EU becomes China's biggest trading partner

EU Observer ^ | January 10 2005 | Richard Carter

[SunkenCiv]

Officials from the Chinese trade ministry, quoted by the China’s People Daily, say that China has also become the EU’s second largest trading partner after the US... disputes between the EU and China remain, including over the ban on Chinese arms sales. The EU also wants greater market access to China.

[SunkenCiv]

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[henderson field]

"The EU wants better access to China."
So does everybody else, including the U.S.
And then, in the year 2020, there'll be war with them and no one will have any commercial access to them.
By then they'll have all the money so they won't need to trade with anyone.

[CasearianDaoist]

You realize that China has only a 1 trillion dollar economy don't you? What is interesting here is that the EU is not running a deficit with China. Could this be because China wants to buy EU arms? Let us not forget that a great deal of those high tech arms incorporate American R & D.

It is time to get tough with China and the EU. I will believe it when I see it.

[snowsislander]

You realize that China has only a 1 trillion dollar economy don't you?

Actually, China's international trade figures alone exceeded 1 trillion dollars in 2004:

China's exports rose 35.4% in 2004 from a year earlier to $593.4 billion, while imports climbed 36% to $561.4 billion, the ministry said, citing customs statistics.

I think that the generally accepted figure for Chinese GDP is more like 3-5 trillion dollars, depending on how you like to count things.

[SunkenCiv]

China will dangle that carrot of the "huge" Chinese market as incentive to get those European arms. But obviously, if China sells much more to the US than the US sells to China, there can't be that much of a market for EU goods.

There's only one reason for China to be accumulating arms, and that is for a war against either its neighbors -- such as sovereign Taiwan -- or against the US.

My view is, the US needs a working missile defense, and a new class of sub-hunting subs, perhaps self-guided, unmanned, stealthy, small robotic subs.

[CasearianDaoist]

the 3 to 5 trillion i a PPP index. I cannot read the article you posted as I will not register with the LA Times. Can you point me to a primary source on that? I go to China and I doubt all those figures, particularly the GDP figures. I would like to see your sources. For China to to have those sorts of numbers it would have had to have had 100 percent growth rates in the last few years. Remember, I am talking about real GDP.

[CasearianDaoist]

I looked it up. That is the total of imports exports, inputs and outputs, including energy and investments (also appears to be an "official projection") so it perhaps is not the bet indicator. One would have to use the same metric against our economy and not just compare it to GDP. We could split the difference and say a 2 trillion GDP. That is a long way from "having all the money."

They of course cannot sustain that sort of growth do to structural economic and social challenges and ever growing Geo-political pressure - they cannot maintain the dollar pegging and the market restrictions for very long. Yes, they have more "structural depth" than Japan had as it came up in the world, but they also are up to a lot more questionable shenanigans. In the near to mid term, I feel that China's economic clout is exaggerated considerably. Long term - meaning out two or three generations - it is probably not taken seriously enough.

That is not to say that our policies with China in almost every area are not in shambles. Certainly we need much reform here. I do think that the Bush Administration is weak in this area.

[CasearianDaoist]

do=due

[snowsislander]

Like you, I am no fan of GDP via PPP numbers, particularly when you are discussing wildly different countries. Splitting the difference at 2 trillion dollars of GDP is fine by me -- I suspect that even the customs numbers I cited have some big problems in them.

But I don't discount things like the massive growth in raw material imports that China is seeing -- numbers in excess of 30% in one year are just incredible. China is now the world leader in raw steel -- in fact, they produce more than the E.U. does, and more than all of North America (well, that's mostly us since Canada isn't all that large of a producer of raw steel.)

If this were some vigorous young democracy, that would be one thing. But this is a totalitarian regime, and that's just not good in my estimation.

(If one did use such a measure of comparing exports/GDP, then let's see, our exports for both goods and services are a bit over 1 trillion dollars, and our imports are a bit over 1.5 trillion. So that's something over 2.5 trillion dollars compared to China's 1 trillion dollars, or 40% of our number. Taking an 11 trillion dollar GDP for the U.S., assuming that we could just apply that 40% to match GDPs would give China a 4.4 trillion economy. (If only the world were that easy! ;-) )

[CasearianDaoist]

Agreed about the shield and the subs. DARPA actually has a very interesting research program called "TangoBravo" that has as goals submarines with half the size, half the cost, more than half the crew and all or the current and projected capabilities of the Virginia class subs ( the Virgina is a great sub, BTW.)

