China now the world's second largest economy

All right...I'll bite: What about this ido you find terrible and grave?

Japan's been floundering for what? A decade and a half? China's finally joining the current epoch and going through their own Industrial Revolution. 1.3b people make for a bitchin market to work with, even if most Chinese are insanely poor (averaging one tenth the per capita income of the Japanese according to your story).

Given the current economic climate and China's willingness to look at individual profit as something other than the root of all evil this feels less like a shocking situation and more a foregone conclusion.

Clearly, conflict is unavoidable as the "Chi-Coms" economic interests will increasingly become opposed to our own. We should drop a few nukes on the mainland now to avoid the catastrophic loss of life that our obviously otherwise unavoidable land invasion would entail.

Their real estate sector is about to collapse in a big way. Like huge.

Plus, the China we know today probably wont exist in 10-15 years or so. No need to cry yourself to sleep, Kate.

Lowell, MA, 1910

There's a path things historically take. China's at the beginning of that path. The Closer is right in that the country we see now won't be the same in twenty years.

Nationalistic Zealotry? That sounds like business as usual for a country on an ascendency. Any country that expands, whether it be military or otherwise, will say it's doing so "to extend the benefits of its society" to the less fortunate. That's standard operating procedure. Hell...isn't that the purpose Alexander put forth when he went a-conquering? Peace and Prosperity and the benefits of his culture? The British were aces at this, actually.

The lack of resources is an interesting point. Strikes me as we could benefit from that at some level if we can find some to export. Granted, since the oil thing is of a primary importance to them, then what they get we won't and there's gonna be weeping and gnashing of teeth. Which is a good reason to get us off of the dependence we now have to the stuff. But that's Obama's and the Free Market's concern, right?

Not gonna argue you on that one. Just...lemme know when we have a freakin RIVER catch fire near one of their cities from all the toxic stuff dumped into it, k?

And I sort of figured you'd miss the forest for the trees, but my intent was to get across to you that there is a fairly recognizable track to these sorts of revolutions. Don't think that what you see here and now is what we're going to end up with.

There's plenty here to worry about. But I'm not sure China is the problem.

First, a quick point about Japan. It's pretty shocking to note that the US effectively GOT RID OF the Japanese government recently. Hatayama was committed to the policy of closing down the US military bases in Okinawa which the residents are totally opposed to.

To Obama this was utterly out of the question and Hatayama was given his marching orders. Japan is one of the most powerful industrial nations on earth and yet he was tossed aside like an empty beer can. This is what happens when you oppose the US. Democracy is meaningless.

I really don't pay much attention to the cavalcade of economists falling over themselves to declare China a threat to US interests.

A few facts:

1. All this talk of a "global shift" in power neglects one crucial factor - nations divorced from the internal distribution of power are NOT the real actors in international affairs. Adam Smith - whose economic principles are as valid today as they ever were - recognised that the primary architects of power were the owners of society. In his day (back in England) these were the merchants and manufacturers. Today it is transnational capital. And, until the foreseeable future, it will centre around the US & EU (with Russia, India and China yapping at the bootheel like ravenous hyenas.

There is a global shift in power. But it is the shift of the global workforce to transnational capital.

2. China's role is to be the assembly plant for an Asian regional production system. Japan, Taiwan etc. - let's say Toyota export car components to China where the car is assembled and then shipped back to Japan. It's a con - designed purely to swindle money out of the taxpayer. Think of the way NAFTA exploits Mexican workers - in terrible conditions and for pitiful wages - as a means of swindling tax revenue out of US pockets. It's no co-incidence that over half of the world's trade now takes places between nations whilst inside the same corporation. This is what's known as a "Thriving Economy".

3. GDP is a terrible indicator because it does not take into account "externalities". An externality is when a paper mill cuts corners and pollutes the local river killing all the fish and leaving it in a hazardous condition. A corporation is legally obliged not to factor externalities into its planning, budget or balance sheet. It does not and cannot care that the river is hopelessly polluted requiring millions of dollars of attention.

