[Marxism] No Longer the "Lone" Superpower

Intense Red intnsred at socialismonline.us
Tue Mar 15 20:14:22 MST 2005

[A long and in-depth look at power relations in East Asia, China's rise, and 
what it means to the US and Japan.]


No Longer the "Lone" Superpower
Coming to Terms with China
by Chalmers Johnson
I recall forty years ago, when I was a new professor working in the field of 
Chinese and Japanese international relations, that Edwin O. Reischauer once 
commented, "The great payoff from our victory of 1945 was a permanently 
disarmed Japan." Born in Japan and a Japanese historian at Harvard, 
Reischauer served as American ambassador to Tokyo in the Kennedy and Johnson 
administrations. Strange to say, since the end of the Cold War in 1991 and 
particularly under the administration of George W. Bush, the United States 
has been doing everything in its power to encourage and even accelerate 
Japanese rearmament.

Such a development promotes hostility between China and Japan, the two 
superpowers of East Asia, sabotages possible peaceful solutions in those two 
problem areas, Taiwan and North Korea, left over from the Chinese and Korean 
civil wars, and lays the foundation for a possible future Sino-American 
conflict that the United States would almost surely lose. It is unclear 
whether the ideologues and war lovers of Washington understand what they are 
unleashing -- a possible confrontation between the world's fastest growing 
industrial economy, China, and the world's second most productive, albeit 
declining, economy, Japan; a confrontation which the United States would have 
both caused and in which it might well be consumed.

Let me make clear that in East Asia we are not talking about a little 
regime-change war of the sort that Bush and Cheney advocate. After all, the 
most salient characteristic of international relations during the last 
century was the inability of the rich, established powers -- Great Britain 
and the United States -- to adjust peacefully to the emergence of new centers 
of power in Germany, Japan, and Russia. The result was two exceedingly bloody 
world wars, a forty-five-year-long Cold War between Russia and the "West," 
and innumerable wars of national liberation (such as the quarter-century long 
one in Vietnam) against the arrogance and racism of European, American, and 
Japanese imperialism and colonialism.

The major question for the twenty-first century is whether this fateful 
inability to adjust to changes in the global power-structure can be overcome. 
Thus far the signs are negative. Can the United States and Japan, today's 
versions of rich, established powers, adjust to the reemergence of China -- 
the world's oldest, continuously extant civilization -- this time as a modern 
superpower? Or is China's ascendancy to be marked by yet another world war, 
when the pretensions of European civilization in its U.S. and Japanese 
projections are finally put to rest? That is what is at stake.

Alice-in-Wonderland Policies and the Mother of All Financial Crises

China, Japan, and the United States are the three most productive economies on 
Earth, but China is the fastest growing (at an average rate of 9.5% per annum 
for over two decades), whereas both the U.S. and Japan are saddled with huge 
and mounting debts and, in the case of Japan, stagnant growth rates. China is 
today the world's sixth most productive economy (the U.S. and Japan being 
first and second) and our third largest trading partner after Canada and 
Mexico. According to CIA statisticians in their Factbook 2003, China is 
actually already the second-largest economy on Earth measured on a purchasing 
power parity basis -- that is, in terms of what China actually produces 
rather than prices and exchange rates. The CIA calculates the United States' 
gross domestic product (GDP) -- the total value of all goods and services 
produced within a country -- for 2003 as $10.4 trillion and China's $5.7 
trillion. This gives China's 1.3 billion people a per capita GDP of $5,000.

Between 1992 and 2003, Japan was China's largest trading partner, but in 2004 
Japan fell to third place, behind the European Union (EU) and the United 
States. China's trade volume for 2004 was $1.2 trillion, third in the world 
after the U.S. and Germany, and well ahead of Japan's $1.07 trillion. China's 
trade with the U.S. grew some 34% in 2004 and has turned Los Angeles, Long 
Beach, and Oakland into the three busiest seaports in America.

The truly significant trade development of 2004 was the EU's emergence as 
China's biggest economic partner, suggesting the possibility of a 
Sino-European cooperative bloc confronting a less vital Japanese-American 
one. As Britain's Financial Times observed, "Three years after its entry into 
the World Trade Organization [in 2001], China's influence in global commerce 
is no longer merely significant. It is crucial." For example, most Dell 
Computers sold in the U.S. are made in China, as are the DVD players of 
Japan's Funai Electric Company. Funai annually exports some 10 million DVD 
players and television sets from China to the United States, where they are 
sold primarily in Wal-Mart stores. China's trade with Europe in 2004 was 
worth $177.2 billion, with the United States $169.6 billion, and with Japan 
$167.8 billion.

China's growing economic weight in the world is widely recognized and 
applauded, but it is China's growth rates and their effect on the future 
global balance of power that the U.S. and Japan, rightly or wrongly, fear. 
The CIA's National Intelligence Council forecasts that China's GDP will equal 
Britain's in 2005, Germany's in 2009, Japan's in 2017, and the U.S.'s in 
2042. But Shahid Javed Burki, former vice president of the World Bank's China 
Department and a former finance minister of Pakistan, predicts that by 2025 
China will probably have a GDP of $25 trillion in terms of purchasing power 
parity and will have become the world's largest economy followed by the 
United States at $20 trillion and India at about $13 trillion -- and Burki's 
analysis is based on a conservative prediction of a 6% Chinese growth rate 
sustained over the next two decades. He foresees Japan's inevitable decline 
because its population will begin to shrink drastically after about 2010. 
Japan's Ministry of Internal Affairs reports that the number of men in Japan 
already declined by 0.01% in 2004; and some demographers, it notes, 
anticipate that by the end of the century the country's population could 
shrink by nearly two-thirds, from 127.7 million today to 45 million, the same 
population it had in 1910.

By contrast China's population is showing signs of stabilizing at 
approximately 1.4 billion people, and is heavily weighted toward males. (The 
government-imposed one-child-per-family policy and the availability of 
sonograms have resulted in a ratio of 129 boys born for every 100 girls; 147 
boys for every 100 girls for couples seeking second or third children.) 
Chinese domestic economic growth is expected to continue for decades, 
reflecting the pent-up demand of its huge population, relatively low levels 
of personal debt, and a dynamic underground economy not recorded in official 
statistics. Most important, China's external debt is relatively small and 
easily covered by its reserves; whereas both the U.S. and Japan are 
approximately $7 trillion in the red, which is worse for Japan with less than 
half the U.S. population and economic clout.

Ironically, part of Japan's debt is a product of its efforts to help prop up 
America's global imperial stance. For example, in the period since the end of 
the Cold War, Japan has subsidized America's military bases in Japan to the 
staggering tune of approximately $70 billion. Refusing to pay for its 
profligate consumption patterns and military expenditures through taxes on 
its own citizens, the United States is financing these outlays by going into 
debt to Japan, China, Taiwan, South Korea, Hong Kong, and India. This 
situation has become increasingly unstable as the U.S. requires capital 
imports of at least $2 billion per day to pay for its governmental 
expenditures. Any decision by East Asian central banks to move significant 
parts of their foreign exchange reserves out of the dollar and into the euro 
or other currencies in order to protect themselves from dollar depreciation 
would produce the mother of all financial crises.


Remainder at: <http://www.commondreams.org/views05/0315-24.htm>

Fast fact: More money is spent by the U.S. gov't on nuclear weaponry in one 
year than was spent on housing from 1980-1992.

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