What will the world be like when China and India are military/economic superpowers?

Great Debates
21

If you want to know which nations will be dominant fifty or a hundred years in the future, focus on long-term economic strength, not current military strength. The average person in China is still desperately poor, yes. And their military is no match for the United States military, yes. But the Chinese government has set it self up to be the economic 500-pound gorilla of the 21st century, and there’s little reason to believe that any other nation will be strong enough to compete with them.

First, the military imbalance does not matter. China’s military is big enough that no one is going to fuck with them. People can count the individual ICBMs and nuclear warheads all they want, but the fundamental fact is that China is well enough armed to inflict severe damage on all potential enemies. They’re back to mutually assured destruction with regard to both India and the USA; hence the Chinese need not fear any military threats from either country.

Second, the Chinese have bought up a huge pile of American debt. For as long as they hold this debt, America must pay them interest. In short, the Chinese are getting a lot of our money. Further, we depend on them to continue holding the treasury securities they have and buying new ones. If they suddenly dumped all those bills, notes, and bonds onto the market, the American economy would collapse. As long as they have this axe poised over America’s head, America has a weak hand in negotiating with them.

Third, they export huge amounts of crap and import relatively little. Countries that export will grow strong, as those that rely heavily on imports will grow weak. It’s a fundamental fact of modern economic history.

(As far as China being forced to import food, I don’t think that will have a big effect. England has been importing food since the start of the industrial era, but that didn’t stop them from dominating the 19th century. The important fact was that they were a net exporter.)

22

Why?

I mean, once the bonds are sold, what difference does it make who owns them?

23

If we owe China a lot of money, does that mean China has leverage over us, or do we have leverage over China.

There are no policemen or collection agencies China can go to. If, say, we told them to stuff their debt, China would be left holding worthless paper. Sure, such a move would harm the United States. And as you say, if China tried to dump all it’s US debt it would collapse the value of that debt. Meaning, China would only get pennies on the dollar.

It’s like Bill Gates trying to dump all his Microsoft stock. He has 30 billion worth of stock at today’s valuation, but he can’t sell more than a fraction at today’s valuation because the presence of huge amounts of stock on the market would collapse the share price.

24

Not extactly true. While the PRC is a net exporter, it’s not all that much. Where the US gets gigged is with respect to our import/exports w/respect to the PRC.
From The Economist

“Foreign trade: In 2005 merchandise exports were worth US$762.7bn and imports stood at US$660bn (according to customs data), resulting in a trade surplus of US$102.7bn. On a balance-of-payments basis the trade surplus in 2005 was US$134.2bn, and the current-account surplus stood at US$160.8bn.”

Agreed, most of China’s nuclear tipped missiles are aimed at the US–but there’s a catch: it’s believed by our intelligence agencies that the PRC’s nuclear tipped ICBMs are in stand down mode. That is to say the nuclear warheads are in storage and rockets are un-fueled.

The PRC has long-term plans about assuming its role as an emerging power. Why should it waste energy on the externals (other than direct threats and Taiwan)? They’ve been around 5000 years. And we’ve be around about as long a frog fart.

25

Then I’ll probably be working customer service, answering calls from Bombay and pretending my name is “Ravi”.

Wild card: China is headed towards an ecological collapse, or it isn’t. They are approaching the environment with the same attitude displayed by the Stalinist industrialization plans. Coal is a primary (the primary?) source of energy, and its population of automobiles is skyrocketing. Add a huge population and pollution controls that only function as a means to bribery, and you got one goddam toxic stew.

It makes for a potentially interesting, if ghastly, experiment. Can they clean up the Peking air pollution sufficiently so that prospective Olympic attendees don’t, like, die and stuff.

26

Even if they can, the 2008 Olympics are gonna be really, really interesting, in the Chinese sense.

27

China has huge reserves, something like $1,000 Billion

For some time they have been making deals with countries that have raw materials.

I don’t think food is going to be much of a problem, much of their agriculture is incredibly inefficient, if they used USA/UK techniques and equipment they would be in danger of massive overproduction, and more dangerously a lot of ineficient labour would unemployed.

At some stage the Chinese are going to lose interest in trading with people who don’t have what they want (and need), their production will probably be retargeted towards their own population and States that supply them with raw materials.

