Top Ten Chinese Military Modernization Developments

$11 trillion this year.
$22 trillion 20 years from now.
$15 trillion as an average, times 20 years.
equals $300 trillion.
To feed, cloth, house, and generally supply 300 million people.
All surplus available for investment, research, acquistion of new means.

$1.5 trillion this year.
$6 trillion 20 years from now.
$3 trillion as an average, times 20 years.
equals $60 trillion.
To feed, cloth, house, and generally supply 1200 million people.
Any surplus available for investment, research, acquitions of new means.

Five times the raw wealth. A quarter the population to supply. They aren't going to even get close to matching what we can discover, invent, design, test, build, and deploy.

Every reason to pay attention to what they do. Japan has only a fifteenth of our GNP when they went batty and suicidal and attacked us. When they got battlecruisers and aircraft carriers, the war department was right to pay attention. But they didn't get close to our industry, and when they went for it we annihilated them. China is not much different, at present and a generation into the future. That is why I said worrying about their economy catching us is smoking crack - but there is every reason to pay attention to their military modernization efforts. They aren't in our weight class and they aren't going to be in our weight class, for decades. But idiots sometimes start things anyway.

I agree with everything in your last paragraph, which is what ultimately animates my concern- Subject to the stipulation that in those halcyon days of From Here To Eternity no one had the bomb, lasers, or any conception of star wars, any one of which which would have given us an entirely different and graver shock at Pearl Harbor from which our industrial base could not have saved us.

Which brings us to your second paragraph, can you absolutely guarantee that china will not invent and deploy some weapons system, possibly space based, which changes the entire equation? You are right, for some time to come we will out invent them, but will we enjoy a monopoly? The NY Times article describes the extraordinary strides they are making in R and D. I am old enough to remember how shocked we were that a backward Soviet Union could first surprise us with the atomic bomb and then with Sputnik. We had guarantees then too but our strategic advantage, far clearer than we now enjoy over China, was neutralized twice in one decade and we were utterly blindsided.

As to your first paragraph, I simply repeat my admonition not to assume straight line projections. I have cited in my quotes of the Times article, to be intellectually honest, some of the factors that could bring down the Chinese economy. But I think we both must admit that there are forces which could bring our own down, the Chinese extraordinary growth in manufacturing itself being one of them, which could distort our straight line projections.

I really do not think, having read your last paragraph, that we are out of sync. I would add that we must consider the geo political muscle of a nation which will probably be the world's foremost trader soon enough. At that point, assuming some straight line projections, they will be the world's second economy. They have a government which defies definition and is therefore highly unpredictable and could launch a star wars Pearl Harbor if some nerve we do not understand is touched. Meanwhile, we can count on them building alliances against us to suck up much of the world's natural resources and shape markets which in turn will affect our strategic position. I ask you only to consider their moves on oil and the mischief they can make with Venezuela. I just had a builder here in Germany tell me that the price of plywood has gone up 30% because of the demand in China.

These are real concerns for Presidents and economists beyond the war gaming which engages the Pentagon.

"a backward Soviet Union"

Um, not all that backward. Remotely. Part of urban European civilization for centuries. But still -

"surprise us with the atomic bomb"

They stole it, with treason help.

"was neutralized twice in one decade"

Hardly. SAC could have turned the USSR into a smoking irradiated ruin inside of 2 hours at any time in the first half of the cold war, with minimal loss to ourselves in retaliation. But (1) even that cost wouldn't have been worth it (2) we don't do such things (3) we won anyway and (4) we did not fully understand at the time just how far ahead of them we were.

As for projections, I'm being quite generous in the above estimates, and 20 years is not a long time in economic terms. Also, I wonder if you've thought much about the absolute figures I gave. For the next generation, even counting things being much better at the end of the period than at the begining, the average person in China is going to live on $200 a month. Try it, and see how much you have left for big ticket acquisitions. There is a reason US defense spending dwarfs China's.

The next big thing in weaponry, whatever it is, will be made in the labs of US government agencies, major universities, or commercial contractors. Yes I can bank on it. On track record, on first principles, on all the science I know is in the pipeline already. Civilizations aren't made out of spins of a roulette wheel, they are vastly broader and deeper things than that.

What is mostly going to happen in China over the next generation, is a lot of people are going to work very hard and lift themselves out of grinding poverty to something approaching a comfortable middle class existence, provided they continue to work very hard and their leaders don't do anything reckless. Their leaders, having a deep case of the evil stupids and delusions of grandeur, may very well do any number of reckless things.

Business
China growth to exceed forecasts

Sunday, March 20, 2005 Posted: 11:58 PM EST (0458 GMT)

BEIJING, China (Reuters) -- China's economy will grow at an average annual rate of 8 percent from 2006 to 2010, according to a top think-tank whose forecast exceeds a well established official view that long-term growth would average 7 percent.

