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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 - 10:21 | 2539298 RiverRoad
RiverRoad's picture

True, Emile Largo.  The Chinese have better ways than trying to match US defense spending.  And cyber warfare is a lot cheaper.  BTW, one of Reuter's own news items which crossed the wires at 9:03 PM on 6/13/12 has disappeared into thin air.  It was headlined, "US lawmakers (US House of Representatives' Intelligence Committee) probe China telecoms for ties, contracts".  The news item went on to state:

   " *  Intelligence Committee deepened probe of Huawei & ZTE Corp.

     *  Potential threat to US national security cited

     *  Huawei is China's largest telecommunications gear maker "

 

 

Tue, 06/19/2012 - 10:46 | 2539405 Beancounter
Beancounter's picture

Yup-  and Huawei is getting bigger in the US too, because they're ....cheaper!  This is legit - it's over if Huawei starts to get government contracts or supply agreements with major contractors.

Tue, 06/19/2012 - 13:17 | 2539930 RiverRoad
RiverRoad's picture

They already have (big time) and that's the problem, and the reason behind the ongoing US House of Representatives' Intelligence Committee investigation.

Tue, 06/19/2012 - 10:19 | 2539304 Umh
Umh's picture

If anything they will trick the U.S.  into spending more resources on the military.

Tue, 06/19/2012 - 10:24 | 2539326 RiverRoad
RiverRoad's picture

The military-industrial complex will be delighted to be tricked like that.

Tue, 06/19/2012 - 10:33 | 2539352 optimator
optimator's picture

There will always be a lag between our military technology and China's.  It takes time for superior technology to go to Israel, and then to China, and then into production.  The only advantage is the money it saves China.  Look up Lavi J-10 for example.

Tue, 06/19/2012 - 10:53 | 2539415 prodigious_idea
prodigious_idea's picture

Agreed that they take the long view, but they are operating in a world very different than their idealogies likely anticipated.  Consumerism, housing, foreign investment "opportunities", forex, waste of oil (SUVs), abandonment of farms for jobs in the cities and access to information about the world via a variety of information channels are very different now than they were 100 years ago.

Tue, 06/19/2012 - 10:01 | 2539228 goldinpenguin
goldinpenguin's picture

Wow, India blew a big, early lead and Greece has been in a  2 millenium slump!

I think China will find a way to snatch defeat from the jaws of victory. An authoritarian, centrally planned non-democratic country may have it's day in the sun but eventually it will go off the rails. The one child (predominantly male) family policy and continuing industrialization will create huge social stresses.

And who would want to live next to a fast-tracked mass produced Chinese nuke power plant?

 

Tue, 06/19/2012 - 10:08 | 2539251 Ar-Pharazôn
Ar-Pharazôn's picture

if you really think that Kissinger will come to you and tell the truth, then you're a fucking retarded.

 

yeah, retarded

Tue, 06/19/2012 - 10:09 | 2539260 irie1029
irie1029's picture

Having rather significant exposure to China as well as expats there now I do not see military confilict between US and China.  The people of China have never had the benefits they do today.  War is the quickest way of losing that growth.  Chinese central planning is a whole hell of a lot better than western central planning.  Believe it or not the Chinese business is much more free than US. 

Tue, 06/19/2012 - 17:56 | 2540976 Cathartes Aura
Cathartes Aura's picture

from a globalist perspective, on a long, long timeline - China is the new investment corporation, and amrka has been developed, grown, and now is being stripped for "sale" - the investment part is over for this corporate entity, people are being laid off, infrastructure lies idle. . . etc.

the only "wild card" I see is. . . Israel.

Tue, 06/19/2012 - 10:11 | 2539270 roadhazard
roadhazard's picture

Nixxon went to China= the worst decision evah in the history of the US. Makes Carter giving away the Panama Canal look like child's play.