Currently they are importing technology, but as we have seen with Japan, a technology importer can become a technology exporter pretty quickly.

28

What I meant is that, for instance, when the Portuguese rounded the Cape and opened up an alternate trade route to the East, the Mediterranean and the powers in that sea, Venice and the Ottoman Empire, found themselves sitting on a depreciating piece of real estate. The Ottomans did actually put up a fight for dominance of the Indian Ocean at that time, but lost, and having lost, were left behind.
In a similar way, right now trade routes are centered around the US since we are everyone’s biggest customer, but if that changes and China and India outstrip us at some point down the line, the world’s trade routes will be centered around those two countries, and Europe and the US will be at the literal fringes of the center of world trade. Unfortunately for us, that would, IMO, be more true for us than for Europe, because if you look around the Americas, there’s only three large, industrial economies: us, Canada and Brazil. Canada is more resource-dependent and simply doesn’t have the population to be a truly major industrial power. Brazil has a respectable population and could develop into a less resource-dependent economy themselves, but they have a long way to go as well, and aren’t growing as rapidly as China or India. The Americas overall simply don’t have the heft of Asia in terms of population, and aren’t overall as rich as Europe. So, I think we’d be even more left out than Europe, in a hundred or couple of hundred years, if the world turns into a China/India-centered world.

29

Alternately, the relative price of USA labour could fall dramatically compared with that of Chinese/Indian labour, and manufacturing could return to the USA

Something like Japan and Toyota.

I would expect that, if things carry on as they are, and nothing goes horribly wrong.

30

They possibly could come to have much greater influence, but with their massive populations it seems to me that they will never have anything close to as high a standard of living as the U.S. enjoys.

31

Japan did, Taiwan and South Korea are also pretty affluent.

Large populations don’t necessitate poverty.

32

But cheap labor does, doesn’t it? I mean, if industry returns to the U.S., but at the price of American workers having to compete with Chinese and Indian in a free global labor market . . .

33

Despite oddballs like Toyota, labor continues flowing away form the United States. We’ve lost a fifth of all manufacturing jobs to foreign countries in the last decade. In order for those jobs to flow back, wages would have to be lower in the United States than in other countries. Even if China and India did raise their populations to a decent standard of living, manufacturers could move elsewhere in the third world: southeast Asia, Latin America, Pakistan. As long as American companies can exploit slave la, excuse me, I mean low-cost labor elsewhere, they’ve no reason to create factories here.

34

They already ARE superpowers (well, China is and I suppose India a regional power)…if one doesn’t compare them to the US, the worlds only hyperpower. So…whats the world like today? :stuck_out_tongue:

I know you have a hard on for China and India BG…but I wouldn’t hold my breath for China and/or India to become the same kind of power the US has been since WWII. It ain’t going to happen in our lifetimes, if ever. They may become economic superpowers a la Europe. China may one day become a military superpower a la the old Soviet Union (I doubt it, but its possible). But I doubt ANY country any time in the next 100 years or so will attain the dominance the US has had since WWII…military, economic even cultural superpower (later sole hyperpower). Even if the fantasy of the US going completely down the tubes and becoming a third world nation happens, that won’t mean that China/India will ever take its place. At most what we will be back too is a bunch of regional powers of approximate parity eying each other and growling across their borders at each other and perhaps picking off (militarily, economically or through influence) their weaker neighbors. Sounds like a hell of a lot of fun.

It will be interesting if the world (a.k.a. Europe and friends :)) ever gets its wish for a world without nasty old America sticking our noses in to everything and fucking up the utopia that the world COULD be if we were just put back in our places. Of course, if we were asking this question a few hundred years ago at the height of the British Empire, I seriously doubt anyone would have predicted the US would become THE worlds power, outstripping every other nation in just about every measure…and I’d guess that there were plenty of folks who felt that the world would be SUCH a better place without those nasty Brits sticking their noses (and warships) into everyones business, blah blah blah. How’d that turn out? :stuck_out_tongue:

-XT

35

Dude their populations don’t even come close to India or China.

From wiki:

Japan: - 2005 estimate 128,085,000

South Korea: - July 2006 estimate 48,846,823

Taiwan: 23,036,087 2006 estimate

China:1,313,973,713

India: - 2005 estimate 1,103,371,000

Sure they may be able to be prosperous countries I’m saying they will never be able to enjoy as high a standard of living as Americans with such massive populations.

