Posted on 09/10/2004 5:52:23 PM PDT by Flavius
It is bound to happen... maybe in 10, 20 years or even less. Economists and political scientists have been saying that China may be the next superpower, eclipsing America. This is China’s century, they say. The sleeping dragon has awakened! All 1.2 billion of China’s teeming masses are on their way to establish the world’s largest market economy and newest political superpower.
Listening to President Arroyo from the back of Dolce Fontana restaurant during last Tuesday’s MOPC Forum, I got the impression that our economist President got the idea too. And she is working to adjust our national perspective to take in the vision of China as the regional and world superpower that will eventually have more impact on our country than America.
Of course President Arroyo was careful to say that we have strong historic ties with America. But in responding to a question posed by a reporter from the Office of the Press Secretary, she also acknowledged the fact that our historic ties with China are even deeper... predating the arrival of the white man on our shores.
President Arroyo spoke glowingly of the over $1 billion in aid, concessional loans and contracts she brought home from Beijing. It was not lost on the audience in that packed hall last Tuesday, what was left unsaid in contrast: the meager $30 million in anti-terrorism assistance that was supposed to come from America have suffered all sorts of bureaucratic snags.
It was also not lost on the audience the policy contortions the Arroyo administration had to go through for military aid and trade concessions from America which often don’t materialize. To emphasize how important China is to her mind, President Arroyo said her state visit there last week is the only state visit she will make this year.
What really jolted me during that forum was President Arroyo’s announcement that we are on the verge of military cooperation with China. She is sending no less than newly installed Defense Secretary Nonong Cruz to China to work on the finer details of how this cooperation will work. "We recognize that China plays a determining influence in the security and economy of our region and therefore of our country," the President said.
Will the Chinese sell sophisticated firearms to help modernize the AFP? Will we be sharing sensitive intelligence information with China? Will we undertake joint patrols in the South China Sea to keep it free of pirates? The possibilities are mind boggling. The President’s subliminal message seems to be, America’s no longer the only game in town even for something as sensitive as military cooperation.
Not only will China now have a new market for its armaments, America’s hold on our military could be seriously challenged. Will the Chinese military send experts in guerilla warfare here to train our soldiers? And even as the Americans took away our cadet allocations at West Point and Annapolis to express disgust following the termination of the bases agreement, will this new cooperation with China mean top PMA cadets will be invited to train in China’s military academy?
The more important thing is, China’s being friendly not just to us but to all of ASEAN. When asked why she thought China’s being so generous to us, President Arroyo said China’s just being a good citizen of the world. Really? Maybe, we can give China the benefit of the doubt. But let us not forget China’s also acting in its best interest, which will not always coincide with ours.
At the rate China is undertaking this charm offensive, ASEAN could end up being a solid pro China bloc that would change the balance of power in our region. And all this is happening while America is distracted with Iraq, as the Bush administration placed Asia in the back burner. But I am afraid we will just replace America with China. The dependency relationship with a superpower remains.
The other more important aspect of that relationship we must develop to make the economic basis of our nationhood more viable, has to do with trade. I was disappointed that President Arroyo hardly touched on trade with China in her discourse on our emerging foreign policy shift.
I was hoping to hear her unveil a specific program designed to take advantage of China’s voracious appetite for commodities from bananas to vegetable oil. She herself noted that "ever since Beijing joined the World Trade Organization, Manila’s bilateral trade with China has gone from almost nothing to $10 billion, with the balance of trade in our favor."
I got word late Tuesday that the Philippines is finally part of the so-called early harvest program under the ASEAN plus China. That means, we will no longer have the 10-percent tariff disadvantage against Malaysia and Indonesia when we sell such commodities as coconut oil to China.
I remember a conversation I had with former Agriculture Secretary Cito Lorenzo about his plans to put up palm oil plantations in Mindanao that in as little as five years, would be able to supply palm oil for export to China. Right now, palm oil is one of the major exports of Malaysia to China and I was told China could absorb more.
If there is anyone who knows China and the commodities trade, it is Cito. His family-owned Lapanday (he divested before he took the agri job) is selling fruits like bananas and pineapple to China for close to 10 years now. Lapanday’s sale to China had gone from zero to half of total. And it will go higher as China’s appetite increases. Even rice is a potential export commodity to China, if we can untangle our rice growing problems.