4. The big thing in China now is the abandonment of the industrial heartlands in the NE (a bit like the auto industries around Chicago in America) in favour of the bright lights of the big cities and "hi-tech". It's difficult to know who is worse off. The NE has little money but at least they are unionised and thus able to combat the forces of neo-liberalization (there have been well over ten-thousand organised labour protests in the last year). The people in the cities where the unions are being systematically busted apart (a bit like in the US under Woodrow Wilson) have no such luxury and are there for the taking.

5. Whilst China is seriously increasing its energy usage, it's worth remembering that in terms of Green tech it is way ahead of the EU, which is way ahead of the US.

Do you have evidence of this? Just saying Obama didn't want to lose the bases, Hatayama reneged on his promise, then quit, therefore Obama caused it to happen is not evidence.

Re; China

G Foster beat me to it: China spends more on Green energy than the US or anyone else. 70-80% of Wind Power equipment is made in China.

The Real Estate Bubble currently building in China makes what happened here look like a joke. And when it bursts you're going to see some serious Civil unrest.

Foster, your comments about "Transnational Capital" ignore the very rapidly increasing power of the Chinese Banks and Government. Whatever internal weakness they are hiding at home, they already have enough power to publicly "dress down" the US Government (see recent comments by BoC leaders about their concerns about the US Deficit).

The Chinese government has successfully bullied major US corporations (GE's CEO made some comments about this at a private dinner that got publicized in Businessweek recently, and Google turns out to be a leetle bit evil when it comes to respecting freedom of speech in China), cut deals with governments in Africa and South America ("yeah don't even wanna talk about Human rights we just want your resources!) and are building a fleet of attack Submarines and land based missiles (how many are unknown)

So in sum, yeah China is acting like every rising power (as noted above) but there are some serious internal structural problems they have to deal with .

There are some people saying China's building its economic powerhouse on an unsteady foundation of sand, and it'll collapse sometime. The real estate bubble is a good example.
Do you realize what this would do to the general population? Or is it okay for people to starve to death as long as they're Chi-coms?

eta: not that I'm defending them or anything. Their human rights, environmental, and animal abuse records are abysmal. And that "China spends more on Green energy than the US" is kind of BS. The total amount spent outnumbers the US, but the fact of the matter is that China also pollutes much more than any other country, so the net gains from such Green advances are more than cancelled out.

This, as an Economic force the EU is massive, in fact I would go so far as to say it holds more sway than the USA.

In theory I´d agree. But, as has been evident in the "Greece-bailout", without a proper common economic policy Europe is nothing but a mere tiger on paper. An internal market and a common currency can only be one side of the coin.

Prehaps, but I think if it can survive the near collaspe of one nations economy and still be a world player it's got some legs to it.

Indeed. To my point above, China as a country will end up fragmenting within a decade or two. Japan will end up regaining the number two spot eventually. I think the jury is still out as to whether the EU is long for this world. If it does end up failing within a few decades, Turkey will probably end up being the powerhouse in that general region.

ETA after Germany and the UK, of course.

The near collapse of an economy that was responsible for about 2.5% of Europes GDP that is.

I do wonder about our economey actually, with the current Allaince governments insane budget slashing tatics we may well be stuck in a recession for a long time to come.

Yeah, that is my biggest fear overall as well. We sure like to save ourselves to death.

Funny, considering that the propagated "boom" of the German economy is pretty much dependend on the export alone, which will be devastated by all those budget slashes in the long run. Irony has it, that it is actually China with their money they have thrown arount to bolster their economy, which enabled the rise in export in the first place. And just like that the thread is back on topic!

China has far-reaching issues, obviously; one that hasn't been touched on is the fact that their youth population peaked in 2007. Due to the one-child policy, their population will now rapidly age. This is a significant problem in rich countries like Russia, Japan and Germany (but not the USA, cuz we <3 immigrants!); it will be more of a problem in China, as they are not yet a rich nation, on a per-capita basis.

Also, Closer, this

is a really shaky analysis. Japan isn't coming back. China, as far as countries go, just doesn't dissolve. It get buffeted by haunted winds and shit, and occassionally descends into Civil War, but I think the likelihood of the country disintegrating is roughly equal to that of the US doing the same. That is, it's not unthinkable, but I wouldn't bank on it.

While I agree that what I suggested isnt the norm, I think China is a special case, and comparing it to the US is apples and oranges type stuff.

