This is my reply to a great article, The Great China Debate, over at the CFR’s Foreign Affairs Journal:
Hi, thanks for this great analysis,
I think we need to take a step back on this PRC thing and not be too quick to drink the Kool-Aid. I’m not suggesting we discount the impact of China’s growing significance, only that we put it in perspective.
” … Creditor status is also a misleading metric by which to judge China because it is usually used to describe financially open economies, and China is largely closed … ”
This is just a hint of how deep this quagmire of data gets. The PRC has acknowledged publicly that their figures are cooked; which is what tends to happen in any command economy of the flavor of Karl Marx. We don’t really know what the performance of the Chinese economy has been.
But its worse. Much worse. The demographic realities in China are the proverbial tocsin of things to come. This demographic, and the role China is expected to play in the next few decades, are mutually inconsistent.
There are additional factors; such as the ominous parallels between the PRC and the USSR, but they are too lenghty to get into here. My point is that China doesn’t add up. That’s not to say the U.S. does either, because it doesn’t. The servicing of the debt now consumes the entire discretionary budget of the United States; something that is obvioulsy not sustainable, even to a third grader.
The additional ‘hidden’ liabilities, being unknown, are even more dangerous to America. The U.S. needs a miracle.
And then there is the EU. The U.S. should bail them out instead of bailing out U.S. corporations that needed to go under. The EU is an ominous global development. The U.S. needs to “pivot” onto the EU.
I suspect we are going to enter into a global economic decline in which, relatively speaking, the U.S. is still the better off player. But things won’t be pleasant here, either. George Soros has made some brilliant comments on this point and I recommend his recent articles.
Having said all this, the U.S. needs to contain the PRC’s interests outside its borders, should they awaken, so that the job of western unification can proceed as fast as possible, imo.