Posted on 03/02/2007 6:25:08 AM PST by pissant
WASHINGTON – Republican presidential candidate Duncan Hunter's insistent warnings about China's threatening military buildup have stamped him as the Paul Revere of the fast-developing 2008 campaign.
China is picking America's pocket and using its ill-gotten gains to acquire ships, planes and missiles in a challenge to U.S. national interests, Hunter says. By cheating at trade, the 14-term congressman adds, China has also been able to pirate many American industries and high-paying manufacturing jobs.
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But some experts say that the Alpine, Calif., Republican's relentless focus on Beijing's trade tactics is overwrought and ignores important economic benefits to the United States, including hundreds of billions of dollars worth of Chinese investments that help the United States finance its deficit. Campaigning for the Republican presidential nomination over the past three months, Hunter has espoused a view on China that is far more confrontational and alarmist than the one taken by the Bush administration.
For example, Hunter has accused China of illegal currency manipulation that, he says, is seriously damaging the U.S. economy. Federal Reserve Chairman Ben Bernanke, a Bush appointee, is guilty of “appeasement” for failing to challenge China's currency policy, Hunter says. Nicholas Lardy, an expert on the Chinese economy at the Peter G. Peterson Institute for International Economics, is one of several economists who say that Hunter has it backward.
In fact, Lardy and others argue, China's success last year at banking a surplus of over $230 billion in its two-way trade in goods with the United States has enabled the Chinese to bankroll the U.S. Treasury to the tune of hundreds of billions of dollars to finance the budget deficit. As a side effect, China's loans have kept both U.S. taxes and interest rates lower than they might otherwise have been, some economists argue.
“We are financing a government deficit and a savings shortfall by borrowing from abroad, including to a significant degree from the Chinese,” said Lardy. “So it is probably more accurate to say that China's trade surplus is financing our military expenditures than it is their military expenditures.”
Barry Bosworth of the Brookings Institution also disputes Hunter's assertion that China is financing its own military buildup out of its trade surplus.
“They are accumulating foreign currencies which they hold in dollars. But they don't spend the surplus,” Bosworth argued. “If they used it to finance their defense buildup, they would have spent it. Then they wouldn't have a trade surplus any more.” Lardy cites statistics indicating that China only spends about $2 billion a year on military imports, mainly from Russia. Some military experts are dubious about Hunter's alarm over the nature of the emerging Chinese military threat. They argue Beijing's strategy, at least for the time being, is aimed at raising the stakes for the United States in any future decision to intervene in an armed conflict over Taiwan, the breakaway island state that China is intent on recovering.
“Whether or not this would be a broader threat on the shape of where it could turn into a new cold war, man, we are nowhere near that yet,” said Robert Work, vice president for strategic studies at the Center for Strategic and Budgetary Assessments. Hunter's fans, including many with impressive economic credentials, counter that China is not simply being a good neighbor when it recycles its trade surplus by purchasing U.S. government debt. Instead, they say, it is part of a strategy of devaluing its own currency to make American products more expensive in global markets compared with Chinese goods.
Part of this strategy involves maintaining a fixed exchange rate – or “peg” – between the Chinese renminbi and the U.S. dollar. “They can't maintain a fixed peg – unless they recycle dollars back into the U.S. That's why they do that,” said Peter Navarro, a business professor at University of California Irvine and author of “The Coming China Wars.”
“They do fund our budget deficit – by doing so, they are helping essentially to increase our military budget – (But) I think an armed and dangerous Chinese military capable of projecting power throughout the world is far more dangerous than the U.S. military in terms of destabilization.” Navarro argues that the real significance of China's unfair trade policies lies in their success in fueling the country's overall economic growth, which provides the wherewithal to finance a significant increase in military spending.
Some studies say that China over the last decade has boosted its defense budget from 1 percent of its gross domestic product to 1.5 percent. The comparable figure for the United States is 4 percent. “The economic weapon – is translating into a military weapon because the faster China grows economically, the more resources it has to devote to the military budget,” Navarro said. “The key point is that it is devoting a disproportionate share of its new growth to fueling its military expansion.”
Dan Ikenson, associate director of the Center for Trade Policy Studies, at the libertarian CATO Institute, argued that Hunter's attacks on China overlook that nation's advances in becoming a member of the global trading system. Ikenson added that its recent entry into the World Trade Organization offers a forum for reconciling complaints about its objectionable trading practices. Arguing that the United States has benefited along with China from the trading relationship, Ikenson said, “We need to keep our eye on them, and like Ronald Reagan said, 'Trust but verify.' I think that is what we need to do with China and not treat them like an enemy – just keep an eye on what they're doing and prosper along with them.”
