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    04/28/2016 - 00:27
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  • Tim Knight from...
    04/28/2016 - 00:27
    I was expecting a few boring candidate statements of the U.S. Senate - AKA the World's Most Exclusive Club - but, boy, was I wrong. Just take a look at some of these gems.

The Inevitability Of US-China Conflict

Tyler Durden's picture




 

The question of whether conflict between US and China is inevitable is among the most important for the world as the US-China relationship, as JPMorgan's Michael Cembalest notes, is likely to be one of the most important issues of the 21st century. The inevitability view is sometimes explained by the thesis that countries rarely rise economically without also doing so militarily. The chart below looks at the major economic powers of the world since the year 1 at various intervals. Ignore for the moment some of the abstract issues which this kind of data involves; it’s pretty clear that China’s rise, fall and subsequent rise is something that hasn’t happened a lot over the past 2,000 years, and that the United States is on the front lines of having to adjust to it. Cembalest's recent interview with Henry Kissinger noted the impact of China's troubled relations with the West during the 19th century, which remains on China's political consciousness, and how China might define its interests in different ways than the West would, whether they relate to global energy security, North Korea, global warming, currency management or trade.

On China, and the not-so-inevitable clash of civilizations

At a client event in Beijing last week, I had the opportunity to interview Henry Kissinger on the 40th anniversary of his secret 1971 mission to meet with Zhou Enlai, and 1972 summit meeting with Richard Nixon and Mao Zedong. There are not many missions as impactful as this one was: within a few years, China’s re-opening began, propelled by Deng Xioping’s economic reforms. Reintegrating 20% of the world’s population following China’s central planning disasters of the 1950’s and 1960’s has not been easy for China or for the West, which has since benefited from lower imported goods prices from China, but saw an end to post-war manufacturing-led prosperity. The US-China relationship is likely to be one of the most important issues of the 21st century.

 

One topic we discussed was the question of whether conflict between the US and China is inevitable, a theme which has permeated a lot of academic and political science journals over the last 20 years. The “inevitable conflict” view has been advanced in different degrees by Yale’s Paul Kennedy, Princeton’s Robert Gilpin and most forcefully, by John Mearshimer at the University of Chicago. Similar concerns are found in “The End of China’s Peaceful Rise”, a 2010 article in Foreign Policy magazine by Elizabeth Economy, Director of Asia Studies at the Council on Foreign Relations. The inevitability view is sometimes explained by the thesis that countries rarely rise economically without also doing so militarily. The chart below looks at the major economic powers of the world since the year 1 at various intervals. Ignore for the moment some of the abstract issues which this kind of data involves; it’s pretty clear that China’s rise, fall and subsequent rise is something that hasn’t happened a lot over the past 2,000 years, and that the United States is on the front lines of having to adjust to it.

 

 

 

 

Any discussion of China’s engagement with the world needs to factor in China’s troubled relations with the West during the 19th century. Kissinger spoke about the impact this era continues to have on China’s political consciousness, which you can grasp by looking at some data and charts: opium imported into China which addicted up to 25% of its adult population, the exodus of Chinese silver to England and India to pay for it, and the collapse in China’s trade surplus. The Chinese Imperial Commissioner sent a letter to Queen Victoria asking her to cease the opium trade, which was banned in China in 1729 and again in 1836. Britain ignored the request. After a Chinese blockade of opium ships, the British invaded in 1840, and easily defeated the Chinese. China was forced to sign the Treaty of Nanking, one of the more one-sided treaties in history. The opium trade then doubled, leading to another war (and Chinese defeat) 20 years later. The Opium Wars played a large part in the collapse of the Qing Dynasty and subsequent occupation by foreign powers. This is not seen as ancient history in China.

