from MacroScope:
Is U.S. economic patriotism hurting?
Any Americans believing that their country is being bought up by the Chinese might want to pay heed to a new report from the Vale Columbia Center on Sustainable International Investment. It says that China is a minimal player in terms of foreign direct investment in the United States and that Washington should in fact be doing a lot more to get it to gear up its buying.
To start with, look at the magic number. In 2010, the last year for which numbers are available, only 0.25 percent of FDI into the Untied States came from China. Switzerland, Britain, Japan, France, Germany, Luxembourg, the Netherlands, Canada were all far bigger. In the U.S. Department of Commerce's report on the year, China, numbers were so small they were lumped into a category simply called "others".
This is not enough, the Vale Columbia report says. Given China's burgeoning economic role across the globe, America can benefit from a lot:
First, FDI provides an influx of capital into the struggling economy, increasing employment at no cost to the taxpayer. Second, jobs in foreign affiliates are typically better remunerated than similar jobs in domestically owned companies. Third, keeping the US open to foreign investment demonstrates a global example for international openness. Finally, Chinese money refused by the U.S. could alternatively be directed to competitors or even the U.S.’s enemies.
(On the latter point, its worth reading our global economic correspondent Alan Wheatley's story on China's influence in Europe)
The Vale Columbia report acknowledges that Chinese FDI is controversial - primarily because a lot of Chinese companies are state-controlled and therefore raise fears that FDI may be more strategic that profit-seeking. There is also the concern about subsidies, piracy and economic espionage.
But the gains from opening the door to Chinese outweigh the risks, the report -- entitled Economic Patriotism: Dealing with Chinese direct investment in the United States -- says, recommending a series of steps such as dumping reciprocity clauses in FDI bilateral dealings.
Forget G-Zero, it’s China that’s leading the world
This is the third in a series of responses to Ian Bremmer’s excerpt of Every Nation for Itself: Winners and Losers in a G-Zero World. The first response can be read here and the second here.
Ian Bremmer is launching his new book with an eye-opening observation above the uncertain future of global order. This time he is warning us of the dangers of having a world with no clear leader. In his view, the United States and Europe are in a weak position to sustain any hegemonic position. In particular, their focus on austerity measures can complicate their role as military leaders of the world (e.g., NATO’s role). Moreover, multilateral organizations, such as the G7 or the G20, will not do the trick either. The G7 is in the middle of the worst crisis in almost a century, and the G20 has members with preferences that are hard to aggregate. BRICS, the organization supposedly coordinating the efforts of Brazil, Russia, India, China and South Africa, is too young and preoccupied with other issues to act as the new hegemon. What, then? Where is the world going? Who will emerge as the new leader?
The obvious candidate is China. I have not read the entire book, so I do not know precisely what Bremmer’s position is on China. But because the book’s argument is that there is no real global leader now, I assume he believes China will not be taking that role in the future either. I want to argue, in contrast, that China has begun to play that role and has the potential to become a hegemon. Yet, if China rises to be the global leader, there will be major tensions in the institutional foundations of global capitalism as we know them today. As China’s leadership role grows, the global institutions that have ruled the world in the last 20 or so years will have to change.
Bremmer argues that the most important tools for establishing global power and leadership today are the traditional economic levers and the cyber-capacity to conduct industrial espionage and protect or control information and communication across borders. I would argue that China’s proven track record in both of these areas makes it an ideal candidate for world leader. It is the champion of cyber-censorship and the only country that has tamed large global corporations, compelling them to share user information with the government. Moreover, any major company doing business in China already has bent over backwards to share information and intellectual property with its “forced” local partners (i.e., partners that are the product of mandatory joint ventures dictated by the government of Beijing or any of the Chinese provinces).
China is champion when it comes to using economic tools to impose global discipline, induce countries to do what it wants, and change global conditions. China indirectly determined interest rates in the United States for years, acting as the largest buyers of Treasury bonds. It also uses conditional loans to get African governments to do what it wants, including favoring Chinese companies over locals or Western companies. Furthermore, China has increased its power within the IMF and other multilateral organizations and has been sought after by the EU to participate in its bailout fund.