We cannot dismiss the chicoms recent charm offensives into Venezuela and Iran. They are our enemy.
China should be watched because it will be our future enemy in a war at the rate things are going.
There are too many people making money in China and ignoring their government's clamp down on freedom for other people.
Money isn't everything and China should be held to account for how it treats its own people and its increasing military threat to neighboring countries.
What exactly do you disagree with him on here?
bump
That's allright. Stick your head in the sand as they make Venezuela and Iran nuclear powers, like they did for Pakistan.
Sheesh, were does he expect us to get our $800.00 Fender Guitar ($400.00 for a MIM 'Standard' Fender) knockoffs for $110.00 at? Or the Gibson-Epiphone Les Pauls? And every other Name Brand musical instrument, huh Duncan!
Sheesh, think of the children. Now instead of being able to afford music lessons they'll join gangs, sell drugs and wind up in prison!
~~~ sarcasm OFF ~~~
In the interest of Full Disclosure, I DO own a couple Made In China guitars - they ain't all that bad. For beginners and intermediate players, they're perfect (but I'm selling them to buy another REAL Fender).
Then Lindsey went on the say, they were able to do that as a direct result of Loral and Bill Clinton. He went on the recite the scenario we all talked about when with the stroke of the pen, Clinton allowed Loral to share tecnology with China, then gave Bill $1,000,000 in campaign donations in 1996. He then told us that the State Department responsibilities of keeping technology out of the hands of our enemies, was trasferred to Commerce.
Think about it the Chinese, now have the ability to shoot down our satellites one by one, and once down, we cannot do anything, even the ICBM's on our Trident subs are satellite aimed.
I'm not a "Chicom apologist", but I don't see any reason to believe that China has any territorial ambitions on America.
Historically China has had lots of border wars, and has an obsession with "reclaiming" it's territories such as Tibet and Taiwan. And certainly it wants to have more influence in its region of the world (e.g., trade, finance).
But I think Hunter's concerns are overwrought.
Fortunately not all of us are so blinded by greed that we'll happily screw our own country for a buck earned off slave labor of people who sought democracy in China.
Generally they tend to be the same people who want as many illegal aliens in this country as possible.
Fine patriots all. [/sarc]
It amazes me how the Free Traders will insist on ignoring the threat of China's military buildup simply because "It's good for the economy"
If ONE American military man or woman dies from any kind of chinese ordinance, I want to see these businessmen who sold our country down the drain, HUNG!
Dear Antoninus,
"What does this mean? It means, that when people actually have to get down to voting, even a relative unknown like Hunter is coming close to taking out liberal Rudy."
I think that even more, it means that as folks move beyond mere name recognition, and start to actually figure out who supports what, Mr. Giuliani's numbers go down - because he's a liberal - and Mr. Hunter's numbers go up - because he's a conservative.
sitetest
“They are accumulating foreign currencies which they hold in dollars. But they don't spend the surplus,” Bosworth argued. “If they used it to finance their defense buildup, they would have spent it. Then they wouldn't have a trade surplus any more.” Lardy cites statistics indicating that China only spends about $2 billion a year on military imports, mainly from Russia. Some military experts are dubious about Hunter's alarm over the nature of the emerging Chinese military threat."
Maybe someone should inform these deep think tank people about a few realities, like the fact China is EXPORTING military hardware to countries like Iran,Syria,African counties amd most likely North Korea so they probably aren't spending too much IMPORTING the stuff !!!
Dear angkor,
"But I think Hunter's concerns are overwrought."
I disagree.
China wishes to be what the United States is: the global hegemon.
They don't want to install a Chinese puppet government in Washington, or London, or Moscow. They'll be happy if the governments in all three cities, and every other capital in the world, must accommodate China's political, economic, and cultural ambitions. They'll be happy if the current "unipolar" world dominated by the United States becomes a "unipolar" world dominated by China.
They view world hegemony as their destiny.
We should view it with alarm.
sitetest
While sitting here at the p/c for two weeks now, watching the debates between those here at FR between Hunter and, Giuliani have decided to go with Hunter.
After last night straw poll in South Carolina, I believe Hunter will in the coming months move to the front in greater numbers.
He is not a Regan but, he is closer than Giuliani or McCain.
It seems that China was selling military style communications equipment to Iraq in violation of sanctions.
"I'm selling them to buy another REAL Fender"
Would that be the Mexican version?
I had a Mexican Strat, $375 new and it sounded pretty darned decent.
OK, I know El Stratocasteria is not the true Strat.
Excellent addition to the thread. And there are hundreds of disconcerting stories along a similar vein.
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