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China's Economic Challenge to the U.S.
The rise of China as an economic superpower has occurred against the backdrop of increased globalization and the explosive growth of the developing world and the other BRICS nations (Brazil, Russia, India, and S. Africa). China's growing prominence in the global financial community manifested itself in 2010 as "Japan ceded its spot as the world's second biggest economy to China. Japan's nominal GDP for 2010 was 479.223 trillion yen, or $5.474 trillion; falling below the $5.879 trillion figure for China in the same year" (Monahan 2011, 1). China and Japan with their respective five trillion economies are still dwarfed by the American economy which boasts a nearly 15 trillion dollar GDP (CIA FactBook N.D.,1 ); however China will continue its growth ascendance, and in terms of GDP all but guarantee that China will surpass the U.S. In the next 30 years, and probably far sooner" (Scissors 2011,1). There is no question that China is correctly characterized by Fred Bergsten as an economic superpower, as they are "sufficiently large, dynamic, and globally integrated" (Bergsten 2008, 1) however, their economic might has not driven an acceptance of the "systemic responsibilities that should ideally accompany superpower status" (Bergsten 2008, 1). Given that China and the U.S. will be engaged in a competitive economic challenge over the coming decades,...
should engage China to become an integrated member of the financial community is worthy of explication.
Bergsten fundamental posit and tenant is that China's reluctance to join with the U.S., the E.U, and Japan as "a responsible stakeholder" (Bergsten 2008, 5) in the global economy is not about a cohesive and organized strategy designed "as a revisionist challenge to the status quo, and a supplant of the so called Washington consensus" (Bergsten 2008, 1), but rather is designed to have the U.S., EU, and Japan acknowledge China "as a true partner in steering global economic affairs" (Bergsten 2008, 5). This point however, ignores the realities of a decade long U.S. spending binge, accelerated in the last three years, which has strengthened China's position and fortified their belief that they will soon "set the rules" (Bergsten 2008, 4) of the economic game. Bergsten though does not dismiss China's desultory actions in the areas of: trade and currencies, as "the usual free-riding and skirting of responsibility by a powerful newcomer…to pursue its perceived national interests" (Bergsten 2008, 1); instead he argues that these actions have profound consequences on the global economy, and further push China away from its ostensible goal as a "true leadership partner" (Bergsten 2008, 5).
What precisely are China's activities on trade, currency,…
What precisely are China's activities on trade, currency, energy, and environment which portent economic uncertainty? The trade and currency issues are the most critical pieces of the China / U.S. engagement and are obverses of the same coin. Despite China running its first trade deficit in seven years "$1.02 billion in the first three months of the year compared with a surplus of $13.9 billion a year earlier" (Bloomberg 2011, 1) the stark reality is that they are the world's largest exporter of goods (Thompson 2010, 1), and China's trade surplus particularly with the U.S. has been growing for years. In 2010 "the gap between U.S. imports from China and what it sold to the country rose to $273.1 billion" (Wearden 2011, 1). This trade surplus with the U.S. And China's large current account surplus is in the opinion of many global policy makers due to the undervalued Yuan.
The Chinese strategy of undervaluing the Yuan in relation to the dollar to boost exports has certainly paid dividends as evidenced from the above data however; this is not the entire story because "since July 2005, when China decided to break away from fixed exchange rate with the dollar, the Yuan has been appreciated by 26%" (Asia News.it 2011, 1). So while according to U.S. officials "the Yuan is artificially undervalued by at least 30%, to the benefit of Chinese exports" (Asia News.it 2011, 1) the evidence of Yuan appreciation is indicative that the U.S. consumer's insatiable appetite for low cost imports is also a prominent reason for the trade deficit. China's point on the value of their currency is that it is "an issue of national sovereignty" (Bergsten 2008, 3) requiring no global IMF agreement to float the Yuan's value.
Bergsten in the discussion of trade and currencies points to China's recalcitrant attitude toward accepting Doha trade agreements designed to liberalize international trade and lower tariffs; "declaring that it should have no liberalization obligations whatsoever" (Bergsten 2008, 2 ) because of their status as a developing country. Even now the Doha talks, some ten years in process, are in danger of falling apart "amid a rift between developed and developing nations on tariff cuts on industrial goods and farm subsidies" (Times Live, 2011, 1). China's policy instead has been to forge regional trade alliances such as the Association of Southeast Asian Nations, and the eventual creation of an Asian trading block (Bergsten 2008, 2). Invariably, the creation of a global free trade compact as envisioned by the Doha would benefit the Chinese economy, as additional markets are opened for exports and the Chinese consumer benefits from cheaper import flows. That
Interoffice Memorandum [Recipient Name] MEETING THE CHINA CHALLENGE: Discussing the possibility of China and the United States escaping Thucydides' Trap. Relevant National Interests. Vital. Prevent China and the U.S. going to war; ensure a continual alliance between China and U.S. governments. Extremely Important. Protect U.S. citizens, embassies, personnel and other significant U.S. infrastructure within areas facing potential attack, including cyber-attacks; limit access to sensitive data and restrict the flow of information from the U.S.
The U.S. economy is currently downshifting. Real GDP appears to be growing nearly 2% annualized -- at most -- in the current quarter. This rate is down from 3% during the first half of 2010 (before impending downward revisions), and 4% during the second half of 2009. Weakening support from the monetary and fiscal stimulus, the fading inventory rotation in manufacturing, and the consequences from Europe's debt crisis are an
This as an important moment in the history of the Cold War because it marked the start of a new series of talks between the Palestinians and the Israeli side. This moment also proved the importance of the State Secretary in relation to the issues of foreign policy and the international community. At this moment, some of the most important cabinets in the executive concern issues such as internal affairs
China-U.S. bilateral relationship The past one decade of the 20th century has witnessed dramatic fluctuations in the China-U.S. relations. For instance, the Taiwan Strait led to several summit meetings to take place in Washington and Beijing to decide the fate of the countries. Additionally, the decade ended with the relationship facing serious challenges including a U.S. congressional investigation on the contribution of the Chinese government to the U.S. campaigns (Huang 2000).
S. For its weapons sales to Taiwan. (Janbo) It must also be noted that China's Naval expansion is a departure from what many experts conjectured in the recent past. Like many before, Lee Lai To commented just a few years ago that China, regardless of its even then obvious desire to expand its naval might would be very unlikely to challenge the U.S. In any significant way. To argues that: "U.S. military
Since Chinese exports to the United States were six times greater than America's exports to China in 2006, it was a clear reflection of America's most imbalanced trading relationship. The debate on whether or not the United States should trade with China began in the early 1990s when America's economy was much healthier and Chinese exports to the United States were smaller. In the recent years, this debate has risen