In addition, China has already been challenging the power of Western countries and organizations for years. It is emerging as a superpower on the sidelines, securing access to natural resources and exercising soft as well as military power in its backyard and beyond. In Africa, China has filled the void left by international organizations, acting as a development agency and as a soft (sometimes hard) imperial power. Many criticize the means, but nobody questions the results, e.g., new roads, bridges, buildings, ports, railways, etc. A similar phenomenon is beginning in Latin America, especially in natural resources. In particular, Chinese investments in oil exploration in Cuba are part of this trend and show another important dynamic as well: China likes to play in the U.S.’s backyard. In fact, China, more often than not, works against U.S. wishes, whether by not supporting efforts to impose tight sanctions on Iran, or pushing the boundaries of the South China Sea, or not being as active as it could be when it comes to North Korea.
So, what if China does become the next global hegemon? There will be three major changes in the global diplomatic and economic equilibrium. First, multilateral organizations, as well as the United States and Europe, have been exporting democracy and human rights as universal values. Many times they have imposed democracy or human rights provisions as part of conditional agreements tied to loans or foreign aid. China does not believe in those values and does not play by those rules. Chinese interference in Sudan, basically promoting its own investments, weakened Western efforts to impose sanctions on the Sudanese government for its human rights violations and support for terrorism. In 2004 China also rescued Angola and its autocratic leaders with a credit line when the IMF was about to impose tough conditions, mostly focused on opening the books of the country and its oil company, tied to a loan package.
China may be developing into a world player in the near future but it is not going to be a dominating power or a “hegemon” like the US of today or the GB of yesterday. This is because as a continental nation (as opposed to an island nation like GB or Japan) with a long history of both good and bad times the people have settled into a set of values unlike that of the western nations. For a western scholar to think that China will behave like the US today is because few makes any attempt to understand the language and even less so to study Chinese history and culture.
China had a world class navy in the Ming dynasty long before GB ruled the waves. Even the all powerful emperor at that time found that effort not sustainable. China learned the lesson well after the emperor grounded all war ships and banned all adventure overseas.
China also learned that the many occurrences of bad times in its history were with a weak central government. Starvation and deaths were rampant at those sorry days. Thus it is the ingrained human values in Chinese culture to have sufficient food, clothing and lodging for all. This is fundamental and all else are secondary.
China has also learned that human nature as it is, the western election tools did not bring in democratic or even good government as the losers in the election would do everything in their power to bring down the government regardless of the urgent need to achieve those fundamental human values. Good governance (as opposed to good government) may be an ideal like communism that is impossible to achieve.
China understood it could not be a world cop nor a charity to all nations. Its primary target is to meet the fundamental values for its people. Unlike Christian religion of a “god” making “people” look like Him, China believe in good leadership to achieve those fundamental values by exploring different components of political systems that suit itself more. It is still “work-in-progress”. Thus China is no “god” and in no position to tell other nations what system they must adopt for their own development now or in the future as it is no doubt different for different nations. The Mao’s era has long gone.
Could China be a “hegemon” in the same manner as the US of today? The chance is less than 0.1%. Could China lead the world? History has shown that it has done that in the past and may well do so again in some respect but not in the way many western nations feared.
from Ian Bremmer:
Fallout is just beginning in North Korea
By Ian Bremmer The opinions expressed are his own.
There are many surprising things about Kim Jong-il’s sudden death, not the least of which is that it took two days for the rest of the world to hear about it. Yet most surprising is the sanguine reaction of the global and especially the Asian markets. On Monday, or actually Sunday as we now know, the world woke up to its first leaderless nuclear power. Coming as close as anyone could to filling his seat was his youngest son, who is in his late twenties. There’s no way these facts were accurately priced into markets that took just a relatively minor dip as a first response. The news from North Korea appears to have been taken far too lightly, and just a few days out, it’s disappearing from the front pages.