Tue, 06/19/2012 - 10:14 | 2539274 spanish inquisition
spanish inquisition's picture

If China was white Europeans, would Kissinger have an issue with what is happening? Nope. Because he wants globalization, but with white European bankers (or the self appointed pseudo royalty) in charge. Is the US still a democratic nation? I think the USS Diebold has sailed on that one, the only real class of American people with a vote is corporation$. Why is it that the globalists like Kissinger and Gates who complain about and look for solutions to population control, don't just get a gun and lead by example and do themselves? Because the problem they see isn't in Seattle or Brussels, it's just a coincidence that the dark skinned people all over the world is the area of the problem...

Opium redux. Anyone see a connection between the US position on poppy production in Afghanistan and the rise in high quality heroin around the world?

Tue, 06/19/2012 - 10:15 | 2539285 Vince Clortho
Vince Clortho's picture

The Central Banks will determine who fights who and when they do it.  Any analysis that fails to include this is worthless.

Having said that, there is money to be made, power to be grabbed, resources to be controlled and people to be enslaved.  This all has tremendous appeal to the parasitic sociopaths at the Central Bank.  So there will be more wars.

As an added bonus, war is a valuable method of combatting over-population and assisting in their Eugenics goals.  Your sons and daughters are expendable.  You are expendable.

An extra bonus is huge wartime armies provide an excellent opportunity to use soldiers as guinea pigs in biological weapons testing, mind control techniques, chemical warfare testing, and of course trying out the latest hi-tech gadgets on the battlefield in real-time conditions.

So it really has no downside, as long as you are a member of the global elite.

Tue, 06/19/2012 - 13:04 | 2539950 RiverRoad
RiverRoad's picture

We have war when war is convenient.

Tue, 06/19/2012 - 10:17 | 2539292 grapeape
grapeape's picture

when will we admit that kissinger runs this whole mother fu**er. he pulls all the strings and has for years.

Tue, 06/19/2012 - 10:17 | 2539294 Satan
Satan's picture

Quick question. Where would a war with China be fought?

Tue, 06/19/2012 - 10:25 | 2539328 Element
Element's picture

I'm thinking Merury, it's already pretty pock-marked, scorched and flooded with radiation.

Tue, 06/19/2012 - 10:33 | 2539354 Umh
Umh's picture

From Afghanistan & Japan?

Tue, 06/19/2012 - 13:17 | 2540001 ParkAveFlasher
ParkAveFlasher's picture

From the Cape of Good Hope to Okinawa.

Tue, 06/19/2012 - 13:05 | 2539955 RiverRoad
RiverRoad's picture

Cyberspace.

Tue, 06/19/2012 - 10:20 | 2539306 Blind
Blind's picture

Kissinger's and US's biggest mistake to mankind was to engage Communist China. US should have let the Communist ruled China fall in late 70s, and let it be replaced by a Republic.

Kissinger singlehandedly destroy a whole race by engaging a governing party whose only interest is to rule, rule and rule, and colonize its own people, and yes, take US passport. Great work, Kissinger!

And many academics in the west still mistakenly think that Communist Chinese is the descendant of the great Han people. Stupid. The real China culturally ended in 1949.

Tue, 06/19/2012 - 10:29 | 2539336 potlatch
potlatch's picture

I simply do not see how the West will ever allow a non-Western, totalitarian, non-democratic, yet industrializing and capitalizing, State to succeed.

 

It can't happen.  Granbted, as an economic power China will develop.  But the Chinese State, must first be completely destroyed.

 

I say that with no pleasure.  But, if one thinks the West is going to allow a non-western country to leapfrog the West economically, by avoiding the arduous political and social and philosophical journey the West has also undergone..

 

You do not understand history, and you are blinkered by your focus on economics.

 

The Red Chinese will be destroyed.  Sooner or later.  History, unlike Chinese restaurants, is not pick and choose.  You go the way we go, or you get kneecapped.  It is prix fix, bitchez, not ala carte.

Tue, 06/19/2012 - 10:37 | 2539370 Umh
Umh's picture

The premise was that as China developed a middle class they would become innately peaceful. I'm not sure of the logic, but believe it was that as they became more like the "free world" they would be assimilated. Of course the U.S. has done a real good job of getting rid of it's middle cllass so this concept seems dated.