As I proposed some months ago, the China market is important enough for the President to appoint a special envoy to China with a mandate to develop Philippine exports of commodities and manufactured goods. We need someone who will work not just for the industrial sector but for the agri sector as well. I think this is a job tailor made for Cito.
All I am saying is, the President is right to recognize the importance of China this early. With China’s exploding economy that seems unstoppable, we simply must find a way to hitch our kareton to the Chinese star and share some of the bounty from our powerful neighbor up north, through trade and not aid.
How the world has changed. Even as America still nominally holds the title of sole world superpower, China holds America by its financial balls... I mean bonds. If China stops buying American bonds or dumps what it holds, America’s kaput. By 2020 or even earlier, China may no longer be happy playing second fiddle. By that time, the sheer power of its market will make China the dominant superpower. The earlier we learn to live with it, the better for us. English English You would think the English know how to use English. This was forwarded by Norbert Goldie of Paranaque.
Spotted in a toilet of a London office: TOILET OUT OF ORDER. PLEASE USE FLOOR BELOW
In a Laundromat: AUTOMATIC WASHING MACHINES: PLEASE REMOVE ALL YOUR CLOTHES WHEN THE LIGHT GOES OUT
In an office: WOULD THE PERSON WHO TOOK THE STEP LADDER YESTERDAY, PLEASE BRING IT BACK OR FURTHER STEPS WILL BE TAKEN
In an office: AFTER TEA BREAK STAFF SHOULD EMPTY THE TEAPOT AND STAND UPSIDE DOWN ON THE DRAINING BOARD
Outside a secondhand shop: WE EXCHANGE ANYTHING – BICYCLES, WASHING MACHINES, ETC. WHY NOT BRING YOUR WIFE ALONG AND GET A WONDERFUL BARGAIN?
Seen during a conference: FOR ANYONE WHO HAS CHILDREN AND DOESN’T KNOW IT, THERE IS A DAY CARE ON THE 1ST FLOOR
Notice in a field: THE FARMER ALLOWS WALKERS TO CROSS THE FIELD FOR FREE, BUT THE BULL CHARGES
Message on a leaflet: IF YOU CANNOT READ, THIS LEAFLET WILL TELL YOU HOW TO GET LESSONS
Boo Chanco’s e-mail address is philstar_chanco@yahoo.com
I am pretty sure that most Chinese speak better English than he speaks Chinese. Or French. Or German.
Or English, if it comes to that.
maybe this is what the ment
It makes you wonder if U.S. citizens understand the extent to which Asians subsidize their way of life. Japan and China are the two biggest holders of U.S. debt, owning a combined $832 billion. Add in Hong Kong, Singapore, South Korea, Taiwan and Thailand and the figure grows to $1.04 trillion out of $1.75 trillion of Treasuries held overseas
Bloomberg Columnists
William Pesek Jr. William Pesek Jr. is a columnist for Bloomberg News. The opinions expressed are his own.
China Role Likely in U.S. Election: William Pesek Jr. (Correct)
China Role Likely in U.S. Election: William Pesek Jr. (Correct)
(Corrects typographical error in 12th paragraph. Commentary. William Pesek Jr. is a Bloomberg News columnist. The opinions expressed are his own.)
By William Pesek Jr.
July 30 (Bloomberg) -- Bill Clinton tried to jam lots into his speech at this week's Democratic National Convention. And yet, somehow, the former U.S. president found time to mention China's purchases of U.S. Treasuries.
Clinton did so while criticizing the Bush administration for turning a ``projected $5.8 trillion surplus into a projected debt of almost $5 trillion,'' a record.
``They are borrowing the rest from foreign governments, mostly Japan and China,'' Clinton said in Boston. He added that ``if you think it's good policy to pay for my tax cut with the Social Security checks of working men and women, and borrowed money from China, vote for them. If not, John Kerry's your man.''
