What's happening in Chinese - American relations?

I've decided, after much thought and some (probably irrational) resistance, to experiment with a new means of disseminating my work and research.

So, to start, I want to summarize a talk that I've given twice in the last few weeks -- and am developing for a written piece, as soon as I can.

I’ve been thinking a lot the past year about the evolution of the relationship between the US and China. As 9-11 recedes (a little bit) into the background, China is returning to where it was in the summer of 2001 – first on the list of American foreign policy concerns.

The core argument of my talk is painfully simple: the Sino-American relationship is now central to the health of the global political economy, but it is not a healthy relationship. Stories about globalization and economic interdependence are important but they distract people's attention from the core of the relationship -- which is political.

I discuss three problems that need to be managed between the US and China -- urgently. They are conflicts over currency, over energy, and over property rights. How these issues are managed will tell us a great deal about the future character of what is now a bipolar relationship.

In fact it is a co-dependent, but asymmetrical, bipolar relationship – which makes it more unstable than the bipolarity we became familiar with between the US and the Soviet Union during the Cold War.

This relationship is threatened by attempts that each side will make to leverage asymmetrical interdependence. In simple language, the US is dependent on Chinese purchases of dollar assets to sustain the crazy yield curves of low long-term interest rates. The Chinese are dependent on continued US household spending (driven by low interest rates, the housing bubble they produce, and the resultant wealth effect on homeowners who now save almost nothing and spend the proceeds of their home equity loans on Chinese – made goods at Ikea). That’s codependency, but it’s asymmetrical in a profound sense. Break the relationship, and the US risks recession and stagflation. The Chinese risk revolution – after all, 9% growth keeps the middle class on the track toward wealth and farm workers coming into the Chinese industrial economy employed. A recession in the US is a nuisance. A recession in China could mean the end of the communist party rule. If you are sitting in Beijing and watching John Snow pressuring you to float your currency, wouldn’t you wonder if this is a low-cost non-military US strategy aimed at regime change in China?

Sino-American bipolarity is also threatened by the ability of lots of third parties to free-ride to their hearts content on the co-dependence. The US put up with a significant amount of free-riding on the dollar and on US defense expenditures during the Cold War. Of course, it was our allies that were free-riding back then, and in a real sense we saw it as something of an investment in their economic and political recovery. So Cold War free-riding was mainly about our NATO allies not paying their ‘fair share’ for defense.

My point here is not only that the US was willing to tolerate some of this. It’s that this kind of free-riding had a downside limit. Countries can’t put their defense budget below zero and impose more costs on the US that way.

Today, free-riding on the US-China currency bargain has essentially no boundaries. Are you a third party that wants to take advantage of the situation? You can multiply your bet to an unprecedented degree through financial leverage--- crazy negative amortization mortgages, hedge fund investments, and all sorts of other exotic financial instruments. There’s really no limit to what people can do here that impose costs on the bilateral bargain.

And people get smart about this very fast. I think the single biggest boost to innovation in the financial sector the last few years has been the opportunity to find new ways to arbitrage against the dollar - renminbi standard.

So it’s not just that Washington and Beijing have guns to each other’s heads, it’s that everyone else is running around emptying our pockets while we stand there.

This is as much a power game as a wealth game. That doesn't have to be bad news, but the sooner we get serious about it, the more likely we are to navigate through more successfully. History provides some examples of what NOT to do -- after all, the American record of managing bipolar relationships with a peer competitor in the 20th century is not a good one. More on that point later.

Comments

[Noah Flower]

Great to see that you've started blogging, Steve! I've added you to my newsreader already, and I look forward to future installments.

:)

[Jason Engelstein]

Hi Professor Weber. I was a student in your PS 120A class last semester. I was the student who would talk to you after class all of the time (we talked a couple of times about large vs. small states and which are better for state success in today's world). I thought it was funny that you were quoted by Friedman today. On the first day of class I suggested that he had presented a good theory of the post-Cold War system and you ripped through him. But what I found most interesting in your message on Sino-US relations is that you seem to suggest that China has more to lose from revaluing thier currency than the US does. I remember talking to you about this issue and at the time you seemed to have the opposite view. What information or realization has chnaged your mind? Did your mind even change? Also the Treasury just assured members of the House that China would likely revalue in the coming months. Do you think this analysis holds water?