While Kim Jong-un’s status as heir apparent seems to tie a nice bow around the situation, let’s get real for a moment. The son of the elder Kim only appeared on the North Korean stage after a stroke necessitated succession planning in Kim Jong-il’s regime in 2008. Consider that founder of the country Kim Il-sung put his son, Kim Jong-il, in front of the citizenry as his heir for more than a decade before his 1994 death. That decade was precious time; time Kim Jong-il spent consolidating power and putting his own people into high government office— and he was over 50 years old when his father passed away. Kim Jong-un has been deprived of that head start; he’s got to rely on whatever ground his dead father managed to clear for him since his 2008 stroke. A couple of years at his father’s side -- and a promotion to four star general -- is scant time for the younger Kim to have developed a real plan for ruling, or real allies in government.
That said, don’t expect Kim Jong-un to be deposed. There won’t be a North Korean spring -- for real or for show -- anytime soon. The country is too backward and too brainwashed to mount any sort of populist opposition to the ruling regime, and its people have little if any knowledge of the outside world. Even if Kim Jong-un proves unable to consolidate and retain power, all that would replace him as the head of state is a military junta or strongman; there’s no democracy on the horizon, given the country’s current sorry state of affairs.
The important relationship to watch going forward will be between North Korea and China. Kim will want to impress his people by letting more food into the markets and increasing their terrible standard of living in whatever marginal way he can. He’ll need cash to do so, and will probably call upon China to help. China is North Korea’s last substantial benefactor in the world. In a classic diplomatic sense, because North Korea is America’s enemy and South Korea is America’s friend, China has little choice but to keep propping up the North. If China changes its tack now, it could find North Korea inching towards reunification with the South, putting a firm American ally right on its border. The question is, will China support Kim Jong-un wholeheartedly, or will it too take a step back and see what emerges from the power struggles sure to be playing out behind the scenes at this very moment?
Meanwhile, the U.S. has taken the right approach to this complicated situation: the White House has decided to sit back, watch and wait. It could, and likely already is, offering behind-the-scenes humanitarian relief to the North Korean people. It should continue to offer any such assistance that it thinks will be accepted. The Obama administration should not by any means be applying diplomatic pressure to restart six party talks or anything else of the sort. In essence, the free world should be rooting for Kim Jong-un to stabilize the country so that it can again try to bring North Korea out of the dark ages in an orderly fashion.
(quote) “British SAS used to say … shoot the first person who makes a move (hostile or otherwise) to ensure authority.”
still happens in england, during peaceful marches and even when innocently catching a train
(http://www.guardian.co.uk/uk/2005/jul/2 3/july7.uksecurity11)
Is Burma the next Mexico?
By Federico Varese The opinions expressed are his own.
Hillary Clinton had many “hard issues” to tackle during her recent visit to Myanmar. Yet there was no mention of one of the most, if not the most, difficult issue Burma faces: their lucrative drug trade.
Northern Burma is the home of the “Golden Triangle,” a hub for opium production and the location of hundreds of heroin and amphetamine refineries. So how do political leaders and the international community plan to tackle this problem in the event that Burma truly becomes a democratic country?
The totalitarian regime which has ruled Burma since 1962 has been, to a point, successful in keeping the production of illicit substances under control. In 1999, Burma’s notorious military junta (which is now dissolved) started a ruthless elimination plan of opium in the Golden Triangle (the Shan State, the Wa Region and the Kachin State). The region produced one-third of the world’s opium in 1998, but that figure was down to about 5% nine years later. From 2006 to 2007, the army eradicated 8,895 acres of opium fields. A 2007 United Nations Report trumpeted that “a decade-long process of drug control is clearly paying off.”
The actual story is a little more complicated. The regime did manage to reduce opium production, but this policy led to an increase in the production of amphetamines, methamphetamine in particular. The U.N. estimated that at least 700 million tablets were shipped from Burma to Thailand in 2003 alone, which is about 20 tons of methamphetamine, or 7.5% of what is manufactured globally.
Most recently, opium production in Burma is on the rise again, pushed by an ever-increasing demand for heroin in China, as documented by an eye-opening report compiled by the Transnational Institute, an NGO based in Amsterdam.
