[Marxism] No Longer the "Lone" Superpower

[Intense Red <intnsred@xxxxxxxxxxxxxxxxxx>]

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

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

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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