 

 

With this backdrop, Kissinger encouraged our guests to understand how China might define its interests in different ways than the West would, whether they relate to global energy security, North Korea, global warming, currency management or trade. Kissinger acknowledges the pressures that come from an ideological predisposition in the US to confront the non-democratic world, and Chinese tendencies to sometimes view cooperation with the US as being self-defeating. However, engagement with the West is now central to China achieving its economic goals, and incoming governments in both China and the United States have every incentive to maintain the status quo. According to Kissinger, while conventional theories of realism in international politics point to potential conflict, it would be an overly literal interpretation to consider conflict inevitable. Both sides have a lot to lose and little to gain from conflict escalation, creating conditions in which compromises should be able to be found. If he’s right, US-China relations would be another thing that could go right in the world, confounding more negative expectations.

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Tue, 06/19/2012 - 09:16 | 2539057 midgetrannyporn
midgetrannyporn's picture

I had the opportunity to interview Henry Kissinger...

 

stopped reading right there.

Tue, 06/19/2012 - 09:19 | 2539065 Colombian Gringo
Colombian Gringo's picture

Of course there will be conflict since the chinese do not want any more bankster dicks up their collective asses.  Opium wars were all about royal families destroying the chinese for money. This is who these criminals really are.

Tue, 06/19/2012 - 09:24 | 2539092 CClarity
CClarity's picture

China has a major demographic problem of inadequate numbers of people aged 20-50 to support the young and old in productive labor.  They need to import labor, as strange as that sounds to most.  War is one way, or guest labor invites to other South Asian countries . . . but they don't have adequate housing for that, despite all those tall empty buildings.  When things are out of whack it often leads to conquest and conflict.

Tue, 06/19/2012 - 09:39 | 2539125 idea_hamster
idea_hamster's picture

One interesting take-away from the relative GDP graph is the crushing destruction of GDP in India beginning with the Raj and the UK rule, but little concommitant rise in UK GDP -- I think this, without more, could make a prima facie case for the deadweight loss associated with mercantilistic colonialism.

China sees a similar trend, with little effect on the European powers that controlled China during that period.

Sadly, you can also see how the bureaucratic culture that modern India has adopted from the 18th-century UK has continued to stultify India's economy relative to the balance of the world.

Tue, 06/19/2012 - 09:41 | 2539148 Short Memories
Short Memories's picture

Living in JP now, I don't really want to get caught in the middle. I hope they just manage to let of steam with some proxy war somewhere (as bad as that sounds)

Tue, 06/19/2012 - 09:43 | 2539156 BorisTheBlade
BorisTheBlade's picture

Don't we all hope that future disasters happen to somebody else.

Tue, 06/19/2012 - 09:59 | 2539218 DeadFred
DeadFred's picture

There is a reasonable hope that the conflict will be more about electrons and silicon chips and less about fast moving lead and radiation.

Fingers crossed

Tue, 06/19/2012 - 10:15 | 2539286 caconhma
caconhma's picture

Let the Zionist Banking Mafia and Chinese comunists fight an kill each other. So, the rest of world will be a better place to live.

Tue, 06/19/2012 - 10:21 | 2539311 DaveyJones
DaveyJones's picture

Can they focus their conflict directly at Kissinger? 

Tue, 06/19/2012 - 11:19 | 2539545 Atlas Shrugged
Atlas Shrugged's picture

Hmmm... They went to China in 1971... What else did Nixon do in 1971 again?

Tue, 06/19/2012 - 13:38 | 2540089 Cathartes Aura
Cathartes Aura's picture

he helped set in motion a globalised banking system, including debasing the relative wealth of amrka /west, and the beginning of a more "equalised" East?

those who are playing the "great game" of one world banking/trading system do not labour under the notions of separate nationstates, but merely work amongst themselves as "players" - with populations fed the flag-waving meme to guarantee massive citizen distraction. . .

and of course, occasional wars to thin the herd, make some conquest profits, feed the corporations who make the war machines that kill. . . these are inevitable, and are baked in.

who's taking delivery of all that London gold, every week?

Tue, 06/19/2012 - 23:05 | 2541814 JeffB
JeffB's picture

From the above chart, it looks like our economy has stagnated ever since, relative to the rest of the world.

