US, China arms race has begun: academic

US, China arms race has begun: academic

news.smh.com.au

An arms race between the United States and China - reminiscent of the former Soviet Union Cold War - has already begun, a leading Australian academic says.

While Defence Minister Stephen Smith quickly ruled out a proposed US aircraft carrier battle group base near Perth, Australian National University (ANU) Associate Professor Ron Huisken said the fact the Americans were considering it was proof it was already locked in an arms race with rising superpower China.

(visit the link for the full news article)

Prof Huisken, attached to ANU's Strategic and Defence Studies Centre, told AAP on Thursday both nations were making military decisions exclusively to counter each other.

This was borne out in China's decision to build its own aircraft carrier fleet, and the US's increasing presence in the Asia-Pacific.

Yes, you heard it...a Cold War. The world does not need a new war, not a cold one, and definitely not a hot one.

The USA feels threatened by China, and as such is looking for solutions to increase their military strength in the Pacific. Australia, being one of the biggest US allies is seen as a strategic staging ground to combat the ever rising might of China.

It is sad to see that Australia is at the centre of this Cold War. Even worse is that Australia is playing games while in this position. Trading with some countries, sanctions on others (their enemies)...we are doomed if the # were to hit the fan.

_______________________________

If some of you call bull# on this Australian regarding this cold war position, i will tell you that China has already accused the US of starting a Cold War. Considering this, it is fact...a Cold War has begun.



news.smh.com.au
(visit the link for the full news article)

Has begun.....??? Where have the reporters of this been hiding for the last 20 years.... in a hole?

This is another case of reporters being 20 years behind the public in actual knowledge

Originally posted by pacifier2012
Has begun.....??? Where have the reporters of this been hiding for the last 20 years.... in a hole?

This is another case of reporters being 20 years behind the public in actual knowledge

I agree. The Cold War may have 'ended' in the '90's, but it actually shifted elsewhere (now China, obviously).

Awesome!! a new cold war.
Now maybe that we have a new boogieman, we can stop killing the brown men in the sandbox and just produce and sell weapons that will never be used.

reply to post by daaskapital


It's OK, the USA are here ... and they have bulk ice. ( they will ensure it is a 'cold war' )

We don't want no 'hot' wars, now do we ?

I agree the article is a little behind the facts!

Ever since the last year or so, the press has been buzzing about the US bolstering its presence in the pacific in reponse to China's growing naval might.

I don't agree, however, with the assessment that this is a "new cold war".

The cold war was possible because of "strategic nuclear parity", as well as "conventional forces parity" between the US and the Soviet Union. This is far from being the case between the US and China. The US has a clear military advantage over China in all aeras, except perhaps man power.

For this reason, the US is bound to "feel lucky" and press its advantage where and how it can. You only have to look at the world stage and what is currently going on to see just how uninhibited the US feels about toppling governments and destabilising countries everywhere for its own gain.

In time - and that may be sooner than many of us think - the US will attempt to steer unrest within China, as they have done in Russia over the last couple of years, and in North Africa with the so-called "
Arab Spring". They will try it because, if they fail to break China apart, the Chinese will eventually surpass the US in military. economic and political might.

However we look at it, a war for supremacy between the US and China is inevitable, and in fact already underway.

Originally posted by Haknow
Arab Spring". They will try it because, if they fail to break China apart, the Chinese will eventually surpass the US in military. economic and political might.

There is a problem with this perspective. Its completely void of facts. A few things that you need to understand about the Chinese economy. 50+% of its GDP is based upon fixed investments. If you think this is sustainable, you're only kidding yourself. Inflation is being under reported by some 5-6%. Chinas economy is almost identical to Japans of the 1980's except for the fact that Chinas fixed investment to GDP ratio is far higher than it was in Japan at pre collapse levels. China has a real-estate bubble that equates to roughly 20+% of GDP. They have a massive credit bubble from nonperforming loans. If you want to see Chinas "growth miracle" look no further than the Chinese city of Ordos. This city was built for one million + people back in 2005. Today, it is 90% empty. This is how China has managed to achieve high growth rates. Its also how and why the Chinese economy will collapse. It must collapse, and when it does, the global economic order will be corrected and restructured.