In order to see these developments for myself, I spent time this past summer in Muse, a town in the northeast section of Myanmar, and Ruili, right across the border in the Chinese province of Yunnan. “What you’ll see in Ruili you won’t be able to observe in any other part of China,” the taxi driver told me, surprised to find a foreigner around these parts. The place is reminiscent of a Mediterranean country, a relaxed atmosphere reigning supreme, where it’s hard to come by taxis and open shops in the mornings.
Unlike Thailand, see if you can score drugs on the streets of Burma . . .
from Ian Bremmer:
Why the U.S. is not—and never will be—Japan
By Ian Bremmer The opinions expressed are his own.
Though I’ve already written about the recent Munk debate in Toronto elsewhere, it’s worth taking some space to expand on my position, and why the U.S. truly is not going to experience a Japan-style lost decade of economic stagnation.
(The debate was on this resolution: Be it resolved North America faces a Japan-style era of economic stagnation. I joined Larry Summers in arguing the Con side against Paul Krugman and David Rosenberg.)
Let’s start with the political realities: Japan experienced 50 years of single-party rule. In the last 22 years, the country has had 17 prime ministers. Recently, the Democratic party there defeated the long-time incumbents, the Liberal Democrats, only to find that they had no idea how to govern the nation. They had no idea how the ministries worked, no relationships with industrialists or financial institutions, no grasp on the levers of power in society, and no strong policy apparatus. If the U.S.’s political situation looks bleak, consider that alternative.
In fact, the political situation in the U.S. may not be pretty or easy to watch, but it’s functioning. The President and Republicans continue to hammer out centrist deals on issues like tax hikes and the debt ceiling, albeit at the last possible minute after much gnashing of teeth. Ignore naysayers who say that budget supercommittee doom is coming; a deal will likely get done. And after the presidential election, things will get even better. That’s because Republicans are almost certain to retain the House and take the Senate. Whether Obama or the likely GOP candidate Romney wins the election, their dealings with a unified legislative branch will become far easier than the current divided government.
Our stable government is why foreign investors continue to flood into the dollar. Paul Krugman may have argued at the Munk debate that a strong dollar is what’s harming the U.S. economy, by making the country less internationally competitive, but I believe the confidence that foreign and sovereign investors continue to show in US debt outweighs that negative. Ask yourself what the better scenario is: a strong dollar that puts us at a slight relative disadvantage, or a pullout of investment dollars in the U.S. altogether? Investors continue to make bets in dollars, and that’s good for us. Yes, gold has risen dramatically in recent years, but "gold" is not a country. When investors need security and stability in currency, only the U.S. can still claim to provide it.
Krugman is also frustrated that the U.S. can’t move on a dime to enact policies needed to slam the country out of its current GDP growth lethargy. Looking around the world, there are only a couple countries of size that I can point to with that ability. One is Russia. Vladimir Putin has positively gutted that Moscow's fledgling institutions to let his will be done. Their growth rate has been phenomenal, but at what cost? No one can say what will happen to Russia when Putin exits the stage, and that’s not a situation the U.S. will ever be in. Our institutions endure.
LOL this guy writes a paper like he just discovered something the whole world never knew already. Congratulations guy for showing us the OBVIOUS. Good grief your paper reads like a crappy graduate thesis proposal. Reuters you really hit the bottom of the barrel on this one… You want to know whats wrong with the world guy? We keep wasting our money on columns and jobs like this that add nothing to the productivity of this world.
from David Rohde:
China’s newest export: Internet censorship
Yet the days of Americans piously condemning China’s “Great Firewall” and hoping for a technological silver bullet that would pierce it are over. China’s system is a potent, vast and sophisticated network of computer, legal and human censorship. The Chinese model is spreading to other authoritarian regimes. And governments worldwide, including the United States, are aggressively trying to legislate the Internet.
“There is a growing trend toward Internet censorship in a range of countries,” said Rebecca MacKinnon, a prominent online democracy advocate and author of the forthcoming book “Consent of the Networked: The Worldwide Struggle for Internet Freedom.” “The same technology that helps secure your network from attack, that actually enables you to censor your network also.”
The problem is not software or hardware developed in a secret Chinese government laboratory. Recent news reports have uncovered American and European companies selling surveillance technologies to Libya, Syria, Bahrain, Thailand and other governments that block the web and brutally suppress dissent.
