A big economic subject in our country. For anyone interested in knowing more about China, this is a good starting link:

http://www.asianinfo.org/asianinfo/c...ro-economy.htm

China's central planning is very impressive, as is their ability to absorb foreign investment capital without giving up the wheel. Our universities and others around the world did an excellent job of preparing China's brains to develop and execute the changes they've experieced in a relatively short period of time.

One point in the government press release I found interesting is that China's planning states the current economic platform will mature in 2020, which signals a big, planned change. They've been on target plan since the early '70s, something few countries have been able to achieve, and I wonder what they see?

 

Under the Clinton Adminstration, China was allowed to steal missile and super computer technology.



Some day, probably sooner than later, China will rule the world...

 

I was looking more at their economic progress, from backward agrarian to industrial nation in under 40 years. China has one of the same major problems we face, an aging population with a declining work force ratio, but spending only about 12% of what we do on their military and dening retirement benefits to those who have children in the work force to support them provides insight of their social planning.

Please understand that I'm not lionizing China; when something has a big effect on my life like China's industrial dominance, I like to know more about it and what impact it will have on my future.

 

Being in the industrial equipment industry, I have a birds-eye view of the manufacturing sector of our economy. China's success, in my opinion, is due to a very simple and basic premise: they are able to build the goods we, as well as other nations consume, at ridiculously low prices. The reasons for their economic advantages are also relatively simple, at this point in time they have a government controlled workforce that is willing to work for extremely low wages and their manufacturers aren't being strangled with legal, labor , and environmental issues like those that plague the US. It is impossible to compete with a partner that has that many advantages.

 

I'm not much of an expert on China,but they do seem to have a lot of advantages over us.Like previously mentioned,they don't have the social programs we have here.SSI,SSDI,workmans comp,retirement programs through companies,food stamps,medicare,to name a few.Also,they don't abide by any clean air regulations.Their overhead is very low when the cost of labor is very cheap and their are virtually no benifits.But the part that worries me most is their foriegn investment in the U.S.If they decided to start pulling their investments out of our country,we might be in a bit of a mess.The stong american dollar attracts many foreign investors.If we aren't careful how we deal with China,they could be more of a threat to us financially than they would ever be militarily.

 

When one looks at the planning and effort it took to switch from an almost pure society of communism to a socialist system allowing private business ownership while modernizing the infrastructure to support a change from isolationist agrarian to world industrial producer in such a short period of time, that's impressive by anyone's standards. And that's what it took to take advantage of their low-cost labor.

If low-cost labor was the single issue for China's industrial coup, I can think of any number of nations, including one of our nearest neighbors, Mexico, who had the same basic conditions, including repressive government, and the advantage of being an oil exporter, but never had the capability to put forth the effort to change their circumstances.

 

They're high on the list of countries that export to us and buy our treasury issues to prop the dollar up, but their main financial clout (other than those wonderful export profits we no longer enjoy) is that they finance our frenzy of import consumption at low interest rates. If that finance accomodation was to suddenly incurr a dramatic increase in interest costs, our suppliers would be seeking domestic financing, which would compete with domestic sales of treasury issues and interest rates on our national debt would shoot up, along with everything else. Not a pleasant scenario.

 

Thanks for pointing that out.To be truthful,I never really paid attention to the financial investment they had in this country until we started to discuss them on this forum.I find the topic interesting,although I know very little about the subject.I'll follow the thread ,and perhaps get a little more insight.

 

Hi george,

I'll read the piece you linked to, but I wanted to comment first.

I find it positive that China is moving away from communism, and that its residents are fast becoming consumers of many new products. It seems as though it presents many opportunities to us Westerners, not the least of which are evironmentally-friendly products which have not even been conceived of yet, and ones I hope we lead in inventing. Face it, an industrialized China will need to be aware of pollution prevention.

The playing field will not always be absolutely level in this new reality. I just hope that our vocalizing and actions in regard to that fact are grounded in productive business acumen and not in xenophobia. China is going to be our new rival now. We haven't had that tension of late, and that historically has been when we are at our best.

You can call me Pollyanna now.

regards

 

I find good news and bad news for our country in China's emergence as the star industrial power.

Europe, with economic situations as bad or worse than ours, recognized (and financed) China's emergence long before our industrial decline caused us to finally seek new opportunities. Europe's recognition of China's new strengths and our weaknesses helped hasten the Euro into acceptance, which is now giving the dollar competition as a stable world currency.

Japan is finding China's new economic strength to be a major export market and, with 25% of China's exports going to Japan, sees China as a future solution to their crippling economic problems when US consumption of Japanese exports begins to slide.

China, in relation to their total geography, is short on natural resources, especially oil. That has caused them to seek out alliances where their export capabilities can offset resource imports, much as we were able to accomplish before our industrial decline, basic barter. They're already solving those problems in a diplomatic manner with a massive pipeline from oil rich former USSR states, as China is projected to become one of the world's largest, if not the largest oil consumer by 2020. While we're depleting our treasury in Iraq, Israel and experiencing terrorism for our efforts.

As China's modernization progresses, it will open new windows of opportunity for many US based companies and individuals. For our country as a whole, I see their emergence as a new industrial power continuing to weaken our ability to export goods that bring fresh capital into our system. That adjustment will eventually eliminate a majority of our middle-class population status and strain our government resources, now reaching a position of existing on credit, until our standard of living adjusts itself.

 

I read the link with interest and believe that it indicates a fundamental difference in philosophy between China and the U.S.. While we strive to make the current bottom line and place our efforts and our treasure on the present, they take a long term, systematic, planned approach. They have 5-year and 10-year plans while we tend to look to the next quarter. They are shrewd enough to look to the history of our industrial growth and avoid what they see as detrimental to their plans. They are also very patient and willing to let us bask in our role as the world's remaining superpower while our economy hemorrhages and they prop it up and manipulate the dollar by buying $billions of our bonds. In poker terms, they are holding good cards and playing them well.

 

That's the way I see it. Another consideration is what they spend on their military, less than 15% of our annual expenditures, by concentrating on defense, not troops stationed around the world or large pre-emptive strike forces. They learned that one from the former British Empire and the demise of the USSR, and are content in allowing us to spin our wheels (and spend our money) playing idealistic world police in selected areas, as long as we don't camp on their borders [Korea/Vietnam].

I also think that's the reason for their patience with Taiwan, as Mainland China will eventually offer greater economic benefits and a larger consumer market than does the US. Why fight for what's inevitable?

 

China's military spending is a lot higher than a lot of people think. The published #'s for the PLA don't include any foreign acquisition or R&D. That is financed seperately from the military budget.

China spends close to 25% or more of what we do. I think it's right around 100 Billion.

 

George makes a valid point, our foreign policy has put us in a position to spend a dispropotionate amount of our wealth on defense/military expenditures. It's been an inverse relationship: as our tax base is slowly being eroded with the loss of meaningful jobs, our military spending is climbing higher and higher. You'd almost think we were mimicking the old Soviet Union. That's what happens to a country when you concentrate to heavily on military spending and forget how to make money.

 

What parts of our foreign policy? What would you change?