China doesn't depend on free market principals which uses supply side economics to determine demand. This is evidenced by building 66 million empty apartment buildings that scatter the Chinese country side. We see this with the largest mall in the world that was built in 2005, yet today still remains vacant. We see this in the vacant city of Ordos, etc. Its really no wonder why China uses fixed investments as its main engine for growth. It maxes out employment by hiring millions upon millions of workers for construction. Another reason why China uses fixed investments as its primary source for growth is because it creates the illusion of growth. But what it really creates is debt, by misallocation of funds resulting in incredible waste. I'm afraid Chinas days are numbered. This is why I don't buy a cold war between the US and China coming to fruition. I think the US would like to have another boogeyman, as the war on terror is waning. It served as a momentary high that lasted for a short time. But now the US needs another boogeyman to unite its people around. I think they would like for it to be China, but logic, facts, and reason tells me otherwise.

reply to post by rock427


Good point - and for the most part, I agree with your analysis: the Chinese economy is artificially inflated.

Alas, this is also the case of the US and European economy, albeit through different routes (e.g. borrowing, financial speculation on inexistant or severly compromised financial products, the spread of toxic assets...etc).

What you have said of China is true for the US and the EU - their economies are bound to collapse as well.

But in my view, this sorry state of economic affairs makes a conflict more, not less, likely. After all, what better (for the victor) than a war to wipe the slate clean and start anew?

You derive your interpretation of this situation, it seems, form a traditional "supply-side"economics point of view; may I remind you this theory is based on more than a few assumption, few of which are actually realised in the real world. I wouldn't say it's irrelevant, but I certainly think it's limited as a way to understand the world and actual geopolitical dynamics.

I am a pragmatist and a realist, in the political sense of the terms, not an economist.

Originally posted by daaskapital

Originally posted by pacifier2012
Has begun.....??? Where have the reporters of this been hiding for the last 20 years.... in a hole?

This is another case of reporters being 20 years behind the public in actual knowledge

I agree. The Cold War may have 'ended' in the '90's, but it actually shifted elsewhere (now China, obviously).

Actually, the cold war may have ended in Europe in the 90's but it didn't end the same in Asia. There are still four communist states; China, Vietnam, North Korea and Laos, although the economic system has radically changed in two of them.

Originally posted by Haknow
Good point - and for the most part, I agree with your analysis: the Chinese economy is artificially inflated.

Alas, this is also the case of the US and European economy, albeit through different routes (e.g. borrowing, financial speculation on inexistant or severly compromised financial products, the spread of toxic assets...etc).

This is true to an extent, but the housing bubble only equated to 17% of the US GDP at its peak back in 2005. Europe and the US economies are less oriented around debt than the Chinese economy is. I'd estimate that about half of all the growth from the US this past decade was based upon debt. That was primarily based around the housing boom/bubble. In China, it takes about $6-$8 of debt to get $1 worth of growth. So China is a far more extreme case than what we see anywhere else in the world.

What you have said of China is true for the US and the EU - their economies are bound to collapse as well.

Well, I think we all have to wonder how long this economic paradigm can continue onward. In the US, we technically already had a financial collapse back in 2008. But I am far more optimistic about the US than I am anywhere else. Free markets economics really is the end all be all. The US can and will be far more likely to bounce back faster than any other country primarily because of free market principals written into the foundation of this nation.

Also consider that 80% of the US economy is based on internal commerce, no other nation is this self sufficient. But there is only so much resources in this world. And unless we start finding a lot more, we will eventually run out. Of course this private companies that intend to mine asteroids, which will technically fix this momentary problem we face on this planet. Space is abundant in natural resources. With private companies in the US leading the charge like SpaceX and Planetary resources, I remain optimistic that humanity will overcome such hurdles.

But in my view, this sorry state of economic affairs makes a conflict more, not less, likely. After all, what better (for the victor) than a war to wipe the slate clean and start anew?

