By
Brooke McKean
January 19, 2007
An army one billion strong. A vengeful dictator determined to take power from the United States. An economic and political giant.
Many believe China is on its way to being a superpower and that, one day, it will fight the United States. This scenario is highly unlikely, especially in our lifetimes. China's economy is undoubtedly growing at a rapid rate (more than 10 percent in the last two decades), allowing its "communist" dictatorship to increase military spending and strengthening its persuasion in the global South.
The relationship between the United States and China, however, is nowhere near a violent outbreak. The United States and China need each other more than many realize. U.S. firms have initiated China's development in the last two decades, while U.S. consumers have paid the tab for it.
In 2005, 21.4 percent of Chinese exports — or $50 billion — entered the United States. If China and the United States were to end relations, U.S. firms could be forced to leave the country, preventing hundreds of billions of dollars in exports each year. China is still a poor country by Western standards, and the country could not sustain its economic growth without the United States.
Few realize, in addition, that the United States needs China as much as China needs the United States. China's export-based economy has left it with one of the world's largest account surpluses, which is found by subtracting import from export revenues. And a significant sum has come right back to America as China continues to buy U.S. bonds, essentially funding the trade deficit in this country.
Sixty percent of China's $1 trillion reserves is spent on U.S. bonds.
The dollar has declined in the last year primarily because China decided to buy fewer U.S. bonds. Our economies are bound in a peculiar economic foreplay that neither country can stop in the near future.
And if economic relations were broken due to a political scuff, both economies would be devastated. This is not the time to pick a fight, nor will the time come.
It will take many decades for China to reach the economic, political or military capacity of the United States. Right now, the U.S. Gross Domestic Product purchasing power parity (GDP PPP) per capita (a measurement of wealth based on income and the cost of goods in a country) is $41,600, while China's is $6,800.
China is expected to have the largest GDP PPP in the world by 2015, yet this number disregards the extreme inequalities in China between the urban and rural areas.
However, Third World countries have many reasons to watch for China, both politically and economically. China's aid disbursements to other poor countries are growing rapidly. And the conditions? Don't recognize Taiwan as a country, export your raw materials to China, and be aware of Chinese political interests. China is also beginning trade negotiations with many Southeast Asian and African countries.
If China is to continue growing, it will need to extract natural resources from other developing nations. However, this growing interconnectedness between developing countries will prevent military action. Chinese political sway is growing with its economy, yet this sway is growing with economic connections. It is not reasonable for countries to fight if their economies are dependent on each other.
China's rise does not signal global violence, but rather a new economic order in which U.S. power is balanced.
And this is a good thing. The United States currently has a monopoly of power, a global hegemony capable of acting and doing anything it wants. Monopolies are just as bad in politics as they are in economics.
With the rise of China, India, Brazil, South Africa and other large developing nations, the United States' political power will lessen through competition. This will not mean that all U.S. jobs will be outsourced and U.S. citizens will become poorer, but it may prevent U.S. domination in all global politics and random acts of violence, like the Iraq war, which are undoubtedly linked to America's overarching global power.
A decline in U.S. persuasion will benefit all citizens in the developing world, as other developing nations begin to influence economic and political relations.
Reach columnist Brooke McKean at opinion@thedaily.washington.edu.
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