Tue, 06/19/2012 - 10:57 | 2539434 smb12321
smb12321's picture

I've always viewed colonialism not as modern totalitarian empires (Germany, USSR, China) but as cultural cheerleading deeply embued with a religious and moral zeal.  The speeches and literature of the time were rife with arguments for introducing religion, stopping slavery and barbarism and bringing "civilization".  Colonialism brought modernity (schools, political organization, representation, infrastructure) even if much of it was forgotten as in the case of the Congo whose 30,000 miles of paved road is now less than 1,000 for an area larger than Texas.

India is forecast to become the world's greatest economic power, surpassing the Chinese with their disastrous 1 child policy condemning them to a Euro-Japanese clusterf**k of few workers to support a rapidly growing (and aging) population.   The investment/travel book "World Rightside Up" explains that European dominance was a relatively new (and now vanished) phenomenon.  Power has always been in the East y and now it flows back.

 

Tue, 06/19/2012 - 12:05 | 2539755 NorthPole
NorthPole's picture

It's clear you've never been to India. I've been there numerous times over the last few years and I can't imagine them becoming the 'worlds greatest economic power' anytime soon. As much as I like their food and I admire their talent in sciences, the place is a terrible, terrible mess in pretty much every single way imaginable.

Tue, 06/19/2012 - 15:13 | 2540118 Cathartes Aura
Cathartes Aura's picture

both China and India are known for their "preference" for male babies, and their efforts to achieve those goals, resulting in a skewed male to female ratio in their populations. . .

looks like they will have to "import" women for breeding, or export men - which, of course, results in the dilution of the race meme, as they continue down the one-world path. . .

these stories, they have a very long time-line, colonising, interbreeding, yes?

Tue, 06/19/2012 - 11:02 | 2539452 Stimulati
Stimulati's picture

I haven't dug into it but I bet Indian GDP remained relatively static while the West (US) grew rapidly.  The pie got bigger but India's slice stayed the same.

Tue, 06/19/2012 - 12:51 | 2539913 potlatch
potlatch's picture

I am suspecting it more has to do with India forfeiting the efficencies of a brutal police state.

Tue, 06/19/2012 - 15:08 | 2540438 CTG_Sweden
CTG_Sweden's picture

 

CClarity:

 

“China has a major demographic problem of inadequate numbers of people aged 20-50 to support the young and old in productive labor. They need to import labor, as strange as that sounds to most. War is one way, or guest labor invites to other South Asian countries . . . but they don't have adequate housing for that, despite all those tall empty buildings. When things are out of whack it often leads to conquest and conflict.”

 

 

 

I doubt that labour shortage will be a problem for China in the future. The possibilities to replace humans with robots and computers increase continuously. So far, robots have not become inexpensive enough to replace humans almost completely in automobile manufacturing, for instance. But over the past 30-40 years it is quite obvious that robots have replaced manpower to a quite substantial extent in the auto industry. As economies of scale for robot production improves and robots get less expensive, and also get get better, manpower will continue to be replaced by robots.

 

The only labour intensive sector where it seems really hard to replace labour with current technologies seems to be health care. It is hard to replace nurses with robots and computers.

 

An ageing population is no problem, provided that senior citizens can get other incomes than government pensions based on tax revenues from working people. If senior citizens can be supported by dividends rather than government pensions an increasing share of senior citizens is no real problem.

 

Furthermore, it will not be easier to support senior citizens if there are not enough jobs for young people. The US will probably have better demographics in theory compared to China in 20 years. But will there be sufficient demand for all these young people in the future? I doubt that, even if unskilled labour nowadays is so cheap in the US that people hire people for grass cutting rather than buy a lawn mower (furthermore, there are now automatic lawn mowers which don´t have to be operated or driven by humans). Considering the continuously increasing possibilities to replace manpower with machines I think that the US in the future will have an excessive supply of labour like today combined with an increasing number of senior citizens that must by supported by the same or a shrinking number of working people.

