Re: In Which I Define Ginning-Up

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There was a recent Pentagon report that claimed that the Chinese military budget was three times what it was previously believed to be. Notions like this are obviously in the pentagon's interest, since they justify cold war style weapons systems. The Chinese: they're big, they're high tech. We need to authorize the B-4 Bomber, which can evade radar, travel at light speed, and reverse time!

Fortunately, NPR brought on a china specialist who returned the picture to reality. He pointed out that a cold war style global confrontation is not in the interest of the chinese, who have built their prosperity on trade. He was blunt: the chinese have no global military interests. They do, however, want the honor that comes from having a world class military. So actually the moves the Bush administration push them to militarize. Bush said (I'm still paraphrasing the NPR guy) that the US would have total dominance of space. We could put up any satellite, and shoot down any satellite, and no one else could do the same. Well this basically forced the Chinese to start publically testing anti-satellite technology, just to save face.


Posted by: rob helpy-chalk | Link to this comment | 03- 7-08 3:35 PM
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the Chinese are established as enemies in the public imagination

There was a guy in my major in college who was ex-Navy and absolutely convinced that there would be a nuclear war with China before we graduated. This was late '90s; people who go looking for overwhelming enemies almost always find imagined Chinese hiding behind the sofa.

Another problem with the common belief in China as an enemy is that we have absolutely no concept of how vast and diverse China is as a nation. It's, what, 1 in 5 people in the world? One could probably find three Chinese hackers who claim they're reincarnations of Liberace. Using the unproven boasting of three random people from a country of over a billion as an excuse to rattle sabers is exactly the same cynical manipulation of ignorance we've seen re: Iraq only times 48 (in terms of their relative populations).


Posted by: Robust McManlyPants | Link to this comment | 03- 7-08 3:37 PM
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We're an unbelievably paranoid nation.


Posted by: apostropher | Link to this comment | 03- 7-08 3:40 PM
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congresspeople and people at the Pentagon had a fit, because better relations with the Chinese threatened their pet big-budget projects.

This is the kind of crap that makes me want to throttle people. Especially when they then turn around and make all sorts of bullshit statements about how it would be Wrong to Talk with Human Rights Violators (or what have you), and then every dickwad you ever argue with over anything gets all self-righteous about the Commies, etc.

I mean, be as cynical and self-serving as you like. But for fuck's sake, can you please just be honest about it?


Posted by: bitchphd | Link to this comment | 03- 7-08 3:42 PM
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What was it that Mao said about war with America --- it would be terrible because America's nuclear weapons could kill half a billion of his people, and then he'd only have half a billion left.


Posted by: Gonerill | Link to this comment | 03- 7-08 3:44 PM
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3 guys named Li. Paid for by the US Air Force.

I don't know how the latest Air Force ads are not seen as lobbying. The latest one I saw was how USAF Cyber Command is needed to protect the Pentagon.


Posted by: md 20/400 | Link to this comment | 03- 7-08 3:53 PM
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2: Yes there was a lot of talk among the neocons about China in the late 90s at the Project for a New American Century there is a whole string of William Kristol and Robert Kagan pieces detailing how China was the new big menace.


Posted by: JP Stormcrow | Link to this comment | 03- 7-08 4:08 PM
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We're an unbelievably paranoid nation.

I'd use fearful instead of paranoid, but yes.


Posted by: Ugh | Link to this comment | 03- 7-08 4:19 PM
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Oh yeah, before I left, I wanted to link to This from today, just to prove I read all the sites apostropher misses.

I don't know who owns who, but there ain't gonna be no war with China.


Posted by: bob mcmanus | Link to this comment | 03- 7-08 5:16 PM
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2: Whenever I the usual idiots trying to convince me we'll be at war with China any day now I always throw out the following two questions?

What would happen to the trillion dollars worth of Chinese held US government bonds if the US went to war with China? How would this affect the US economy?

Of course, they never seem to have an answer.


Posted by: Juicy Lurker | Link to this comment | 03- 7-08 5:17 PM
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10.2:Uh, we would default on the bonds.

As long as we kept decent credit with the rest of the world, and found someone else to buy our bonds, I don't think it would be a problem. Not counting the nukes.

But who would make our fucking sports shoes?


Posted by: bob mcmanus | Link to this comment | 03- 7-08 5:27 PM
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They're turning kids into slaves just to make cheaper sneakers
But what's the real cost, 'cause the sneakers don't seem that much cheaper
Why are we still paying so much for sneakers when you got little kid slaves making them
What are your overheads?