While the Egyptian government’s attempt to shut down the Internet during the Tahrir Square protests drew headlines, western governments are increasingly using the web for law enforcement surveillance. In a biannual transparency report released earlier this month, Google reported a 70 percent increase in requests for content removal or user information from the American government or police in the first half of 2011. Brazil filed the most requests, followed by Germany, the U.S. and South Korea, according to The Guardian.
Western companies are also under fire. Research in Motion, the Canadian firm that produces Blackberry smartphones, acceded to demands from The United Arab Emirates, Saudi Arabia and India for access to its users’ email messages. And the Electronic Frontier Foundation, an Internet free speech group, has accused Cisco of selling surveillance equipment to the Chinese government that is used for human rights abuses.
A core problem is the pursuit of the almighty online dollar. An extraordinary story in The Guardian introduced readers to Jerry Lucas, the president of TeleStrategies, a Virginia company that organizes conferences around the world where firms sell surveillance and other technologies to governments. In an interview, Lucas said companies have no ethical obligation to determine if their products are being sold to regimes that will use them to suppress dissent.
“That's just not my job to determine who's a bad country and who's a good country,” he told the reporter. “We’re a for-profit company. Our business is bringing governments together who want to buy this technology."
Here’s something more to the point. The Librarians of any municipal library are the censors and filters of their holdings and there is seldom any complaint from anyone that they exert quality control. They filter out fakes, scams, and garbage. Sometimes they can go too far and start filtering out books they find objectionable of that some patron may find objectionable. And they are very like ODC description of Google in that they will tend to stock the books most in demand. They always have limited shelf space.
Reuters allows users to report abuse, as you know. A few of my early posts were pulled and I never knew why. They weren’t obscene or off topic and didn’t violate their rules as far as I could tell. But someone may not have liked what I had to say. That was a form of petty, vote-of-one censorship, as far as I know.
Another thing Librarians can do – and I know this from personal experience – is to cull valuable or rare books when they notice them. I have seen this happen twice. Once at a university library where an antique copy of a famous French architectural book vanished and the librarian (the same man who was there when I first saw the set (with Louis XV’s imprimatur) swore he had never seen it. It happened again in the small town I live in now where a copy of “Twilight in the Forbidden City” by RF Johnston (the movie had come out) disappeared about a year after I first noticed it. The librarian also didn’t remember seeing it.
The Google search that ODC mentions – not the only search engine but the most aggressive (I am more or less self taught on the computer I have now and the Google search engine found me before I even knew it existed) always seems to find hundreds of thousands of entries. But years ago when I first got my computer, I once tried to see what pages hundreds of entries later actually contained. I found that most of them were repetitive of the first 10 to 20 pages of entries. In a way – it’s a waste of time to bother to list them. I also suspect that paid sites – or rather higher cost sites will get more traffic than less expensive web hosting sites.
When I listed my own website for my small business, I was asked to pay more for more aggressive placement. I declined because I didn’t understand much about the services and didn’t trust that the fee actually bought more exposure. A Google search couldn’t find the title pages of my web site even when I put every key word I had used for it. None of the search engines may be as immune to “bribery” as they seem. The marketing of net access is a black box to most users. The consumer of Internet content receives zero assurances about almost anything on it.
I also resent the way tool bars will attempt to take over my home page and I am not always adept at stopping them. They can be clever and sneaky. The Internet is somewhat hazardous. Pop up ads, spam, etc. can be dealt with and there are free anti-virus programs etc. that seem to work fine. I do everything I can with free-ware and seldom use paid for services or I wouldn’t bother with the machine at all. It could be come a very expensive appliance and so many of the protective services could be scams themselves.
There is a world of difference between quality control and censorship but the discussion is not making that distinction.
from David Rohde:
Will “Made in America” sell in China?
Update: My apologies. In the first version of this column, I confused two different Camaro models. A corrected version is below.
SHANGHAI –When the third film in Hollywood’s Transformers franchise debuted here in July, vast numbers of young Chinese flocked to movie theaters -- and Chevrolet dealerships. Wealthy moviegoers wanted to buy one of the film’s half-car, half robot main characters, a bright yellow Chevrolet Camaro coupe called “Bumblebee.”