 

The solution to this problem seems to be increased savings for senior citizens and increased incomes from dividends. To me, it seems like a better idea if governments in economic downturns give all citizens a certain amount of money that can be invested in stock rather than building roads to nowhere like they have done in Japan for 20 years by now. Especially if investments in stock are restricted so that people can only buy new issues of shares or stock in new companies I think this is a better idea than investing in infrastructure which the society doesn´t really need.

 

-----------------------------

 

 

As regards the so-called inevitable US-China conflict I think that there will be no big conflict between these two countries since China in the end probably will wind up with the same or a similar power élite as North America and Europe. Since Hong Kong already is a part of China and since many foreign companies have lots of in investments in China I think that it should be possible to create a political base in China that gradually can take control over China as well. Perhaps the potential core of the power élite in Hong Kong (I don´t know to which extent other parts of China also can contribute with the right people to this core) is a bit small. Another problem is perhaps the composition of China in terms of religion. That may in turn be incentive to look for solutions not based on democracy as in the West but rather some kind of continuation of the current Chinese political model. But perhaps democracy will follow if they can change the composition of the electorate and conditions as regards religion in China.

 

But if it will seem to hard to take control over China from inside it is always possible to cut imports from China drastically and say that “we need to bring home our jobs, China does not practise fair trade, they are protectionists”. I know that the late Sir James Goldsmith as early as in the mid-1990s argued that Europe should raise import duties and stop importing things from East Asia in order to solve the unemployment problem in Europe. Perhaps there will be a renaissance for such ideas in the future?

 

Perhaps Plan A is to take control of China and Plan B, if Plan A doesn´t work, is the Jimmy Goldsmith solution?

 

Tue, 06/19/2012 - 09:30 | 2539108 kralizec
kralizec's picture

No room up there anyway with all the Chi-Com dicks fighting to get in.

Tue, 06/19/2012 - 09:18 | 2539076 Mr. Fix
Mr. Fix's picture

I think Kissinger started this mess.

 

Should have left them alone.

Tue, 06/19/2012 - 09:37 | 2539134 Raynja
Raynja's picture

Where are bath salts manufactured?

Tue, 06/19/2012 - 09:57 | 2539214 LFMayor
LFMayor's picture

at a trailer park nearest you!

Tue, 06/19/2012 - 09:37 | 2539136 kridkrid
kridkrid's picture

He started a lot of messes.  He is a very evil man.

Tue, 06/19/2012 - 10:24 | 2539324 DaveyJones
DaveyJones's picture

Harry Whittington told me accidents happen

Tue, 06/19/2012 - 13:47 | 2540129 Cathartes Aura
Cathartes Aura's picture

Kissinger within your lifetime, memory, has indeed been a major participant - but "this mess" is their story, and it reaches back centuries before any of us were born.

Tue, 06/19/2012 - 09:28 | 2539101 vast-dom
vast-dom's picture

there are constant conflicts via trade and political jockeying. just because overt violence isn't used does not mean china isn't handing out serious daily ass whoopings to the west.

Tue, 06/19/2012 - 09:51 | 2539191 mickeyman
mickeyman's picture

Is that her real name?

Tue, 06/19/2012 - 13:21 | 2540018 hangemhigh
hangemhigh's picture

@MTP:

I had the opportunity to interview Henry Kissinger...

please pass the cross dressing........MHFT does MDB............

Tue, 06/19/2012 - 09:16 | 2539058 Mr. Fix
Mr. Fix's picture

THIS MEANS WAR!!!!!!!

Tue, 06/19/2012 - 09:16 | 2539059 Badabing
Badabing's picture

dam the torpedoes

Tue, 06/19/2012 - 09:16 | 2539060 LawsofPhysics
LawsofPhysics's picture

Looking behind you to see where you are going will only get you in a nasty accident.  When paper dies, it dies the world over this time.  Who has the denser population centers again?  This is where the real "losers" will be found, dead.

Tue, 06/19/2012 - 09:21 | 2539082 GMadScientist
GMadScientist's picture

When they view most of their populace as an internal enemy 24/7, it's easier to stay prepared for the task at hand.

Who has the higher density of auto and semi-auto weapons?