[Jason Engelstein]

I forgot to add that I think your current analysis is the right one. My only fear is that the longer this situation persists the harder it will be to fix without a catastrophy resulting, particularly for the Chinese.

[steven streight aka vaspers the grate]

I'm wondering about your thoughts on a few topics.

You may wish to consider them, should you find any merit, in upcoming posts.

(1) War on Terror and Car Pooling. Why aren't we told to conserve oil and gas as a way to combat terrorists? And quit buying Afghani heroin.

(2) How are the New Media, blogs, podcasts, etc. and the New Economy interacting? The shift from passive reception of broadcast messages to active participation in message creation and distribution of microcasts.

(3) Impact of blogs on teaching and learning. Are students jumping on blogs as collab and information tools? Or are they more into text messaging and podcasts?

[Hank Balters]

I was wondering if you thought countries like Mexico, Chile, etc would try to economically undercut China's growth, by these Latin American countries once again striving to move cheaper goods into the United States.

Also, there periodically will be articles in the popular press which seemingly express concerns about China's developing military might - does possibilty of war in Asia factor into your notions?

[BBear]

In regards to $:

China is reevaluating ( their currency - very modestly, I would conclude) because they are scared we [USA] will look toward new economic opportunities in places like South America, for similar products that Americans love to buy and can’t get enough of, so to speak. I meant, in addition, we must continue to pay them a trade deficit imbalance ( in their private political opinion) so they can continue their military build up (via 1990s defray of American dual use tech episode) for the sense of political calmness, on both sides, and for democratic-oriented Taiwan’s sake – note the only 2% instead of 10-20% that many ( not very compromising IMO) American politicians were looking forward too. All it comes down too is that their government has convinced the people of China (Some by brute force, but most by savvy parler sway) that living modestly and working for a stronger China is more important than self gratification - or the current underlying American theme - which [self gratification] seems to dissemble all Superpowers in history (no matter what period or technological age or civilization which currently resides).

In the long run:
America is losing the social war at the moment ( in regards to China). China has convinced their populace that hard work and perseverance will lead to a stronger China and stronger Chinese community – evidence by their people living more modestly and working just as hard as Americans. America is failing in this department (too many reasons to cite here). This is of course, just my opinion.

[Lawrence Harris]

In reading Professor Weber’s article the main geopolitical concern for American foreign policy is again, as 9/11 recedes, the challenge that China represents to US interests. According to Weber the core of the US-Sino relationship is essentially a political one that greatly affects the health of the world economy, and in this regard the main problems that need to be managed are currency, energy, and property rights. Weber’s judgment is that the interaction of the US and China policies “is not a healthy relationship”.

However, while the relationship certainly has its problems, it may not be as unhealthy as one might think. Firstly, in regards to the “three problems that need to be managed”, the first (currency) has been somewhat acknowledged by China’s recent loosening of its yuan being pegged to the US dollar. However, by most accounts, China’s 2% devaluation of its currency is inconsequential. This may have been a mere concession to Treasury Secretary Snow’s entreaties for China to do something about the US trade deficit and to stave off a Congressional threat of trade tariffs. The second problem (energy) is becoming increasingly in higher and higher demand by China due to its rapid economic growth. However, this demand partakes of an open exchange marketplace of oil and China will have to abide by its parameters if it wants to avoid a geopolitical confrontation. The third issue (property rights) is being addressed by China’s membership in the WTO and that organization’s rules of compliance.

The relationship between the US and China is not exactly, as professor Weber contends, bipolar. Bipolarity is defined as a distribution of power capabilities where two states have relatively equal power. The case can not be made that China is relatively equal to the US, at least not yet. In the last fifty years the geopolitical scenario that really demonstrated bipolarity also manifested worldviews at polar ends to each other – liberal democracy vs. communism. But if it is granted that there is “bipolarity” between the US and China, is it correct to say that it is more destabilizing than the bipolarity that existed between the US and the USSR? Today China and the US are more economically interconnected than the US and USSR was at the height of the Cold War. In the latter case the two countries had aggressive policies that confronted one another through proxy states and, in the case of the USSR espoused a political doctrine that fomented worldwide revolution. Therefore the bipolarity that seems to exist between the US and China is, as Professor Weber states later, actually more of a bilateral relationship where there is clearly mutual benefit.