It makes you wonder if U.S. citizens understand the extent to which Asians subsidize their way of life. Japan and China are the two biggest holders of U.S. debt, owning a combined $832 billion. Add in Hong Kong, Singapore, South Korea, Taiwan and Thailand and the figure grows to $1.04 trillion out of $1.75 trillion of Treasuries held overseas.
Clinton's China reference is a harbinger of things to come. As U.S. Democratic nominee Kerry steps up efforts to unseat President George W. Bush, it's likely China in particular will play a central role. Already, Kerry raised eyebrows accusing China of ``predatory currency manipulation.''
China's Holdings
Will China's vast U.S. debt holdings become an issue, too?
They will if U.S. Congressman John Tanner, a Tennessee Democrat, gets his way. ``There has never been a nation that was strong, free and bankrupt,'' Tanner said at the convention. He's one of the so-called Blue Dogs, a group of moderate-conservative Democrats urging fiscal discipline.
There's more than a bit of hyperbole here. Yet Tanner isn't alone in worrying that growing holdings of U.S. Treasuries by foreign nations like China are a threat to national economic security. At a time when Kerry's campaign is calling for an end to U.S. dependence on Middle Eastern oil, it may also turn its attention to the unhealthy reliance of the U.S. on Asia's money.
Concerns that foreign-debt ownership is a vulnerability may be overdone, but they could get considerable attention between now and November, when U.S. voters cast ballots. It will hardly be good news for U.S.-China relations, or investors for that matter, trying to discern the broader implications of all this.
At the center of the issue is China's currency policy. If there's any economic policy on which Kerry and Bush agree, it's the desire for a stronger Chinese currency. Both Democrats and Republicans think China's 8.3 peg to the U.S. dollar gives Asia's second-biggest economy an unfair advantage.
A Loser Yet the ``blame China'' strategy is a loser, at least where currencies are concerned. There's plenty to criticize China about, including its human rights record and aversion to free speech. If Kerry and Bush want to go after China's economic policies, its record on intellectual property rights offers lots of ammunition. So does the lack of transparency in his financial sector.
China would unleash its currency if it could. Doing so would instantly raise Chinese wealth, get Washington off its back and, most importantly, help cool an overheating economy. China is desperate to avoid a crash, and a 30 percent or 40 percent rise in the yuan could be just the trick. It also would reduce the cost of imported oil and other commodities.
Officials in Beijing are avoiding the step because they know the underlying financial system isn't ready for it.
The Peg Shield Still, both Kerry and Bush will be under increasing pressure from manufacturers to bully China into floating its pegged currency. Trouble is, freeing the yuan would mean a major loss of control, and China's economy is all about control. A pegged yuan shields China from the full wrath of global markets. China's biggest banks aren't really banks, but arms of the government that pump liquidity into state-run enterprises and development projects. The result is untold numbers of bad loans.
As China slows its economy, curtailing investment and consumption, things may only get worse. Officially, bad debts make up 20 percent of loans outstanding at China's four biggest state-owned banks. Many private-sector analysts believe the figure to be much higher. Standard & Poor's recently called China's banking system the world's most vulnerable and predicted it would cost $650 billion to bail it out.
If the yuan is floating freely and investors begin speculating that banks are even worse off -- plausible given the lack of transparency -- that's the ballgame for China, and officials in Beijing know it.
Still, as Clinton's reference to China subsidizing the U.S. suggests, the world's No. 7 economy won't get off the hook this election season. Its dollar peg still unnerves U.S. manufacturers. And now, its vast dollar holdings -- it needs to buy U.S. Treasuries to hold the currency steady -- are attracting attention.
Investors caught in the middle could be in for an interesting few months.
To contact the writer of this column: William Pesek Jr. in Tokyo at wpesek@bloomberg.net
"1. They don't have a truly free market economy - still essentially socialist. 2. They have no political liberties"
There is no truly free market economy, just degrees of freedom. the real test is "does the system produce wealth, and china is clearly generating wealth. The second point, no political liberties, seems to be a comforting mantra on both the left and the right. A measure of personal freedom is important as societes start to get rich, but they need not be fully developed democracies such as we have in the modern west (anyway, such "liberties" are often derided as liscense anyway).Eighteenth century Britain and 19th century America or Germany were hardly democratic by any standards we would use today...but their economic growth was explosive. Sorry, what seems to really matter is an authoritarian system which respects propery rights, a LIMITED francise, a legal system that protects propery and allows property rights to evolve. It also helps to have some kind of savings/work ethic for the masses, and limited liability corporations for the elites. More or less China seems to be getting there.