Tue, 06/19/2012 - 13:04 | 2539954 potlatch
potlatch's picture

I would like to see the NSA assessments; I have never talked to a military officer who buys in to the "middle class will revolutionize them" argument.  Historically, middle classes, when allowed to grow in brutal states, ally with the tyrant.  Look at the revolutiuons of the past year; the middle classes were not in those crowds.

 

And this is known.  We will use theiur nascent middle class, or what is left of it, as a lever for agitation.  But the real lever is: you cannot industrialize in, what 10 years?

 

They have a century at least to pay due.  And we will make them pay it. 

 

Or are you forgetting the awesome power of American Dream?

 

The greatest weaponized ideology the world has ever seen.  it destroys worlds.

 

 

Tue, 06/19/2012 - 18:03 | 2541000 Cathartes Aura
Cathartes Aura's picture

perhaps the "middle class" tax cows are the "house pets" favoured of the globalists - they provide examples for incentives, for aspirational classes - and by aligning with their "most favoured" status, they too aspire to more monies, more toys, more stuffs. . .they keep the nationstate growth model meme.

but they've been milked now in amrka, time to move the plantation/farm to new aspirational classes. . . betrayal of nation state? sure, but that's been an historical certainty - perks never last forever. . .

corporate hostile takeover, stripping of assets, prep for sale - is this not the current model of "capitalism"? and the corporate state?

Tue, 06/19/2012 - 10:28 | 2539339 HistorySquared
HistorySquared's picture

 

Kissinger and Zakaria expand on this in the "monk debates." It's a worthy read. Kissinger believes China will first have some serious problems domestically, but the history of emerging superpowers - outside of the US taking the reigns from the UK - has not been good. 

 

http://www.munkdebates.com/debates/China

Tue, 06/19/2012 - 13:48 | 2539373 packman
packman's picture

Sorry but I'd like to see the sources for these numbers.  In some cases they vary vastly from the sniff test, and current data.

E.g. it shows China having about 3x the GDP of Japan in 2008.  Nope - they were pretty much equal, at about $6B - in 2008.

In 1 AD it shows India being about 5x Italy (i.e. the Roman Empire).   No, I don't think so.

Other than those two obvious ones, it does look about right.  Odd time scale though - it seems logarithmic (OK enough), but shows 1900-1913 and 1913-1940 as the same size in the scale, which is weird.

 

Tue, 06/19/2012 - 10:45 | 2539400 Beancounter
Beancounter's picture

Why not a conflict between Russia and China first?  I could more easily envision China invading north and west rather than try to hold a very resistant Taiwan.

Tue, 06/19/2012 - 11:07 | 2539465 EmileLargo
EmileLargo's picture

Because Russia and China both feel "encircled" by America and American "allies." They have more interests to share than they have in conflict. The Russians need to sell their minerals to somebody and nothing better than a dictatorship next door. The Russians also hate constant American meddling in their own country. The Chinese are the same.

Tue, 06/19/2012 - 11:10 | 2539481 HungrySeagull
HungrySeagull's picture

They don't need to try, having done commerce closely with Taiwan.

Tue, 06/19/2012 - 11:05 | 2539462 Joshua Falken
Joshua Falken's picture

That is why Barry's anti-protectionist comment to the G20 was sooooo funny.

 

Barry is a soiciopath - can't help himself - he will deliberately upset America's largest external creditor for domestic political point scoring.

Tue, 06/19/2012 - 11:07 | 2539469 Stimulati
Stimulati's picture

China's next major conflict will be with its own people.  Once people get a little scratch in their pocket they start thinking about extravagant luxuries like freedom.