It is this element of mutuality that, at present, negates the characterization of codependent. Codependence is basically unhealthy, and this conforms to Professor Weber’s main point. In a codependent relationship the two sides are dependent on one another to the extent that it is essentially a deleterious relationship for at least one of them, because it continues a habit or behavior that is harmful to one of the dependents. However, is it codependency to have an interrelated economy, or is it what it appears to be -- an interrelated economy. Is it codependent because an upsetting of the functioning of the relationship would radically destabilize their respective societies? This certainly makes the US/China relationship problematic, but not essentially codependent.

That there are advantages to the economic relationship between the US and China is clear. However, this relationship could be threatened by strategic geopolitical leveraging that each side could make on the asymmetry of its interdependence. If the advantages of that leverage are to undermine each others power relative to the other and gain their strategic objectives, then the future US/China bilateral relationship is indeed in danger. But that awaits the future political posturing that ensues when a new actor on the international scene is not, or can not be, accommodated. Witness the rise of Germany at the turn of the twentieth century, the twenty years crisis after the Treaty of Versailles, and the Cold War.

[Lawrence Harris]

Professor Weber’s analysis of the risks associated with the reciprocal, yet asymmetrical, economic relationship of the US and China is interesting but perhaps a bit overblown. My reading of his thesis and the conventional wisdom is that if China were to cut its support for the US dollar and let the Yuan appreciate this would push US interests rate up. This in turn would burst the US housing bubble and push the economy into recession. It seems therefore that China is the key factor behind the interest rate levels in the US and the future course of the US economy. But is the US really dependent on China to sustain the US’s low interest rates and consequently the housing market? No. China does not determine US interest rates for the following reasons.

Firstly, the affect on the US economy is not as great as we are led to believe. In March 2005, China's holdings of Treasuries stood at about $223 billion compared to $158 billion in March 2004. The latest data shows that China's holdings of US Treasuries are the second largest foreign holder of US Treasuries after Japan, which holds about $790 billion. Both Japan and China hold about 48% of US Treasuries held by foreigners. By this estimation China’s holdings amount to about 10% of US treasuries held by foreigners. This is hardly a preponderant amount and belies any significant causal effect that China has on the US economy in general or the housing market and interest rates in particular.

Secondly, the key for the determination of interest rates is the supply and demand for money or by excess money. An increase in excess money leads to downward pressure on interest rates while a fall in excess money leads to upward pressure on rates.

Therefore, the key-determining factor in the setting of US interest rates is the amount of US excess money supply in circulation. Over time this excess is predominantly driven by the supply of money, which is set in motion by the Federal Reserve’s monetary policies. In this respect the Chinese factor is completely irrelevant as far as US interest rate determination is concerned. So if the economy were to fall into a recession on account of a bursting of the housing bubble the Federal Reserve System should be blamed and not China.

Professor Weber refers to the free-riding of third parties taking advantage of the US/China relationship. Third parties are the businesses that take advantage of the Sino-US economic relationship to provide goods and services to both countries. Previous free-riding was done during the Cold War by most if not all of the US’s allies. This was allowed because the US saw it as a form of reliance that bolstered the new international system that the US was bringing into existence. However, Professor Weber states that there was a limit to the costs on the US and the economic foundations of America’s economy were different. Yes, the US’s market share of world GDP at the end of WWII was about 45%, and it was a major industrial exporter. However, today America’s share of world GDP is a little about 30% and is no longer a major industrial exporter. But the “free-riding" that may be taking place at this present time in US/China relations is more the opportunities that are being taken advantage of by entrepreneurial businesses rather than those of mere capitalist exploitation.

Cheers,
Lawrence

[Lawrence Harris]

In response to Hank Balters' question about the the possibility of war in Asia.