 

Tue, 06/19/2012 - 10:34 | 2539356 prodigious_idea
prodigious_idea's picture

"In the last stage, known as the Ponzi stage, economic actors borrow in the hope that conditions will improve. This borrowing is designed to avoid insolvency during what is perceived or hoped to be a short to medium term setback in economic conditions."

Could be almost any G20 nation these days.

Tue, 06/19/2012 - 13:52 | 2540151 Cathartes Aura
Cathartes Aura's picture

it's good to try on the different perspectives. . . the Ponzi stage borrowers may be acting within the information that collapse and absorption of their nationstate is part of the ongoing plan, for which they will be rewarded for their participation (collusion). . .

even history as it is allowed to be written/told will point out the duplicitous embedded "rulers"

Tue, 06/19/2012 - 09:46 | 2539170 LawsofPhysics
LawsofPhysics's picture

Who is better trained and prepared at using such weapons.  might not matter in a nuclear ending.  What is your fucking point?

Tue, 06/19/2012 - 10:11 | 2539267 GMadScientist
GMadScientist's picture

That being in the cross-fire in a dense population center in the states may be worse than a similar fate in Beijing.

I'm sure there are legion chickenhawks in the US who have pumped their ego enough to believe they're good with guns...they'll be the ones lumbering around with .50 cals in bad camo being taken out at 200m with a handful of stingers by someone who actually knows what they're doing.

 

Tue, 06/19/2012 - 10:20 | 2539305 Uncle Remus
Uncle Remus's picture

Sooo, avoid dense populations.

Tue, 06/19/2012 - 10:56 | 2539430 LawsofPhysics
LawsofPhysics's picture

How many vets in those Chinese Neighborhoods?  These are the folks who know how to operate the tools you mention.

The cross-fire is another issue altogether, but a necessary sacrafice.  Some things never change, hedge accordingly, that is all you can really do anyway.

Tue, 06/19/2012 - 15:35 | 2540534 GMadScientist
GMadScientist's picture

That's about 1 in 10 civvies, even if you assume the distro is homogenous which it ain't. It's the other 40% of society that is well-armed, but poorly trained (another not-so-even distribution...skewed towards pop centers).

I'm sure there are many veterans in Beijing; compulsory military service has that effect.

 

Tue, 06/19/2012 - 09:31 | 2539110 Seize Mars
Seize Mars's picture

LawsofPhysics

Farmer, or engineer?

Tue, 06/19/2012 - 09:46 | 2539171 LawsofPhysics
LawsofPhysics's picture

Both.

Tue, 06/19/2012 - 09:17 | 2539066 GMadScientist
GMadScientist's picture

First expansion, then military build-up to hold what was expanded into; the way of Empires.

 

Tue, 06/19/2012 - 09:19 | 2539070 obelisks
obelisks's picture

Nostradamus predicted that the world would end when the eagle and the bear together fight the Dragon

but right now the dragon has joined the bear over Syria so i hope this means a few m ore years yet !

Tue, 06/19/2012 - 09:21 | 2539084 francis_sawyer
francis_sawyer's picture

did he say anything about turkeys?

Tue, 06/19/2012 - 09:22 | 2539085 GMadScientist
GMadScientist's picture

Eagles, and Dragons, and Bears Oh My!

Tue, 06/19/2012 - 09:25 | 2539094 francis_sawyer
francis_sawyer's picture

see right there?

all conclusions, as always, lead to "follow the yellow brick road"...

Tue, 06/19/2012 - 09:26 | 2539097 GMadScientist
GMadScientist's picture

Just make sure you're going the right way, or you end up in that spiral in munchkinland. :)

Tue, 06/19/2012 - 11:56 | 2539711 12ToothAssassin
12ToothAssassin's picture

Follow the yellow brick road to the Monarch and find a very deep rabbit hole.

Tue, 06/19/2012 - 10:00 | 2539224 LFMayor
LFMayor's picture

L. Frank Baum:  some folks call him snarky political humorist, I say visionary soothsayer.

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