China is making a large gamble that it can carry out a type of balancing act indefinitely. It thinks it can shift resources away from the wealthy coastal areas (where the vast majority of the population lives) westward without meeting resistance from the rich and powerful who's resources are being shifted away.

The really big problem sort of ties in to their economical growth over the past few decades. With the communist systems of political relationships, loans (from private banks) have been given out for many reasons, none of them having anything to do with the merits of a business. That's where the capitalism/communism hybrid will do them in. As of last year, the amount of nonperforming loans was around $900 billion, which is more than a third of China's entire GDP.

The only way these debts are being "saved" is by extremely high growth rates driven primarily (naturally) by low cost exports. Keeping the prices of exports as low as they have been means that the amount of actual profit China is making is extremely slim. Over the past 10 years especially, China has been growing, but it hasn't been profitable.

The financial collapse of Japan was caused by pretty much the same factors. Japan citizens had an extremely high savings rate, so seeing as how the country itself couldnt make money off of domestic demand, it focused on low cost exports to sustain the illusion of growth. As soon as there was the slightest hiccup in demand for these low cost exports (either through competition or international economic reasons), the house of cards came crashing down. What happened to Japan from an economic standpoint is going to happen to China. China's structure demands that it keeps growing at the fast pace that it has been growing for twenty years, which is borderline impossible.

Japan was able to survive by accepting more than 10 years of slow-to-no growth mainly because it had the political discipline to avoid unrest. China doesn't, so it won't.

But then again, that could be all wrong.

And the WTO just smacked down Europe for daring to protect its manufacturing base with tariffs, thus giving an advantage to US companies that outsource all their manufacturing to slave labor in China. Free market ideology is essentially a cynical policy sold to the naive by the greedy and powerful.

I'm not sure what more evidence you need. Hatayama had been put under enormous pressure to get rid of the Okinawa bases. Obama and his team knew perfectly well that he would either be rendered a lame duck (like Blair was after he ignored the biggest peacetime anti-war demonstration in years) or be forced to resign.

When Obama sent Robert Gates over to negotiate the SOFA agreement it was like a mob boss dispatching his lieutenant to slap down an unruly voice.

The decision has caused mayhem in Japan. You only need look at their English language papers to see this.

Yes and no. Considered as a whole the EU is the most powerful trading block in the world. But it is extremely factionalised and it is common to find the more powerful nations (Germany, Britain and France) working against each other. The addition of former Eastern Bloc nations (such as Poland) has not helped unity either.

You're absolutely right that the Chinese government is increasingly asserting itself internationally. But that power is modest next to the power wielded by transnational corporations (a few of which are Chinese). Ever since Nixon abolished the gold standard and the World Bank and IMF began bullying nations into accepting the policies of neo-liberalization (opening up markets etc.) we've seen the rise of global mega-corporations which respect no borders, subvert democracy repeatedly and wield enormous power. Many of the trade agreements in place today provide structures that give these corporations the means to enact punitive sanctions such as capital flight which can all but bankrupt countries. The Chinese and other Asian nations (such as Korea) had the wherewithal to recognise the implicit dangers of neo-liberalization and (especially during the nineties) wrote up legislation to mitigate the power of these corporations within their markets. But outside of SE Asia there is very little protection.

So, talk of which nation wields the most power kind of misses the point. The power is with the trans-national corporations. And the shift in power isn't from one nation to another. It is in individual capital to trans-national corporatized power.

This is extremely worrying. Corporations are not democratic. They are - by law - highly autocratic and completely indifferent to our freedom. I mean, in the US there is now a powerful lobby which is trying to curtail the power even of shareholders. If this doesn't send a shiver up your spine nothing will.

I would respectfully suggest that there is a lot of Euro-Centrism and Trans-national Corporation centrism in this thread. Yes in the past giant Global Corporations wielded tremendous power, but the balance is shifting in my opinion.

When Chavez kicks out the Oil companies and takes over their faculties, it's no threat. Eventually he or his replacement will have to bring in Big Oil back simply to run the refineries and wells competently.

When China does the same thing, they have the ability to actually run things well. Yes there is a lot of corruption: people can be shot for it too, and are.