It is generally agreed that there is a looming threat of conflict between the US and China because of their proximate strategic interests in both Central and East Asia. It must be understood that several moves by China suggest an expansion of their geopolitical posture vis-à-vis US strategic interests. Notwithstanding their regional geostrategic policies in the South China Sea, their continued antagonism towards Taiwan and their rather insipid aid in dealing with North Korea, China is extending its sway globally. This is bringing its influence into America’s proximity.

As evidence od this ambition and expansion China is using front companies like Hutchison Whampoa Lt. to set up strategic bases near key maritime "choke points" for control over shipping lanes, such as the Panama Canal. Most recently, this same company has taken control of the port in Freeport, the Bahamas – just 60 miles from Florida. Also, Chinese intelligence, military and political officials have already engaged in documented efforts to deny U.S. citizens their rights here inside America. The mayors of Saratoga and Alhambra, Calif., Seattle, Baltimore and St. Louis all have been asked directly by Chinese Consulate officials to rescind access to venues and proclamations in support of Falun Gong.

In regards to China's economic growth and democratization, it has been observed that in 1910 peace and prosperity reigned throughout most of the world. The prevailing sense at the time was that the great powers would use diplomacy, not war, to solve their problems. Winston Churchill, in his memoir of the time, “The World Crisis”, described the optimistic milieu as heady, “War is too foolish, too fantastic to be thought of in the 20th Century....Civilization has climbed above such perils. The interdependence of nations in trade and traffic, the sense of public law, the Hague Convention, liberal principles … common sense have rendered such nightmares impossible.” However, subsequent events unfolded with unprecedented calamity; the world had been tuned upside down; Europe lay in ruins; the old order had been swept away. Thus was ushered in the age of anxiety; and what comes of untutored optimism.

Cheers,
Lawrence

[BBear]

Lawrence Harris quote: "The relationship between the US and China is not exactly, as professor Weber contends, bipolar [...]"

You are wrong. Do you know how to define bipolar or polarity for this or any other matter?

Lawrence Harris quote:"Bipolarity is defined as a distribution of power capabilities where two states have relatively equal power."

Wrong. You need to learn meanings of words and not falsely accuse people of saying something or implying something they did not say or imply.

Polarity is NOT "relatively equal"

Polarity in itself is contradictory in nature. Have you ever been exposed to the term 'polar opposites'? – this means that the two entities implied (alive or not) are nothing like, or relatively equal to the other – in fact, they are opposed to each other in nature.

Another example comes from any simplistic dictionary: The possession or manifestation of two opposing attributes, tendencies, or principles: political polarity.

The correct definition of Bipolarity: Having two opposite or contradictory ideas or natures.

...Nothing to do with “relatively equal" in it, as you stated and falsely accused. So you accuse Mr. Weber of not being able to define something when, in fact, you have no idea what you are even talking about.

Lawrence Harris quote:"The case can not be made that China is relatively equal to the US..." -Lawrence Harris

Who said that? The only one is you.

[Lawrence Harris]

BBear wrote:
“Do you know how to define bipolar or polarity for this or any other matter?”
“Polarity is NOT "relatively equal"

I think the essay provided, at least, a qualified answer to the question of “bipolarity”. Now, some may find contention with the application of its use in the essay, but the term is defined, explained, and even somewhat expanded upon. However, the term “polarity” was never used in the essay nor was it ever stated or implied that polarity means “relatively equal”. In addition, several definitions in international relations glossaries, not regular dictionaries, define bipolarity as a system that has two predominant states or two great rival alliance blocs, or an international system in which there are two dominant nation-states. These definitions imply relative equality.

Most importantly, definitions, especially in the social sciences, require context to be clearly understood. The essay and this “blog” in general are about international relations and a civil discussion of ideas. So in the context of international relations the use of “bipolarity” is about the condition in international politics in which two great powers largely determine the course of world events as they compete for territory, influence, and power. Now the term “compete” is understood to mean a contest between relative equals or else there would be no contest. For example, consider, as is well known, the United States and the Soviet Union during the Cold War; the United Kingdom and France from the reign of Elizabeth I to the Napoleonic Wars; and the Roman Empire and Carthage leading up to the Punic Wars. In these cases the outcomes could conceivably gone either way. Why? Because they were relative equals in terms of the determinants of national power. Hence the political situation in their particular regions of the world at their respective times was bipolar – relatively equal.

