protections.  The Chinese government's track record on Human Rights has had its fair share of issues.  How bold can we be asking them to change their approach when they are one of our main lenders?

As always, I am open to all comments, questions, and suggestions.

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