Case in point: Huwai. They literally took the Operating System Cisco uses to run their Switches, took the same code, and put it into their own switches which they sold at a much lower cost. That's one upping Nationalization: you just take a product made outside of China and sell it as a Chinese product, with all profits going back to China!

The very problems China faces as described in this thread and elsewhere will push the Chinese leadership to exert more and more influence on the rest of the World. Look again at all the engineering teams they have in Africa and South America, helping China get mineral resources.

I think China can and will overtake the US and the EU as an economic Hegemony in the next 10-20 years.

Did you have a listeining device in the room. May we hear the part where Gates tells the PM to "shut the Fuck up about the bases we aint' going"?
Those "All powerful" corporations are being bullied and their Intellectual Property stolen, not just by the Chinese but India as well.

Western Corporations used to enjoy a mystique in China: they were seen as the Future and superior to Chinese institutions. No longer. The Financial Crisis has shown them (in their minds) that the Emperor has no cloths. They own our debts now and know they can use that to their advantage.

Hatayama was under enormous pressure to move the bases because that's essentially what he ran on. The Obama administration did not handle that particular alliance well at all, in my opinion.

I don't need one. It's a study of cause and effect. Hatayama was lobbied by the Japanese people to get rid of the basis and that's what he promised to do. The US then sends a team over to "negotiate" the SOFA agreement and - out of the blue - Hatayama decides not to close the bases. His people withdraw their mandate (through mass demonstrations) and he resigns. Cause and effect.

They are being bullied and their "intellectual property" (often on the back of state-subsidized research paid for by the taxpayer) stolen by the Chinese and Indian governments which then pass those secrets onto the Chinese and Indian corporations which lobbied to have them appropriated.

I'm not sure what "Euro-Centrism" or "Corporation Centrism" means. If you could elaborate I'd be happy to reply. I can't agree that the balance of power is shifting away from corporations. Indeed, I'd say that it is hurtling toward them at an exponential rate. Since Reagan the US and its EU partners in collaboration with the World Bank and IMF have concocted a raft of legislature (national and international) which is so pro-corporation you would be forgiven for thinking there could ever be any alternative. Nations unable to stand up to the G10, G11 ... etc. have been bullied into opening up their markets to foreign competition and the liberalization of banking. This provides multi-nationals with the tools to hold entire countries to ransom. If, say, Nigeria doesn't open up its northern oil fields to foreign investment they simply withdraw colossal sums of capital and bankrupt the economy. So when the next president is elected into office he knows he has to keep his mouth shut and do what he is told - or else. This kind of thing is a regular occurrence in the US where, say, the major meatpacking corporations threaten to move lock, stock and barrel, entire factories employing tens of thousands of people to nearby states where tax thresholds for major executives are lower. The NAFTA agreement was nothing short of scandalous. Exploitation at its worst.

Add to this the grossly protectionist international patent laws which threaten hell and damnation on any state which has the temerity to allow the production of low-cost reverse-engineered anti-retrovirals to help treat the tens of millions of Africans dying of AIDS right now.

And don't get me started on the patenting of human genome research by major corporations. Research that couldn't have even begun without decades of state-subsidized (it's those pesky taxpayers again) work within various universities. Or the unimaginable profits made out of state-subsidized defence expenditure (practically half the US deficit). Or the multi-billion dollar bailout of the entire banking industry following the sub-prime mortgage fiasco (you might have noticed that these bailouts appear to be coming more frequently).

Whilst I agree that nationalised industries tend to be inefficient, the above statement appears somewhat prejudiced. Perhaps, even, racist. As if Venezuelans could ever manage their own resources "competently".

Precisely what threat does Chavez pose? Economic? Military? If there's a threat I'd say it emanates from the US:

"“This is a dangerous enemy to our society controlling a huge pool of oil that could hurt us very badly ... We have the ability to take him out and I think the time has come to exercise that ability... if he thinks we are trying to assassinate him we really should go ahead and do it... and I don’t think any oil shipments will stop. This is in our sphere of influence and we can’t let this happen.”

Like him or not the overwhelming majority of Venezuelan people (who live in enormous poverty) believe that he is the first president in the history of Venezuela who is actually doing something for them. They voted for him. He is their man. The US hates him because he is independent and takes shit from no one. Bush and his gang of thugs tried to erase him in 2002 (take a look at the excellent documentary The Revolution Will Not Be Televised by Kim Bartley to see how democratically elected leaders who don't toe the line are dealt with).

