China

Is China a threat? A friend or a foe? Herman Cain doesn't know, thinks China might develop a nuclear weapon 47 years after they actually did so, but perhaps we can explore the question free from hystrionics and ignorance.

The Chinese are exporting enormous quantities of goods, and Chinese bankers have become a financial power during the last few years. Aside from setting Mao spinning around in his grave, this has caused a great deal of concern here. We're in hock up to our ears to the Chinese and scared they'll call our debts at some time when we're unable to repay them - like now for example.

The Chinese military is flexing its muscles and has become a regional power. President Obama just announced that we will now have a small military presence in Australia, and who else can it be aimed at containing? My own opinion is that the Chinese are contained pretty well already by the nations of southeast Asia, the Philippines, Australia, New Zealand, and Japan. Still, their target would be Taiwan and they'll probably expand their influence economically rather than militarily.

So, we run a big fat trade deficit with China, and must pay them large amounts of money as interest on loans they've made to us. But China has its own problems. The population of China has assumedly nearly stabilized, but that means its aging and they will have huge health care costs in coming years. Every bit as bad, the environmental degradation in China has been severe and is getting worse as China becomes a larger consumer of resources. Finally, the Chinese prosperity is distributed very unevenly - modernization is transforming Chinese cities, but much of the countryside remains poor and backward.

Should we be worried? I think a stable prosperous China is much to the advantage of the United States. Eventually they'll want to spend the money they're raking in now and we should be there to sell them our products, leveling out that trade imbalance. As China prospers, Chinese workers will be able to demand more money and government services, making their goods more expensive and foreign products more attractive. (This presumes that its oligarchical rulers can be compelled to loosen their grip on the government.)

China will continue to emerge as a major world power no matter what our attitude is. Lets make the best of the situation by wary diplomacy, not forgetting Tienanman Square, but realizing the best form of diplomacy is to do business with governments that are doing business.

(Funny. Seventy years ago when China was in chaos and much of the country was occupied by the Japanese, President Roosevelt was far-sighted enough to see that it would become a great nation, as it has been for millennia.)