Tue, 06/19/2012 - 11:25 | 2539582 SoNH80
SoNH80's picture

The Chinese are a cautious, patient people.  They won't rush into a war with the United States, as they know that it would be a disaster for themselves (think Naval blockades, food embargoes, etc. etc.).  It would also be a big booby trap for the U.S., even if it were to remain a "limited" naval and air war.  The Chinese Politburo is content to milk the American cow for all it's worth, improve their internal infrastructure to 2nd-world levels, and slowly, slowly integrate their 600 million peasants into the 20th century.  (The 21st century is too ambitious for the time being).  Hell, the Kuomintang might come back into power in all of China (beyond Taiwan) in 10-20 years, and we'll have Chiang Kai-shek's picture over Teinanmen Sq.  One thing is for sure, the governing elite in Peking isn't stupid.

Tue, 06/19/2012 - 13:13 | 2539969 RiverRoad
RiverRoad's picture

All they have to do is wait us out......re the old (American) Indian saying, "Sit by the side of the river long enough and you'll see your enemy's body float by." 

Tue, 06/19/2012 - 11:36 | 2539595 gdogus erectus
gdogus erectus's picture

That chart is gay.

And on a serious note, I'm sitting here in Shanghai for the first time in my life.  First time in China actually.  And all I can say is, fuck me.  Now I know where all the capital has been flowing.  And this is just one city.  Seriously - this place makes New York look puny.  And all of it looks brand new.  And cranes everywhere.  No wonder the Chinese are dissapointed when they come to the US to see our cities.

In fact, I'm amazed that the US is doing so well seeing what growth and transfer of capital there's been here.  I think the shortage message is bullshit.  I think we live in a world of abundance.  Shortages are manufactured.  This is nuts.  To see this in person, realizing that it's all so new makes you realize just how productive humans have become. 

Let's hit the reset button already!  It's going to be ok, guys!

Tue, 06/19/2012 - 11:42 | 2539645 SoNH80
SoNH80's picture

I've been in Shanghai myself (2004).  That was when the wheels really started to turn.  The 2002-published guidebook would recommend restaurants, clubs, etc., and 1/3 of them had been torn down and replaced by skyscrapers, within 18 months.  There were still pockets of the old backstreets where you could buy cigarettes for 8 cents U.S., and folks hung out their laundry to dry, fixed bikes, etc.  Now that's all probably been converted into a monorail station.

Tue, 06/19/2012 - 11:43 | 2539655 geewhiz190
geewhiz190's picture

suggested reading  for those interested soon to be released "The China Choice:Why America should share Power" by an australian author Hugh White. gotten good reviews from very credible sources.

Tue, 06/19/2012 - 12:06 | 2539762 loveyajimbo
loveyajimbo's picture

What in this piece made all the jews start to whine?  Jews are jews, muslims are muslims chinese are chinese... none of them ever make good Americans... as their base loyalty is always elsewhere.  Just the facts.

Tue, 06/19/2012 - 21:25 | 2541562 toomanyfakecons...
toomanyfakeconservatives's picture

I never seem to see Dominicans flying the stars and stripes next to the Dominancan flag on the rearview of their Japanese luxury cars... only the Domincan flag.

Tue, 06/19/2012 - 12:33 | 2539831 shovelhead
shovelhead's picture

China is mining and buying tons of gold and buying mines like crazy. I think a gold backed renimbi pretty much takes care of China's future dominant position. The dollar losing it's place as the worlds reserve currency will make the obvious clear that it is worthless paper. Lots of Pain in America when Oil is priced in gold.

Why fight wars when you can have the world come to you?

This may actually be a long term blessing because everyone will have to return to a gold backed currency to match the purchase power of China and America will have to turn inward to repair itself and be too broke to export 'democracy'.

There's going to be interesting times coming up because those who have the gold (and oil) make the rules, as always.

Not that I'm a geopolitical expert but all things considered, it seems like the logical thing to do.

Why share with the globalists when you can BE THE globalist that others have to follow?

Tue, 06/19/2012 - 13:15 | 2539992 RiverRoad
RiverRoad's picture

+  100

Tue, 06/19/2012 - 12:39 | 2539870 jmc8888
jmc8888's picture

Nothing but a game of monetarism.  The oligarch's bullshit game throughout history.  Not needed.  Not destined.  But stupidly walked into due to the power, control, and ideology that holds nations hostage to act in a pattern of dumbassery for the benefit of the few. 