In addition, Christopher Layne, in "Rethinking American grand strategy: Hegemony or balance of power in the twenty-first century?" (World Policy Journal, Summer 1998), states that “During the Cold War, the bipolar nature of the U.S.-Soviet rivalry in Europe stabilized the superpower relationship by demarcating the continent into U.S. and Soviet spheres of influence that delineated the vital interests of both superpowers. Each knew it courted disaster if it challenged the other's sphere.” Isn’t it logical to assume that one can only have a “stabilized” situation between relatively equal parties and that mutual destruction is only possible between relative equals? Layne goes on to say that “… bipolarity; [is] a clearly defined, and accepted, geopolitical status quo;” Therefore, if bipolarity is the status quo, and status quo in this case means the condition that existed between two international actors (US and USSR), then bipolarity implies relative equality.

One of the main contentions in the essay was that Professor Weber was perhaps over-using the phrase “bipolar” with respect to the relationship between the US and China and therefore implying “relative equality. Bilateral is a more accurate description of the relationship, which Professor Weber did later use. If bipolarity means relative equality in power between contending states, then the attributes of national power – geography, population, political influence, economy strength, military defense, natural resources and technology -- are still disproportionately in the US’s favor and mitigate against China being a significant global contender at this time, though its designs on regional power are quite evident.

Cheers,
Lawrence

[BBear]

Lawrence Harris quote: “I think the essay provided, at least, a qualified answer to the question of “bipolarity”.”

Wrong still - U called bipolarity –“relatively equal.” This is incorrect. It was correctly defined, as followed, and was used with, as was codependency, and manage – all themed words – and with acute purpose in the piece.

Lawrence Harris quote: “Now, some may find contention with the application of its use in the essay, but the term is defined, explained, and even somewhat expanded upon. However, the term “polarity” was never used in the essay nor was it ever stated or implied that polarity means “relatively equal”.

Let me say this again and drop the root bomb because you are not a level of understanding of what is actually in a root of a word itself:

Here is what you said and I disagreed with [Posted by: Lawrence Harris | July 24, 2005 05:36 PM] Lawrence Harris quote: "The relationship between the US and China is not exactly, as professor Weber contends, bipolar [...]"

Do you know anything about entomological origins or roots of words or did that escape your schooling somehow? The word polarity is an extremely important part in the combined word of 'Bipolarity'. Can you see the word polarity in that word bipolarity? Good. If the word had a determiner of ‘ in’ [ not] like inpolar, then you would be on the right track – but it is not. ‘Bi’ in the term only meant two polarities – whereas polarity, in it self, can have more than one polarity if we go into physics, per say. Do you think that it matters the least or even at most with issues of not being relatively equal – possible you mean a ‘relatively competitionesque’ meaning that I might propose here?

Lawrence Harris quote: “In addition, several definitions in international relations glossaries, not regular dictionaries, define bipolarity as a system that has two predominant states or two great rival alliance blocs, or an international system in which there are two dominant nation-states. These definitions imply relative equality.””

Nope: I would say relative competition.

The keywords “rival” and ”two” do not further your argument either. A + B /= doesn’t equal C. if China [A] and United States [B] are actually different in all categories defined, here, than the equation is not relatively equal, as you propose is such and that Mr Weber is incoorect.

In general, I was addressing only the post on [Posted by: Lawrence Harris | July 24, 2005 05:36 PM] in my replay and nowhere are you addressing the over use of the term ‘bipolar.’ You only argue against its proper usage, which is fine in your own opinion but which is wrong , and nowhere is that statement implied or stated as u assumed. In addition, bipolar and codependency go hand in hand in the analogy of the piece, as you say it yourself, a ‘’deleterious relationship,’’ but disagree – thus is the theme and you can have your opinion – you just defined bipolar wrongly and accused someone of not defining it correcly in such of way that it was in bad taste.