Reality check--America is not truly capitalist in its economy either.
Of our $2 trillion dollar budget, roughly 67 cents of every dollar is spent on social welfare.
50% of the voters are Democrats. Democrats are anti-business. Check out Al Gore's transcripts from the 2000 debates. Kerry will say the same thing. "Big pharmaceuticals, big oil, big tobacco. etc.". They hate the free enterprise system. Our tort laws are anti-business. Malpractice premiums are driving doctors out of business.
Half the people pay no taxes. How in gawd's name can anyone say America has a "capitalist society" when we are socialist in our spending?
The truth is hard for many to swallow, but the fact is we no longer have a free-enterprise economy. Regulations and excessive taxes and more people on the dole than paying taxes clearly points out that we are moving fast into a socialist form of government. The way the Fed intervenes, to imply we have a free enterprise system is a sick joke.
BTTT
Then maybe all our rat politicians and businessmen who sold us out can go and live with their Chinese masters.
Sold us out? Don't blame the businessmen and the politicians. Blame the voters and the Joe Six-Packs who voted in (or retained) socialists and who let their moms and dads and neighbors vote for these socialists.
Look around. It is the scum all around you who allowed these socialists to destroy our nation. Don't blame the politicians. Blame the voters.
In all fairness the voters have been swaying twords socialism for a few generations. It is just increasing quickly as the two party cartel has gathered power unto itself.
I see. Don't blame the guys who took the money, the bribes, the gifts to sign one way trade agreements? Don't blame the guys who sold the technology and secrets to our competitors? Blame the people who were lied to instead. Right. We worship the decaying bones of Free Trade when there is no Free Trade. We are the victims of disadvantageous tariffs, unfair taxes, unrestricted, government sponsered, illegal immigration and you want to blame Joe six-pack. When do the perpetrators of this scam get to take any responsibility for being traitors to the land that nurtured them? Hang them from the highest tree.
In case you forgot, it is the people who give these idiots power, and it is the mass of ignorant morons (voters) who continue time and time and time again to vote back in these anti-Americans.
The late great Linda Bowles had this to say after Clinton's last day in the White House:
"Once Clinton has shown the way to move forward with his life, it would be appropriate for those Americans who twice put him in office to clear their consciences by also making a public apology to the rest of us. This need not be a groveling apology. Just a simple expression of remorse and a straightforward request for forgiveness will be sufficient."
Like Linda Bowles said about the voters who put Clinton into the White House (twice), the same goes here in our discussion.
For some reason, you want to avoid placing the blame squarely where it belongs--on the voters.
The voters have been cheated before. You dont have to wear a tinfoil hat to believe that votes are manipulated.
If it was not for the MSM slick willie would not have spent 8 years defiling the white house. I will don my tinfoil hat in saying Perot had enough to play games with the highest office in the land. He also might have stood a chance of winning but he bowed out and flamed out in the last two weeks. The media had a large hand in that.
I dont think the voters are given a chance to vote on good men very often. Most of the time it is a choice between the lesser of two evils. Good men avoid politics because they know that chances are their good names will be slandered and their families will be dragged through the mud.
The voters may have to shoulder some of the blame but the politicians, bankers, lawyers, unions, and corporations are pulling the strings. The two party system will not let go of the power. Men were suppose to "serve" their country for a few years then go back to their homes and improve their states and cities. They are not suppose to be life long politicians with pensions and healthcare better then the people they serve.
The politicians have changed the laws and the constitution to serve their own greedy needs. States have lost their rights in the name of a strong federal gov.org. The media controls the people but with the internet there is some hope. So watch the fedgov.org shut it down or censor it before the people learn what our founding fathers gave us.
The people have been dumbed down by a fedgov that has installed public schools that indoctrinate the citizens into believing that whatever they say is right and they control the media. Their are talking heads, no such thing as investigative reporters who are impartial and just report the facts.