The new forecast from the cabinet's Development Research Centre (DRC), reported by state media on Monday, follows the government's decision not to repeat for 2005 the 7 percent growth forecast which it had routinely issued for previous years and which the economy had routinely exceeded.

Instead it is forecasting 8 percent growth for 2005, and the think-tank extended that outlook until 2010.

"China's economy will maintain average annual growth of 8 percent during the Eleventh Five Year plan period (2006-2010), boosting per capita GDP to $1,700," the China Securities Journal quoted a report by the think-tank as saying.

"Rapid capital formation will still be the key driving force for economic growth during the Five Year plan period and growth between 2010 and 2020," the think-tank was quoted as saying.

"That means China will achieve its goal of quadrupling its gross domestic product from 2000 to 2020 ahead of schedule," the China Daily quoted the centre's vice director Sun Xiaoyu as saying.

The China Daily also quoted Han Wenxiu, a senior official at the National Development and Reform Commission, as saying accelerating urbanisation and higher consumption in houses, cars and home appliances, would help underpin long-term growth.

But Zhang Xiaoji, an economist at DRC, was quoted by the newspaper as saying that China would face obstacles in sustaining its rapid growth due to energy and environment strains.

"The nation's resources and the environment are coming under greater pressure as China strives to maintain sustainable development," Zhang was quoted as saying.

"The environment will pay the price unless the country shifts from the current resource-intensive model of economic growth."

The government has been trying to narrow a rich-poor gap by spending more in rural areas and curb fixed-asset investment while promoting consumption to better balance economic growth.

Yiping Huang, economist at Citigroup in Hong Kong, agreed that China's economy would be able to maintain around 8 percent growth until 2010, but he saw it slowing slightly afterwards.

And the economy faced challenges, Huang said.

"China is very likely to maintain that strong growth, but there are issues it has to deal with," he said "I think the most important problem in the near term is over-investment."

"The longer-term problems China will have to deal with are this big question of capital efficiency, which is related to the over-investment problem but also related to the efficiency of the banking sector and the stock market," he said.

The goal of quadrupling GDP between 2000 and 2020 assumed annual average growth around 7 percent, and the government has been targeting that rate for the Tenth Five Year plan, covering 2001 to 2005.

But official data suggest that the actual growth rate for 2001 to 2005 will exceed 8 percent.

The economy was 9.5 percent larger last year than in 2003, despite government steps to hold down growth, including the country's first interest rate rise in nine years in October.

http://www.cnn.com/2005/BUSINESS/03/20/chinagrowth.rt/

Yawn. Shading around the edges by single percentage points. We know the scale. They will grow faster than us over the next 20 from a much lower base, and still be poorer in 20 years than we are now, not just per capital but gross output. In the meantime, we will double again, from a higher base. By no stretch of the imagination will a country living on $150 per person per month compete with us in capital spending or the things it accomplishes. None of which is any reason not to pay attention when the buy dangerous weapons from the Russians or rattle sabers over Taiwan etc. But peddling the idea that they are going to be richer than us, or even in the same league for generations, is a lost cause.

I think we have beaten this to death and I will concede your point that my remark that we will "soon be eclipsed" is an overstatement but I stand by my larger observations that the burgeoning Chinese economy is likely to serve us some unpleasant geo-political as well as military surprises.

I have a five year old daughter and I do not think it unreasonable to hope that she could easily live another hundred years. You speak of "our lifetimes" and I say my time horizon has considerably extended when I consider my daughter's future. The Chinese regard a century as little more than a blink of an eye. They are patient but exceedingly sedulous in the furtherance of their ambitions.

We are not really at odds here and to the extent we are, I hope you are proven right.

Err,Pakistan & North Korea are nuclear powers BECAUSE of China & the very existence of nukes in those countries serves Beijing's interests.It keeps the US,Japan & India on their toes & the best part is that the PRC doesn't have a waste a penny for that.Do you honestly think that a tinpot like Kim Jong Il survives by his own machinations???IF it weren't for Beijing,he & his regime would have been in the dumps a decade ago.Pakistan will be getting only 24 F-16s as of now(that may rise to 70) & they will also be getting 150 Chinese built FC-1 fighters(would China sell those many fighters to a potential threat???).Mind you ,the PRC itself won't induct the FC-1,it was built specifically for the Pakis.& as a further sign of Pakistan & China drifting "apart",the 2 nations will inaugurate their jointly built deepwater port on Pakistan border region with Iran in over a week's time.It will give the PRC a toehold against the USN & IN.Pakistan has given China much cooperation in it's fight against Slammics in Xingjiang,so you don't hear the kind of reports from there that you hear from Iraq,Chechnya or elsewhere.IF you ask me,China's neighbourhood may look messy,but with proxies like PAkistan,North Korea & Myanmmar,it sure has worked as hell for them.

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