In regards to Not relatively equal:

I see china becoming increasingly stronger, including militarily, socially, and economically and I see the Untied states at a standstill and slightly decreasing in all areas of importance – so, thus, in my opinion; this is a codependency relationship as discussed, and rightly described, in the piece. You disagree. You stated that BIPOLAR is Relatively Equal – it is not. Possibly bilateral is working toward equality, still an iffy statement at best, but the term bipolar is expressing an imbalance that is the opinion shown here and is also thusly defined properly. There is ample evidence I might add.

The notion that one side has the more than the other, at any given time, is always the key context. A teeter-totter is not equal – ( one might think so but) one side is either up or down in theory. That is its purpose. Even when describing the symptoms of the disease of a Bipolar Manic Depression BMD – the termage [my word] used - one side of the brain (in theory) is dominating the other, at any given time, – not a bilateral expression, per say – expressing ease and growth of which benefits for both. It is more of a disease, or an affliction. Thus, in my opinion, and the places described with the term bipolar, the term sticks to the logic and is utilized correctly. Here I will explain why.

It is possible that you see this as a half glass full or empty scenario, whereas, you see this total relationship ( of America) with China on an equal footing or as in its expression on all levels as a nice relatively equal relationship. I do not and nowhere was it implied as you implied it was.

Good will politicians want to see this glass half full with the usage or optimistic term of bilateral relationship, such as with the case of your argument. However, many see this with the vision of the glass half empty in that China is getting the best of the deal and in the long run, this might be added - because America will have to face the music, so to speak, in the near future – the bubble will pop.

The codependency that is eluded to in this piece, but you cannot fathom it – noting your response[s] - is that America is hanging on to its lifestyle while economically being dominated by China for their ultimate long term gains and success. Our politicians know this- so this was nothing new here. America is dependant on China, as is China is dependant on America for different reasons altogether (not relatively equal, I might add or bilateral in theory) – their plan is world dominance and America’s is ‘just hanging on to what little lifestyle of the rich and famous we have left ‘ntill we fall which has been expressed in the previous administration – that, or coerce, is a forgone conclusion. So...

A bilateral relationship best describes a friendlier relationship, not seen here. Usually two nations grow closer and more, as you see its prefix usage here [ bi -lateral is opposite, although implying a lateral movement expressed in resolve as in friendships which resolve things|| as opposed to the term of [bi] polar - no resolve or lateral ease in conciliatory scenarios], dependant upon one another. However the growing closer is not a fact with China and the USA.

Ideologically China and America are going in two opposite directions [ notice the term polar and not lateral for the point proven]. China has a little ultra nationalism thingy going within its leadership agendas paramount in this direction, and America is continuing civil rights and struggles to achieve a social climate proper, whereas everyone one is free and has equal rights and representation. China hardly cares about any of this at the moment and that is why 685 a day Chinese commit suicide or about 250,000 People a Year Commit Suicide in China.

Suicide is the number one cause of death among people aged 20 to 35 in China. Each year an additional 2.5 million to 3.5 million Chinese unsuccessfully attempt suicide, which stood as the fifth major cause of death among China's 1.3 billion people, the China Daily said. As the fifth major cause of death in China, how is this comparable or equally relative' to America? There is a comparable, no?. Many think that it is because Chinese are not allowed as much freedom to chose their own destiny as any American whom knows that this is his or hers basic right.

I do not see relatively equality statue here – I see two bipolar entities not having any equality as defined in the word polarity/bipolarity itself.

Both definitions require inequality at some level or point. I’m not concerned about any other scholars whom ( you cite) cannot figure out how to define words or definitions either – and I do not care if they reach fame – they are wrong [On this point alone].

I think you meant to say friendly ‘relative completion’ at its political expediency. There is nothing to do with friendship or relative equality between America & China. The only relative equality that stands in the way, to confirm your argument, are basic human needs and desires – nothing to do with economic, political survival to reference Machiavellian survival strategies, to make the point better described here.

China over the last 12 years has made it extremely, extensively and undoubtedly clear, that we are not friends – just business partners for the short term. I do not call that a bilateral relationship where the sub-term lateral more clearly defines easy access and easy flow of lateral movement of information with growth productivity between the two sides.