I believe it is part of a plan that has been going on for generations and to lay the blame on the voters is wrong. Look at how many times the people have voted on a law and judicial activists in their black robes and their blacker souls have overturned the will of the people. Thats all you need to know to realize that your votes do not make much difference. Democrats have become socialist's and republicans have become yesterday's democrats. They are both destroying this once great nation and the voters will never be given a chance to change that unless we start voting with lead.
Ok, I can see placing SOME of the blame on the voters. My question is, how do the regular, joe six-pack guys tell when one of these clowns is lying? The blame also lies with the disreputable bastards that lie and conceal and classify top secret to avoid detection. I'm not usually defined as emotional, I'm a typical, tight-as*ed, white boy but one thing I hate is a lying traitor. I guess one solution is requiring an IQ test for voting and I'm serious.
The voter are at a dis-advantage in that they are assailed by a huge media propaganda machine that bombards them with information. Joe Six-Pack ain't got a chance. Personally I assume they're ALL lying until proven otherwise.
Or, maybe we will kick their asses.
And your "implied" alternative is to flush our economy down the toilet by "building the moat." What then, will you re-appear to say "I told you so?"
We must put the blame squarely on the shoulders of American voters who vote these scumbags into office. It may not be you or I, but America in general is an ignorant society.
The scum who "lie and conceal and classify top secret", (like Clinton) as you say, are ready and willing to do this before they are elected (or reelected)--it is up to the voters to keep them out of office.
The Democratic Party is the party of scum. Any relative, friend, or associate of yours who claims they are a Democrat should be beat senseless by you until they come to see the light.
My question is, how do the regular, joe six-pack guys tell when one of these clowns is lying?
It is up to us to keep ourselves educated--then we know when they are lying. Research the Internet. Watch FOX News. Read FR. There are ways.
You must put blame where blame is due, and that blame is on the American voter. Why America is an ignorant society is an entire thread unto itself and no need to get into that here. Blame the voters, not the politicians.
He (Arnold) was right about Germany and Japan, but keep in mind that America has over three times the population of Germany and over two times the population Japan.
US 295 million
Japan 125 million
Germany 80 million
During the 1980's, Japan's per capita GDP actually eclipsed that of the US. Japan never outproduced America in areas of auto and steel, but on a per capita basis they did.
And Germany and Japan never surpassed America in trade volume, but on a per capita basis, they did. And Germany today still does more trade than the US on a per capita basis.
In China's case (with a population over four times that of America), China only needs to achieve a per capita 1/4 of that of the US to eclipse America.
I don't know what percentage of the Chinese economy is state owned, but you are right in implying that a high percentage of the economy is state owned.
But I think alot of people do realize that. In actuality, I think what alot of people fail to realize, is that the Chinese are trying desparately to change that. To try and privatize their economy as much as possible.
You have a colorful way of displaying how you really feel about China.
But the reality is, as long as China stays at peace with the US and never has to face those 7 carriers, the Chinese will develop a superpower economy, while the US uses her resource to police the world (i.e., the war on terror).
This is what happened between the US and Britain in the late 19th and early 20th century. Britain was the world's policeman, while the US evolved into the world's economic engine.
"Let's see... Wealth, innovation, and power are byproducts of individual liberty, limited government, and low taxation."
You are right in what you said, however, China is in fact retrenching in government and granting more individual liberty. Indiviaul liberty in China isn't to the degree of what we enjoy here in the US, but it's a far cry from the height of the Maoist era of the 1950's. And people in China today don't wear the uniform green jackets, pants and caps. They wear colorful modern Western clothing and are allowed to leave their country if they want. There is no more bamboo curtain and liberties continue to get better.
In the meantime, the Chinese are busy adapting and implementing existing technologies. Their economy is growing because they don't have to reinvent the wheel. Countries like Japan, Taiwan and South Korea have to innovate to keep their economic engines going. China can move forward by adopting current technologies. They will eventually reach a day when they will be forced to innovate, but for now, they have alot of catching up to do, which is what they are doing now.
Good advice for Arroyo, tell her people to start learning Chinese.
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