Economic boom continues with electronics industry domination and infrastructure growth through trillion-dollar Belt and Road Initiative
Not since the British garrison at Singapore surrendered to Gen. Tomoyuki Yamashita in 1942 has Western opinion of an Asian power changed so fast. When China’s 2015 stock market bubble popped, prevailing Western opinion held that China’s economic boom would flame out in a debt crisis comparable to America’s subprime disaster of 2008 or the near collapse of Europe’s southern tier in 2013.
Now that China’s tradeable stock market has risen by 43% during 2017 in US dollar terms (with the MSCI-based ETF as a benchmark), Western opinion is melting up. Bridgewater, the world’s largest hedge fund, is raising money for a China investment vehicle. Bank of Americanow predicts Asian stocks will double in the present bull run. “Hedge Funds Used to Love Shorting China. Now, Not So Much,” declared a Bloomberg headline Sept. 12.
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The same applies to Western evaluation of China’s standing as a world power. Graham Allison’s The Thucydides Trap, a plea not to oppose China’s strategic challenge to the United States, now sits on the desk of every senior staffer at the National Security Council courtesy of President Trump’s national security adviser, Gen. H.R. McMasters.
Allison puts America in the position of the “established power,” like Sparta on the eve of the Peloponnesian war of 431-404 B.C.E., and China in the position of the “emerging power,” like Athens, arguing that the rise of China is inevitable. Allison’s book has many flaws, as I try to show in the forthcoming issue of Claremont Review of Books, but it depicts a vibrant, technologically-driven Chinese economy.
It will shock Americans who have been told for years that China merely copies Western technology by stealing trade secrets, and for that reason alone Prof. Allison’s book fairly might be called the most influential book of the year.
Allison warns:
In the three and a half decades since Ronald Reagan became president, by the best measurement of economic performance, China has soared from 10 percent the size of the US to 60 percent in 2007, 100 percent in 2014, and 115 percent today. If the current trend continues, China’s economy will be a full 50 percent larger than that of the US by 2023. By 2040 it could be nearly three times as large. That would mean a China with triple America’s resources to use in influencing outcomes in international relations. Such gross economic, political, and military advantages would create a globe beyond anything American policymakers can now imagine.
A sense of resignation, if not outright defeatism, pervades the Trump White House where China is concerned. Washington is dependent on Beijing in the matter of North Korea’s nuclear ambitions; it has no military option as matters stand, and no appetite to undertake the formidable investments in ballistic missile defense that would be required to contain the North Korean threat.