China has stated over and over that America is their number one enemy. Their generals as early as 1996 have threatened to nuke America, including in 1999, [one general spoke on ] of taking out Los Angles if we get involved over the issue of Taiwan. Then their was another episode, of the same, but with a different retired army official, last week. Abruptly, retired or not, they speak out with words like this, and especially to the public news like what happened last week? - How many places can you cite where American generals have threatened to take out the Chinese with nuclear bombs or missiles? If so then you have a victory for ‘relative equality’ – yet, I see none in the criteria defined here [ econ-poli]. I say America and the Chinese are not in any ‘relative equality’ of importance issues spoken in the piece.

Maybe you can help me out and show where there is this friendly or relative equality between the two in comparison in the subject byline of economics and politics of a general state. You want to see an angry Chinese Communist neo-fascist administration go crazy (this has nothing to do with the common people at all) – you have the House and Congress ban Chinese goods to America and you will see a codependent, dragon with its head cut off, emerge in fury, along with fire, ready to tear anyone’s head off - because it was not a friendly bilateral ‘ growing together relationship.’ – it was bipolar and codependent – just like taking medication away from BMD patient, as described above, you will have severe disturbance. Now severe disturbance doesn’t take place under normal bilateral relationships – especially when they end, because both grew out of the relationship in good spirits – which is not the case in point with China – basically they are taking our wealth - only a codependent one - because it is a disease that is being ‘managed’ and is the key underlying thesis here.

You can have your own opinion, but define words correctly, for everyone sake, and back them up with proof. I see none in your argument. If China and America are relatively equal then state-it-man! I think that is what part of this forum was put here for in the first place – to compare and discuss - Not to accuse and ill define. The onus is on you to back up your statement[s] that:

[Posted by: Lawrence Harris | July 24, 2005 05:36 PM] Lawrence Harris quote: "The relationship between the US and China is not exactly, as professor Weber contends, bipolar [...]"

…If it is not bipolar or as defined by you, and thus, not relatively equal then back it up with the comparisons of proof to all criteria described in the piece. …Furthermore, including three major dictionary definitions – not other people’s personal redefinitions, mind you.

To me they are not equal as you say – it is a bipolar, codependent, dangerous relationship. They have stated over and over they are not our [USA] friends, and thus it must be ‘managed’.

Now you [ ‘try’ ]can back up your statement that Weber used the wrong term by addressing or proving what I said , was in fact [not], wrong with current events, and facts – not other redefinitions by other professors or your savvy parler sway.

[jipi]

some points i'd like to make. (from a non-China Chinese point of view)

- (social) chinese are hardworking in general. you can't say.. hey.. because you are hardworking, you are stealing away my wealth.

- (political) chinese government is 'ok' at the moment. you can't say the previous previous lousy chinese government which let the rest of the world run over them is good right? (or it did a lot of good for you?)

- (military) chinese military buildup/reorganisation and reform is of relevance. If china starts to have important foreign investment (in china) and important assets which they think they should really treasure and protect. What's wrong with protecting it against people who seemed to have a liking for it. (look at history)

hey too bad if there are some people who are paranoid of The Chinese Buildup in all sectors. it's just something happening and The only thing that might stop them (I guess) is themselves. (from history again)

phew!

[Mr. Econotarian]

China has brought several hundreds of millions of its people out of absolute poverty (defined as making under $1 pe day) through its acceptance of the free market.

My interpretation is that the Chinese Communist Party is very concerned about Falun Gong, Taiwan, and anything that may be seen as a slippery slope to regime change (be it democratic, or otherwise).

Ironically, the economies of Taiwan and Mainland China are becoming more intertwined every year, and I think that the Chinese Communist Party recognizes that if they attack Taiwan, it would lead to dire economic consequences for them. So they instead choose to sabre-rattle as close to the edge as possible to keep Taiwan "under control". Taiwan, meanwhile, is not under mainland control, but prefers not to rile up Bejing by insulting them by announcing formal independence.

I believe that the generals on the take from government-owned factories, and corruption rents from private Chinese industry, are probably not going to actually go to war with anyone. But they will try to sabre rattle a lot with the US and Taiwan.

