Tame China now or face war later

By Hari Sud
Column: Abroad View

Published: November 13, 2009

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Toronto, ON, Canada, — The United States set China on the course to modernization and military power, but Chinese ambitions are running far ahead of the country’s publicly stated aims. It has no qualms about retaking Taiwan or the Indian state of Arunachal Pradesh. It is time the United States tames China to avoid consequences like Japan’s backstabbing when it attacked Pearl Harbor during World War II.

At home and in the region, China is peddling influence with its military might. For example, it created a diplomatic and military tussle over border issues with India because Tibetan leader the Dalai Lama wished to visit the birthplace of one of his predecessors in India.

In Washington China is peddling influence with money power, based on its cash reserves deposited in U.S. banks and the U.S. Treasury. Without selling their goods unhindered in the United States the Chinese would not have the money power they enjoy today. Their economic success is key to their belligerence.

All this happened in the past 20 years since manufacturing was gifted by the United States to China to counter the former Soviet Union’s growing prowess. That diplomacy has now come full circle and the Chinese are exerting economic influence on the United States. Military pressure is not far behind.

China’s economy has leaped from US$300 billion in 1980 to $3.5 trillion today, while its military spending has gone from US$7 billion to $80 billion during the same period. In addition, it spends some US$30 to $40 billion on unaccounted secret projects.

Asia fears two things about China – its economic domination and its military might. China makes no excuses for its military posture. Not only does it want Taiwan and Arunachal Pradesh, but also other territories like Vladivostok port from the Russians. It is just waiting for the appropriate time.

When the United States began aiding the Chinese with foreign direct investment in the 1980s, it also opened its markets to duty-free imports from China. Concurrently the Chinese currency was deliberately valued low to give U.S. imports a price advantage. So the United States began closing down its factories and importing cheap Chinese goods.

Presently, around 150 million Chinese work in the manufacturing sector, which supplies everything that a consumer in the West needs. The result is an annual US$300 billion trade surplus with the United States alone. This money is then deposited in U.S. banks and is used to finance the U.S. debt. China has accumulated some US$2 trillion in U.S. and Western banks, and these deposits are becoming a tool for China to dictate their foreign policy.

Former U.S. Presidents George H.W. Bush and Bill Clinton preoccupied themselves with the joy of the former Soviet Union’s collapse, while George W. Bush buried himself in wars in Iraq and Afghanistan during his term from 2000 to 2008. Due to their preoccupations, these presidents handed all advantages to the Chinese. Likewise, President Barack Obama is preoccupied with reforms like healthcare, education and banking and has paid little attention to the perils of the trade deficit.

In the next 10 years the Chinese economy is expected to grow at 8 to 10 percent, unless the yuan is revalued and China is forced to balance its trade. Unchallenged, its military expenditures are expected to increase at an exponential rate. Next, one might see the Chinese confronting the U.S. Seventh Fleet in the South China Sea. China would consider it a cakewalk to emerge victorious over Russia and India, and sees no reason to confront other small nations in Southeast Asia, which it considers its clients.

The strategic balance of the United States in world affairs is already slipping as it spends more time fighting financial collapse. China is most favored to take over if nothing is done to halt the U.S. decline. Although Russia has massive oil and gas influence, it is taking a long time to establish a new economic order.

China’s ambitions, kept in check for the past 30 years, have begun to slowly emerge. The new leadership dumped Mao Zedong’s tunic but continues to pursue his policies.

What is needed to stop the Chinese from this posture? Its economic clout has to be cut. First, the West has to untangle itself from the US$2 trillion deposited in their banks. Second, the yuan-dollar relationship has to be revised to give Western exports a head start and discourage Chinese imports. Third, manufacturing jobs need to be relocated back to the United States. Fourth, a commitment to defend Taiwan at any cost, including fighting a nuclear war, should be renewed. Fifth, a timetable must be set to balance trade with China.

An overconfident China is still puny compared to the economic and military might of the United States. China’s per head gross domestic product is US$2,600 compared to US$46,000 in the United States. China has been stealing technology to give itself a head start, although this is now being checked with more restrictions.

China’s naval power is nowhere near that of the United States. If Japan feels threatened and dumps its pacifist Constitution, the Chinese will have a bigger enemy to deal with near their borders. Also, a blockade of sea routes to the Middle East by India could severely hurt China’s export economy.

The United States’ inexplicable desire to borrow money is the main reason behind the rise of China’s political ambitions. The U.S. national debt stands at US$11.7 trillion, of which $2 trillion is China’s money. China knows that the United States cannot repay this anytime soon and therefore uses political and diplomatic power to influence its policy.

That is the reason for China’s hardened attitude toward the Dalai Lama and fresh moves against India. Recently, Obama refused to meet the Dalai Lama because he wanted to please China.

While the U.S. economy almost hit a depression in the past year, China’s economy managed 6 to 7 percent growth, which is a remarkable achievement.

All issues are likely to be discussed during Obama’s visit to Beijing early next week, but no noteworthy conclusions are expected. Obama has no achievements to show. His healthcare reform has bogged down while his popularity has suffered and losses in the recent gubernatorial elections are reverberating.

China’s emergence as a global power and its rapid growth have far-reaching consequences for the rest of the world, including the United States. This implies that China must be contained to avoid problems 10 years down the road. China’s export economy needs to be targeted, and nobody is in a better position to do that than the United States. In fact, it set them on this path and should control it.

Will China give up any of its advantages without a fight? It is highly unlikely. Just as China took 20 years to reach its present status, the United States will need 20 more to take it away.

China may start vetoing down U.S. resolutions at the United Nations. It may send aggressive naval patrols across the Taiwan Straits, or finance armed rebellions all over U.S.-influenced territories in Africa and South America.

Therefore the United States should do everything it can to contain China’s influence. Once its economic expectations are hit hard, it will come around sooner or later. Curtailing China’s ambitions should be the highest foreign policy priority for the United States. Without that, the long-term future of the United States is in peril.

(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)