The DOD actually seems to be combining several approaches to ASW: New unmanned and manned sensor/weapon platforms, "persistent" surface and underwater sensors and even unmanned underwater "weapon pods" placed strategically around the world are all in the works. The point is that a meaningful ASW response is not exclusively about new submarines.I think that you would agree with me that these sorts of things need to be given greater priority, include new subs, of course.

I would point out that the new subs would be every similar to AIP diesels but would be nuclear. With all electric drives and distributed jet pulsors, these boats would have the same sort of signatures that the newer boats out there have but with much greater power and flexibility.

If current trends continue, war with China must surely come. perhaps even the existence of these systems, and the will to use them, will deter China.

[SunkenCiv]

"The point is that a meaningful ASW response is not exclusively about new submarines. I think that you would agree with me..."

Indeed I would. If the US goes ahead with supersonic torpedo development, what do you think its mission would be? Is there a need for it? The advantage (beats the detection signal back to the target) is substantial, but in what scenario would it make sense? Thanks.

[CasearianDaoist]

But you are excluding investments from your US total, as well as all input and outputs. I think that the Chinese numbers are really not right. Again, I think it is at most two trillion, and I include in that "hidden" and "black" economies that must surely exist over there. If we used the same metric in the USA we would be talking about an economy roughly the size of California.

Again, I am not try to downplay the threat of China. Rather, I am just call for a little sanity about the whole thing. One hears all of these figures bandied about yet when one takes a hard look at the data the picture is not so dark.

Of course China must unpeg, open its markets, implement rule of law and all the rest. My point is that those sort of issues are not niceties but rather structural necessities required further growth. Once they are implemented then many of the "advantages" of China evaporate.

I quite understand that if these reform do not happen then we are dealing with the classic problems of fascism, only here cast (for the time being) in economic terms. That is, however, a wholly different problem than the one I am addressing here.

This is the real riddle of China: Economically it is a bubble, but geopolitical it is an expansionist socialist/fascist power with that generates effects causes and conditions that transcend the narrow economic restrictions and categories that we have tended to use in these matter as we consider the developing world in relation to global economies. With the largest population on earth, the larger problems of China can not merely be left to market forces. There are deep repercussions.

[SunkenCiv]

US ambassador warns on China arms embargo
by Honor Mahony
March 18 2005

The US ambassador to the European Union has warned that the transatlantic dispute over the EU's proposed lifting of the China arms embargo could escalate into something "very very serious". In an interview with the EUobserver, Rockwell Schabel said, "We feel that it is the wrong thing to do and particularly now that this law has been passed", he said referring to a law passed by the National People's Congress of China authorising an invasion of Taiwan if the island seeks independence... "What you're going to get is the American Congress that is going to take a stand and say wait a minute, if the Europeans are selling arms in which we have potentially our technology, you're going to get companies that are not going to be able to sell their weapons to the Europeans anymore"... The ambassador also spoke out in favour of the European Constitution, which Brussels is hoping to see in place by late next year.

Nothing will cool Europeans to the idea of the EU Constitution faster than having the US gov't endorse it. ;') "Hey, why is the US in favor of it? Isn't this something that's supposed to be disadvantageous to them?"

[SunkenCiv]

Fischer warns of US-China confrontation
18.04.2005 - 09:57 CET | By Lisbeth Kirk
http://www.euobserver.com/?aid=18874&print=1
German foreign minister Joschka Fischer has warned of a possible confrontation between the US and China. The aspiring world power should be held in check by a "policy of containment", the minister said in an interview with Handelsblatt.

EU ministers expected to postpone the lifting of China arms embargo
15.04.2005 - 09:58 CET | By Lucia Kubosova
http://www.euobserver.com/?aid=18863&print=1

Under growing pressure from the US, the European Parliament and several member states, EU foreign ministers are expected to affirm the China arms embargo would not be lifted this year.