36

The world is already adjusting.

China scares me more than any other threat to the way of life for my children.

All my life, up till now, I’ve taken comfort as a Canadian in the economic power of the US to utilize the resources of the world to make my life enjoyable. To give me opportunities not available to some shmoe from a vast part of the world. Back in the 50s, if I was a lowly equipment operator, I could have had a high paying job in some third world country. Now, the equipment operator is a dime a dozen throughout the world. As a western society we’ve educated the rest of the world in our technology and sacrificed our middle class advantage in the process. We’ve relied heavily on our technological prowess, but we’ve sold it quickly and for cheap to the rest of the world. The rest of the world does not care about patents or intellectual property that makes US society work.

China now is booming, because we’ve convinced them of the value of capitalism. But we haven’t convinced them of the value of democracy. It wouldn’t surprise me that their middle class with income and size rivaling that of the US and a much vaster source of cheap labour, really cheap labour, puts them in a stronger position on the world stage. In short, the US has become increaingly marginalized.

Forget about the military. It is no match for a protracted engagement constrained by our sensibilities of wartime propriety. The US just cannot compete with China.The US canot compete with a capitalistic Russia. Or India. Or Muslim extemism. Have I said enough? This is a new world out there beyond any sense of western control .

As citizens of western countries, we’ve lost our ability to project our values. We can not compete with economic imperatives that satisfy ruling juntas, who operate on their own selfish agenda.

I cherish western values and I suspect that mosty of us who do as well inherited a serendipetous chain of events that got us to where we are. I don’t se it as likely to happen in China.

If the US has lost its influence in the rest of the world, it is my hope that western countries with western ideals can meet the challenge and disassociate themselves by pursuing technology toward economic and resource independance.

That is our future.

37

@Xtisme - The British Empire only lasted 100 years (it started about 1860) and was at its peak shortly after 1900 - it really was a bit of a flash in the pan.

@All

I fail to understand the reason why large populations should not be affluent, I suppose people are thinking of raw materials - but AFAIK Japan is singularly devoid of raw materials, as is Taiwan.

I am not a Marxist, and I’ve found the old duffer too turgid to read in the original, but when I was at Uni one of our Economics tutors showed us an early paper by him.

Basically he was saying is that what matters is the capital/labour ratio, and by capital he did not mean shares, bonds or deposit accounts - he meant machinery.

At a certain point you get to the stage when someone wants a brand new Hummer and the ‘labourer’ presses one of a number of buttons - and out it pops. If the labourer has been on the lash and has the shakes then he might hit the button twice and the ‘consumer’ has two of the darn things.

My understanding is that at that stage things get kind of funny, and you have ‘The Millenium’. A bit like life on a South Sea island where the fruit drops from trees, pigs are self basting and fish hop onto the palm leaf obligingly cooked to the ‘consumer’s’ whim.

In my view the major stumbling block to getting mass and universal affluence is raw materials, yet our technology is increasingly using cheap and plentiful raw materials for example silicon instead of copper.

Power is another problem.

I’m not that keen on the export of manufacturing and service jobs to cheap labour areas, but I can see that the tide will reverse, not necessarily in our lifetime, but barring mishaps, within about 50 years. Of course manufacturing will not be very labour intensive, but output will be so prodigious that everyone can enjoy a high standard of living, if not a high quality of life.

The Chinese are jumping from a very primitive low tech economy into something that is as high tech as anywhere in the world. My hunch is that they are doing it by education, regardless, one can see that they are doing it - and if they can, so can others.

38

They’re also much smaller countries in land area. What matters, when it comes to gauging individual affluence relative to national resources, is population density.

39

Where are you deriving that 1860 figure from? I’d say British dominance started even before the Napoleonic Wars, and certainly they were THE dominant power after France’s defeat. This is the first time I’ve ever heard that the British Empire was a ‘flash in the pan’…considering it was probably the most powerful empire in the history of man kind. Regardless, the British were certainly looked on during their time as a world superpower as the US is looked on today…which was the point I was making.

-XT

40

They haven’t even been around 60 years yet. OTOH, if you must count cultural continuity, certainly we date back as far as Ancient Greece and possibly all the way to Ur.