You derive your interpretation of this situation, it seems, form a traditional "supply-side"economics point of view; may I remind you this theory is based on more than a few assumption, few of which are actually realised in the real world. I wouldn't say it's irrelevant, but I certainly think it's limited as a way to understand the world and actual geopolitical dynamics.

Supply side economics is all based upon demand in a free market. It is the most efficient way, as well as the most sustainable economic model there is. You seem to almost be flirting with the idea that central planning has it right. I would disagree, as history has shown that central planning and fixed investment led growth always runs into a wall once credit diminishes and your left with a nonperforming loan problem. (debt)

Regards

rock427

Thank you for putting that out there in plain English.

It is something to consider. As far as a new Cold War with China goes. As long as there is no shooting then it's all good. Competition drives innovation and industry and gives us technical developments. Keeping all that in balance without blowing ourselves up is the key.

So just exactly does a "cold war with China" work exactly?

The US and Russia did not trade with each other,or borrow money from each other, or have massive American investment in Russia.

You know all the things that are going on between the US and China?

There are some common factors tho:

Russia stole technology from US
China stole technology from US.

Sure there is more just drawing a blank at the moment back to that China makes trillions off the current relationship with us and vice versa seems something is amiss here.

That famous "MIC" is dependent upon mass manufacturing of raw materials, and other materials "made in China".

reply to post by daaskapital


they realize we won't support more real war...

So they will keep stealing our money to pay for this fake one..

It essentially keeps them rich and keeps us less riled up about more war.

I think it will all come around full circle, I have always thought that the US was buying the cheap oil and cheap labor from the places it does for 2 reasons, first to make a buck of coarse, and the other is using up the other guys resources, the US doesnt hardly touch its resources, so they use all theirs up and we still have a full load and we did it for pennies.

Originally posted by rock427

Supply side economics is all based upon demand in a free market. It is the most efficient way, as well as the most sustainable economic model there is. You seem to almost be flirting with the idea that central planning has it right. I would disagree, as history has shown that central planning and fixed investment led growth always runs into a wall once credit diminishes and your left with a nonperforming loan problem. (debt)

Regards

edit on 2-8-2012 by rock427 because: (no reason given)

There seems to be a misunderstanding here. What I said was that supply side economics rests on theoretical assumptions that are, in practice, never fully realized in the real world. Indeed, the idea of the free market itself is a theoretical construct which assumes an equality between players through comparative advantage, the absence of barriers to trade, the perfect correspondance between offer and demand - all of which do not exist in the real world.

For that reason, it is a bit far fetched to claim that it is "the most efficient way" to run an economy. As for "sustainable"...I would also like to point out that the idea of the "free market" assumes ever growing consumption, which in turn stimulates growth, which stimulates consumption, and so on...The problem is, the resources available in the real world are finite! Therefore, an economic system based on perpetual growth through consumption is unsustainable by definition.

Lastly, may I emphasize I am not for "central planning" - whatever you hear by that - and, frankly, I don't understand how you got that from my comments...Or does the mere fact of questioning free market economics make me a "commie"?

I hope that's not the way you think. What I meant was that I am a "realist", not in the sense of realisme socialiste (which is a style of painting from the soviet era), but in the sense commonly agreed and referred to in the theory of international relations:

en.wikipedia.org...(international_relations)

Regards,

Haknow

Originally posted by Haknow
There seems to be a misunderstanding here. What I said was that supply side economics rests on theoretical assumptions that are, in practice, never fully realized in the real world. Indeed, the idea of the free market itself is a theoretical construct which assumes an equality between players through comparative advantage, the absence of barriers to trade, the perfect correspondance between offer and demand - all of which do not exist in the real world.

Haknow, thanks for the response.

It's not quite as complex as you seem to be making it. Supply side economics really is nothing more than providing a service for a product that is in demand.

You're correct in that resources are finite on this planet. But our solar system is rich in natural resources. We already have three companies vying for private space exploration. Planetary Resources LLC already has plans drawn up mine asteroids by the 2020's. I remain optimistic that mankind will always resolve whatever barriers lie in our way.