Ultima Thule

In ancient times the northernmost region of the habitable world - hence, any distant, unknown or mysterious land.

Sunday, October 22, 2006

China's strategic rise

By Aussiegirl

The American Thinker's Dennis Sevakis has a boffo article that takes apart China's rise and the effect it is having on our strategic and economic and military outlook. Loads of information here, I've only excerpted a few pithy paragraphs, but I urge you to read the entire article as he goes into the problem of intellectual property theft and copyright violation, espionage, proliferation of high-tech weapons to unfriendly countries, and many other nefarious actitivities of a China on the march, and not at all friendly to the U.S. or our interests. I've been warning about China's intentions and the dangers we face, and no one has laid out the details better than Mr. Sevakis. Bravo!

The American Thinker

“Lenin once said: When it comes time to hang the capitalists, they will sell us the rope. Even he didn’t expect that the capitalists would provide their enemies with the funds for the rope as well.”. – Clifford D. May (1), January 13, 2005, Foundation for the Defense of Democracies’ symposium (2) on “Propaganda and Terrorism”

Lenin, of course, was talking about “capitalists,” the bane of the collective, while Mr. May was referring to the Saudis and Iranians and the capital provided by their oil revenues that funds the radical Wahhabi madrassahs and Shiite Islamic terrorists. It seems not much of a stretch to see how this also applies to the economic and strategic relationship between China, the West in general, and the United States in particular.

[...]The ten years of the Cultural Revolution had devastated China economically as well as in many other way. Deng, the last great personage left alive from among the ranks of the long marchers, proclaimed that socialism did not mean that the proletariat and peasants should be forever condemned to a state of “shared poverty.” And so at the age of 76 Deng Xiaoping carefully, deliberately and strategically began the opening of China to outside capital, technology and markets in order to achieve the transformation – an evolutionary adaptation – of China’s ancient but now collectivist society into a modern industrial giant.

[...]And just what kind of policies might the Party planners implement? First, currency control. No one is permitted to speculate with the yuan as it will be pegged to the U.S. dollar so as to strictly control the exchange rate. If you wish to do business with and in China you just have to live with it. Period. What has been the result of this policy? China’s foreign exchange reserves (5), which includes all its reserve currencies, have grown almost exponentially and will probably exceed one trillion (6) U.S. dollars (excluding Hong Kong) before the end of this year. It’s currency remains undervalued (7) by as much as forty percent, thus keeping China’s exports very inexpensive indeed. While the U.S. Chamber of Commerce assails (8) China over copyright fraud and currency manipulation, even the normally hard-to-ignore Senator Chuck Schumer (9) seems but easily ignored (10) by the cat-bird-seated Chinese.

Though no longer a strict requirement (11), for most of the period since the economic opening of China foreign ownership of joint ventures was generally limited (12) to forty-nine percent. This meant that managerial control and decision making remained in Chinese hands while any technology contributed by the foreign partners became Chinese property. If you wanted to do business in China, technology transfer was mandatory. Boeing is teaching (13) the Chinese how to manufacture aircraft components using the latest composite construction techniques and General Electric is handing over generator designs (14$) while footnoting that the transferred technology is not the “most advanced.” The same has been true for General Motors which has achieved success with it’s Buick line of autos in China, but also at the price of telling its hosts everything they wanted to know about how and why everything is done. Such a deal.

[...]Well, enough of this spilt-milk, water-under-the-bridge nonsense. Over the dam of the last twenty years what did America get out of its trade and economic policies vis-à-vis the Chinese? We certainly didn’t receive any advanced technology from them as a result of our trade relationship. Has our military capability relative to China improved or deteriorated? Has their foreign policy proved congruent with that of the U.S. in our dealings with countries such as North Korea and Iran? Where in the world, the third world especially, aren’t the Chinese making inroads and weakening the influence (25) of the United States? Seems there are many, not a few even in this country, who consider that an improvement and a sign of progress for mankind. What, in fact, of lasting value have we accumulated with our credit-financed purchases of vast quantities of Chinese consumer goods?

Debt. And plenty of it.

Now, the American voting and consuming public has been hearing for years how “free trade” is a panacea for curing economic stagnation and just great for re-invigorating the health of America’s post-industrial, service-oriented economy. We’ve been fed the pabulum that the trade deficit is really something we need not worry about and, as far as the federal budget deficit is concerned, that’s not a real problem since that debt is owed to ourselves. If you’ve been among those who’ve swallowed all of this, or have just pushed it to the bottom of your things-I’ve-got-to-worry-about list, you are probably in for a very rude awakening.

[...]Well, maybe things aren’t as rosy as we often hear on the evening news in those quickie macroeconomic reports. Low unemployment levels, rising household income and record corporate profit reports don’t seem to tell the whole story. If America has maxed-out its collective national credit card, no one in Washington will be willing to take any responsibility for our short-sighted economic policies when the free-trade and fiscal-finger-pointing merde hits the fan.


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