Glass-Steagall

Tue, 06/19/2012 - 12:51 | 2539879 Skip
Skip's picture

Today's news:

Asian Americans are the highest-income, best-educated and fastest-growing racial group in the United States. They are more satisfied than the general public with their lives, finances and the direction of the country, and they place more value than other Americans do on marriage, parenthood, hard work and career success, according to a comprehensive new nationwide survey by the Pew Research Center.

Years ago His Holiness, the Dalai Lama, was speaking at a University in Washington DC, during his entire talk he was LOUDLY and RUDELY heckled by Chinese students, screams it was an outrage. Of the espionage, commercial and military, conducted via hacking or as at Lod Alamos and elsewhere, it has ben Chinese, in the case of military ON THE GROUND epsionage, US CITIZEN CHINESE.

Look at the polictics now in San Francisco. Indians are hardball players in US also. Frankly this is no longer America and once you understand that you can look at the news reports in a more understandable way. This was all planned, not mere happenstance. You won't like living in a nation that has a majority of people who HATE you because the color of your skin is pale and your eyes are round.

It is not mere supposition on my part, it has been based upon, not just personal experience, but polls done by even the NEW YORK TIMES, on Asian viewpoints of White Americans. Do you think YOUR children will escape it? Or YOU?

 

 

 

Tue, 06/19/2012 - 21:19 | 2541540 Cathartes Aura
Cathartes Aura's picture

Today's News Update:

globalism ball set in motion years ago, by those who have no "national" loyalties, and happen to be mostly "round eye" - best get used to competing for status now, being "round eye" no longer confers that on you via birthplace.

seriously, corporate statehood says everyone needs to get busy, whatever that word means to you. . . others have made better use of their time, amrkns need to get with reality.  drop the red/white/blue pom-poms, join "the great race" 

^^

Tue, 06/19/2012 - 13:04 | 2539951 duckarooni
duckarooni's picture

Economist Mike Kimel notes that the five former Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country's indebtedness.

Note that all 3 of the great crashes, 1907, 1929, and 2007/8 occurred under Republican presidents. Great wars followed within 10 years of the first 2.

I hope Obama gets reelected, world peace may depend on it.

Tue, 06/19/2012 - 14:26 | 2540279 Buckaroo Banzai
Buckaroo Banzai's picture

You're high on crack if you think the Democratic party offers any meaningful solutions.

Left-wing statists and their corporate cronies long ago hijacked both political parties.

Wed, 06/20/2012 - 12:52 | 2543964 monad
monad's picture

What do you mean 'left-wing', quimosabe? The waffle imprint left on our faces by the left & right jackboots is all the same.

Tue, 06/19/2012 - 14:55 | 2540400 lasvegaspersona
lasvegaspersona's picture

I suspect China will have to help us out when we get the wee dose of hyperinflation that has been baked into our cake. Unless they plan to invade and conquer they will probably try to ignore us like an old girl friend at a party.

Tue, 06/19/2012 - 16:14 | 2540707 Apostate2
Apostate2's picture

The history purveyed in this article is risable. Commonality, yes indeed at least for the short term. 'Perchance to dream: ay, there's the rub!  For in that sleep of death what dreams may come...'

Tue, 06/19/2012 - 17:29 | 2540911 earleflorida
earleflorida's picture

and who was it shipping the opium... the rothschild's! but, that's not all? what would you say if i said it was the churchill [btw, winston's mother was jenny jacobson?] family doing the shipping for the sassoon family

the only caveat was no opium trade was to be allowed in europe

Wed, 06/20/2012 - 12:49 | 2543950 monad
monad's picture

This chart does not account for the Roman civilization, the Dark Ages, the 3 plagues on Europe by the Mongols, the 300 years war or the American civilizations, and much much more. Its bright, meaningless propaganda.

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