Let's not lose track of what is important here. People. Not corporations. If Chavez wants to spread the oil, gas and mineral wealth amongst his people and not into the bulging coffers of the major corporations - good for him. I'm not saying the guy is a saint and I certainly don't agree with all of his policies - but if it's a choice between Chavez (warts and all) and pathologically greedy and anti-social corporations who are prepared to stand back and let tens of millions die (as is the case in Africa with HIV) then I'm with Chavez.

Geoff what I mean by "Euro-Centrism" and "Trans-National Corporation Centrism" is exactly what the words mean. Your perspective is that EU and Mega-Corps are the end all and be all. And I'm suggesting that is no longer the case.

Oh and those poor befuddled fools in Nigeria no longer need bow down to those evil trans-national corporations...at least not those based in the EU or USA. Why? Well , China is happy to lend them money for new refineries, no questions asked! PROOF

Not sure how saying Venezuela has few competent engineers is "racist". (Just like one could assume that your comments that China can't take on the West are "Racist". But I did not make such a leap and I hope you won't). Big Oil brought in their own talent from outside the country; when Chavez nationalized the Oil facilities the engineers left.

Guess who's now filling in? China Petroleum! PROOF

Oh, good. There's finally a political ad for this.

So, did the Greek and Roman Empires fall because of scary liberal health care programs?

And the response video from the young conservative guy is just the cherry on top.

Look, if you're going to misrepresent my position (why would I include the EU and NOT the US?) and waste my time there really is no point continuing.

See - you're doing it again. At which point did I say China is completely incapable of significant foreign investment? It's very easy to claim "victory" in a debate if you replace an opponent's words with your own and then knock them down. Congratulations.

I tell you what - I'll just step out of the room and let you continue arguing with yourself until you're finished. Knock him dead.

Huh, I didn't even know a Greek Empire even existed, much less that it was brought down by Socialism. Thank you American Right!

Stelios, you probably already know this, but when stupid people talk about the "Greek Empire" they're usually talking about the Athenian Empire which never really got to be much of an Empire. Also, I love how how people blame political ideologies and policy measures which weren't even in existence for the collapse of ancient civilizations.

I mean, we don't have that much lead in our pipes, so that's step one for us right there. Who knows about the Chinese, though...

In my experience it's the Macedonian Empire.

I guess that works too. When I hear it, it's usually people talking about Athens during run up to the Peloponnesian war. "Oh, if only it weren't for their hubris," etc.

To be fair Plato himself was kind of doing this, which is where the notion of Greek as a socialist paradise kind of comes from. If you read the Republic and then look at accounts of what's going on in Athens at the time it's easy to see that Plato is kind of lashing out an odd-strawman, but it's a point which has been adopted as a true reading of Greek politics.

At no point does this ad even skirt the far reaches of truth. The Greek city states and the Hellenistic kingdoms actually fell to the Romans. It had nothing to do with taxes, or spending or any other bullshit.

The Western Roman Empire fell to the inevitable fatigue that being an empire for centuries upon centuries brings and to one of the most monumental migration movements in recorded history.

The Eastern Roman Empire after hanging on for almost another thousand years fell to the Turks much in the same way its western counterpart did.

All these events were caused by historical movements spanning centuries, that are repeated time and time again from the time of the Summerians. Attributing any of these to political inventions of the past century can only be viewed as either a joke or a lie. This is the US conservative movement showing again that they are certain that their anti-intellectual campaign of the last few decades has destroyed their audience's intelligence enough that the mere mention of familiar terms can substitute actual political arguments.

And this is on top of it being xenophobic as fuck.

Even going with their premise, that turning the civilizations turning their backs on their origins caused their downfalls, doesn't that mean that communism is then superior?

China turned its back on its origins as a dynastic civilization and turned commie. It didn't fall and in that ad became dominant, so doesn't that mean that it's actually superior to the others?

Ha.

Over 48,000 manufacturing jobs lost that employed more than 500 Americans gone over the last ten years thanks to globalization.

We were warned by Sir James Goldsmith in 1994.

http://solari.com/blog/?p=3309