“Everyone knew Bumblebee,” said Richard Choi, the director of sales and marketing for Chevrolet in Shanghai. “I had to get the press guys to call it Camaro, not Bumblebee.”
Over the summer, Chevrolet dealers in China sold about 350 400 bright-yellow Camaros. A separate Camaro model specifically designed to look like “Bumblebee” sold 2000 units worldwide, but will not be available in China until December. nearly one-quarter of the 2,000 “Bumblebee” Camaros the company sold worldwide.
Chinese observers say Chevrolet, though, could have sold vastly more Camaros in China. Chevrolet built the specialized Camaros each Camaro in the U.S. only after it received specific orders, creating a three-month-delay in delivery that frustrated Chinese consumers.
At the same time, transportation expenses, as well as Chinese tariffs and currency manipulation, make a Camaro cost roughly twice as much to purchase in China -- approximately $70,000 -- as it does in the U.S.
Choi, the Chevrolet sales director, downplayed the delivery time and said the Camaro sales showed that American brands can soar in China.
The fact that Chinese Citizens have to pay 100% premium from the domestic USA price is a demonstration that China is imposing direct or indirect barriers to US sales of goods and services in his territory. We are so far from a real free trade, looks like a lot needs to be done to favor export of US made products.
from Africa News blog:
Was South Africa right to deny Dalai Lama a visa?
By Isaac Esipisu
Given that China is South Africa’s biggest trading partner and given the close relationship between Beijing and the ruling African National Congress, it didn’t come as a huge surprise that South Africa was in no hurry to issue a visa to the Dalai Lama.
Tibet’s spiritual leader will end up missing the 80th birthday party of Archbishop Desmond Tutu, a fellow Nobel peace prize winner. He said his application for a visa had not come through on time despite having been made to Pretoria several weeks earlier. (Although South Africa’s government said a visa hadn’t actually been denied, the Dalai Lama’s office said it appeared to find the prospect inconvenient). Desmond Tutu said the government’s action was a national disgrace and warned the President and ruling party that one day he will start praying for the defeat of the ANC government.
It’s the second time the Dalai Lama has been unable to honour an invitation to South Africa by Tutu after failing to make it to a meeting in 2010.
South Africa will certainly win more plaudits in Beijing, which last week agreed to $2.5 billion in investment projects with during a visit by South African Deputy President Kgalema Motlanthe.
But pro-Tibet activists say South Africa is undermining its credentials as a country of freedom and democracy, established after the end of white minority rule a generation ago.
So what if the world community had ignored apartheid for all those years? Now what country has the guts to stand up for some principles or is that no longer important to them?
Can China afford to downgrade the U.S.?
By Joseph S. Nye, Jr. The opinions expressed are his own.
After the rating agency Standard & Poor’s downgraded America’s long-term debt, China said that Washington needed to “cure its addiction to debts” and “live within its means.” It must have been a delicious moment in Beijing, accustomed over the years to lectures from Washington about its management of the yuan.
But actions speak louder than words. The real test will be whether China moves away from the dollar in any significant manner. While it makes modest adjustments to its reserve holdings, there are few good alternatives to the dollar. And while it calls for an international basket of currencies to replace the dollar, there are few takers. Of course, China might move toward opening its currency and credit markets in an effort to make the yuan a reserve currency, but the authoritarian political system is unwilling and unprepared to move to that degree of economic freedom.
Many commentators see the downgrading of American debt as a great shift in the global balance of power between the U.S. and China. Some wags have warned the American navy not to sail too close to China, because if the Chinese captured our ships, we would no longer have enough money to ransom them. But such jokes misunderstand the nature of power. Analysts point to China’s seemingly unstoppable growth and its holdings of United States dollars. But as I show in my latest book, The Future of Power, they fail to take into account the role of symmetry in interdependence in creating and limiting economic power. If I depend on you more than you depend on me, you have power. But if we both depend equally upon each other, there is little power in the relationship.