On the other hand, should a democratic revolution from the grassroots actually occur in China, it could lead to global economic disaster. Or, perhaps it could be done in some "velvet" way.

[Eric Lu]

China puzzle

China is still a puzzle for most Americans and even most Chinese. China, the last communist power on the earth, the persistant human rights vialator and most suppressive regeim, how could it rise so fast and so furious in the past ten to twenty years. Now, everyboyd, especially from the right, worried about the china theat. China rising is truelly a miracle. It all started by Deng Xiaoping in 1980s. It persued a West oriented policy and open door policy. Basically, Deng Xiaoping abandoned authodox Soviet style planned economy and tried economic reform. It is accelerated after 1989 Tiaanman square. After 1989, China policy is persuing economic reform without political reform. This will irritiate both left and right to no end. How could an authoritarin achieve economic success? It goes again every theories and comfound our sense of good versus evil. It turned out that the world is acturally gray. China, the big dragon, essentially followed the path of four Asian small dragons and Japan. You get rich only by exporting to American. All the Asian economies were in authoritarina regimes. Taiwain, south korea, Japan, one party rule and sigapore. It turns out authoritarin regime is necessary for rapid development as long as it pursues a good solid economic development policy. Of course, it could lead diaster by persuing a wrong economic policy like Mao Zengdong and current Mogarbe in Zambarbuve. Deng Xiaoping is perhaps the greatest Chinese in twentieth century. He was purged by Mao zengdong twice and could be killed anytime like many of his collegues during culture revolution in 1970s. He knew the stragegy of retreat and apologized to Mao Zengdong to his mistakes and professed absolute loyaties to Mao. So Mao spared his life. Like the a whole generation of Chinese who wittness the result of Mao's wrong headed economic policy, Deng already made up his mind about the future of China. We all know socialist policy did not work. He set the course of Chinese economic development as the major goal regardless political ideaology. He also set up political stability as no.2 policy. That means Communist rule without question without democracy. Third, he set up rule against life appoitment. He knew what life apointment of Mao zengdong did to China. He retired from power before he died. He also forced his successor to serve only two terms just like american presidents. It is basically regime change after every ten years but the policy is consistent and also nobody has absolute powere. The rule is typical through consensus just like most asian country.
Now China and American is in a mutual beneficail economic symbiosis. American buy cheap chinese import, Chinese buy US treaury bonds to keep a long interest rate enabling American to borrow more and consume more. It is a win-win situation until one day you can not borrow anymore. This occurred all contrary to left and righ ideaology. It occured because American is an open economy and facing less restriction to where and how it imports its goods. It also occurs because China pursed an open-door policy for foreing capital and maintained a flexible labor market. Basically, with assistance of Honggong and Tainwain bussinessmen and capitals from all over the world, private factories were set up in southern and eastern china, it employs thousands of labor from countryside which has excess labor. It uses western technology and capital to produce products and then export to US. Because huge labor-saving. American manufactures did not have a change to compete with Chinese manufactures. Whether you like it or not, it is brutal economic force. But do not tell that to the workers who lost job to Chinese. The political backlash is understandable and predicable. That is why American has to change from manufacture economy to service economy. When you go into any US department store and pick up any merchandize, you have 80 to 90 percent chance to find out it was made in China. It showes the power of Chinese manufacture and global economy. It is a win-win situation. That is why Alan Greenspan can keep interstes low without cause inflation. It is not only productivity gain in US because of information technology. It is also cheap labor force in China and the productivity gain in Chinese factories with the help western technology and Honggang and Tainwain bussiness management. We can turn this win-win situation into lose-lose situation by closing our market to China. Inflation will return, no more cheap goods. We still will not save any manufacture jobs. As capitalists will certainly search for another low cost pruducer. We can turn this a win-win situation by open up Chinese market. So maintain good China-US relationship is not only essential to the future prosperity of both country and world stability. Do not worry about authoritarian regime whether it is communist or Guaomingdong in tainwain. I am confident that with economic development, China will follow the footsteps of singapore, south korea and tainwain into a democratic society. It just takes time.

Eric Lu