Some observers claim that China could bring the United States to its knees by threatening to sell its dollars. But in doing so, China would not only reduce the value of its reserves as the price of the dollar fell, but it would also jeopardize U.S. willingness to continue to import cheap Chinese goods, which would mean job loss and instability in China. If it dumped its dollars, China would bring the United States to its knees, but might also bring itself to its ankles. The situation, analogous to the Cold War’s balance of terror, where the price of aggression was the inevitable destruction of both sides, has both sides eager to maintain the balance of interdependence even as they continue to jockey to shape the structure and institutional framework of their market relationship. In 2010, when the United States angered China by selling arms to Taiwan, some People’s Liberation Army generals suggested that China punish the U.S. by dumping its dollars. The Chinese leadership wisely rejected their advice.
On American power relative to China, much will depend on the often underestimated uncertainties of future political change in China. China’s size and high rate of economic growth will almost certainly increase its relative strength vis-a-vis the U.S. This growth will bring it closer to the U.S. in power resources, but doesn’t necessarily mean that it will surpass the U.S. as the most powerful country. Even if China suffers no major domestic political setback, many current projections are based simply on GDP growth. They ignore U.S. military and soft-power advantages, as well as China’s geopolitical disadvantages. As Japan, India and others try to balance Chinese power, they welcome an American presence.
The United States faces serious problems regarding debt, secondary education, and political gridlock, but one should remember that they are only part of the picture. In principle, and over a longer term, there are solutions to current American problems. Given the challenges they face, both China and the United States have much to gain by working together. As the largest and second largest economies in the world, the two countries have a responsibility to provide such international public goods as financial stability and less carbon intensive growth. But hubris and nationalism among some Chinese, as well as unnecessary fear of decline among some Americans, make it difficult to assure this future. Extrapolating the wrong long-term projections from short-term cyclical events like the recent financial crisis or the S & P downgrade can lead to costly policy miscalculations.
I think the argument follows the common complacency and linear thinking of most western scholars. China could use its reserves to bring down the US, yes, the problem is that the author is thinking not like the Chinese but like a westerner with lots to protect. If things go sour what’s left for the Chinese, hold our worthless dollars?
I think a bit of dialects might help; and history. Technological supremacy is no longer in the hands of a few rich countries that by the way became that way through colonialism and the benefits of being the only country standing with a built up economy after WWII.
Things are changing and while the author makes very good points, they only make sense if one puts visors on and only sees what is only in front of one’s eyes. He seems to ignore the great damage that Americans themselves have been making to their own country.
What is the best strategy against Chinese cyberattacks?
By Ian Bremmer The views expressed are his own.
All eyes should be peeled on China, but not for the reason you think. While the biggest structural risk right now is global rebalancing, especially between China and the U.S., there is another important threat from China: cyberwars. Cyberattacks are one of the biggest fat tails (along with climate and North Korea).
It’s no surprise that the latest Google hack attack came from China. The presumption is that the vast majority of cyber attacks hitting the U.S. are coming from the Chinese government. It’s very hard to know where threats are originating – country-wise and/or person-wise — because it’s very difficult to go back and figure out the paper trail. But at a minimum, there is an environment in China that tolerates cyber attacks.
Proprietary information around technologies – gaining profit shares, increasing revenues – allows a country to be much more economically competitive. China has leverage because everyone wants to get into China. If you want to make something in their country, you have to share the technology.
The Chinese government can really benefit from having access to proprietary data, whether it’s about Exxon’s oil reserves or pricing of commodities of proprietary technologies, such as American telecommunications. China’s become much more competitive and therefore has become much more of a threat. If it’s using a non-judicious system to gain economic advantage, we need to take that very seriously.
China did something similar with high-speed rail – and that was through legal means. They undermined German and French companies in order to gain access to the technology and they now have built the best high speed rail system. If they can access that kind of information through hacking, that’s going to be seen as a direct threat.
This isn’t to say that the Chinese are evil. Historically, Western institutions invested in China, but then took the money back West. China obviously wants a good chunk of that action.
Show some evidence!You are foolish.Here has a chinese proverb to give you this foolish:allow government to fire the residential house but the citizen cann’t light a candle!