Posted by: | Link to this comment | 03- 7-08 5:43 PM
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11: Would the rest of the world be willing to lend the US money if they defaulted on their bond commitments? I wouldn't think so. I've heard whisperings that the major US bond holders are already trying to deversify their bond portfolios. Is this true? A default would be the nail in the coffin wouldn't it?

I am certain our genius leaders would factor this into their equations. Fact of the matter is, the US needs the Chinese as much as the Chinese need the US.


Posted by: Juicy Lurker | Link to this comment | 03- 7-08 5:47 PM
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What are your overheads?

Defense spending? We build huge deficits to kill Middle Easterners to get oil to China, who buys our bonds so we have money to buy sneakers. The Sovereign Wealth Fund helps the Chinese peg their currency,which keeps Chinese domestic spending, wages, inflation down, ie, sweat shops and slave labor.

I think it is called a virtuous circle or something.


Posted by: bob mcmanus | Link to this comment | 03- 7-08 5:50 PM
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13:If we defaulted during the course of war with China, the rest of the world would have bigger concerns.

But it is more complicated, I don't know if we can just default on the Chinese bonds. I don't know fungible those bills are.

Argentina just defaulted, suffered, survived. After a while, deals wre struck, 30 cents on the dollar. And we aren't Argentina.


Posted by: bob mcmanus | Link to this comment | 03- 7-08 5:55 PM
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T-bills are incredibly fungible. But just owning a T-bill doesn't give you any leverage on its own. The Chinese could sell them on the open market at depressed prices, which would make it more expensive for the US to borrow money, because there's no point paying the US $1 for something the Chinese will sell you for $0.50. They could not buy new ones to replace ones that mature, which would also make it more expensive for the US to borrow money. But as near as I can tell, that's about it.


Posted by: water moccasin | Link to this comment | 03- 7-08 6:03 PM
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They're turning kids into slaves just to make cheaper sneakers

That's why I buy shoes made by Moroccan kids, not Chinese. One day I hope they thank me.

Which isn't to say that I care too much for Chinese imperial ambitions: I know a Chinese expat who has no kind words at all for the Dali Lama. The Dali Lama!

the US needs the Chinese as much as the Chinese need the US

There's a scene from a John Woo movie--Hard Boiled, maybe--where two characters draw guns on each other, holding the barrels to each other's heads. That's what I think of when I think of the US and China.


Posted by: Populuxe | Link to this comment | 03- 7-08 6:11 PM
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At least the Chinese aren't building simulated black holes. Yet. (I am disappointed that Cambridge's black hole expert P. D. D'Eath does not seem to have been involved.)


Posted by: snarkout | Link to this comment | 03- 7-08 6:11 PM
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Right. It's all fun and games until an artificial black hole swallows someone's planet.


Posted by: Populuxe | Link to this comment | 03- 7-08 6:20 PM
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There's a scene from any John Woo movie

Not that I don't love them, but fixed.


Posted by: Robust McManlyPants | Link to this comment | 03- 7-08 8:59 PM
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15: Argentina just defaulted, suffered, survived. After a while, deals wre struck, 30 cents on the dollar. And we aren't Argentina.

Duly noted. Then again, its $3 trillion in foreign-owned debt we're talking about, about 1/3 of which is held by the Chinese IIRC. That's nothing to scoff at. I'm sure the repercussions would be wholly unpleasant for peoples and governments. But thanks for the background McManus and Moccasin. I feel enlightened.

But what I was getting at is that it is far more in the interest of each government to build a Cold War™ environment rather than a hot one. Government gets their loans, Boeing build their F22s and China gets keep their workers in jobs making sneakers for 50c a pop. Everything else is just bluster.


Posted by: Juicy Lurker | Link to this comment | 03- 7-08 11:19 PM
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Since this is the finance thread, holy shit this is brazen. (via Calculated Risk)

WaMu has revised its bonus plan for nearly 3,000 top executives so continuing damage from the subprime-lending collapse won't crimp their annual awards.

Posted by: gswift | Link to this comment | 03- 7-08 11:48 PM
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Well obviously writedowns can't be used to calculate profit. They'll use them when they calculate the executives loss-driven bonuses.

So, yeah, bye, economy. I was dealing with a potential bond transaction last week, and was reassured that the fact that week-to-week credit-enhanced bond yields were up 2% over recent trends was nothing to be worried about, since it was just some hedge fund dumping its portfolio to make a margin call, thus flooding the market.

Oh, is that all! Okay!


Posted by: Sifu Tweety | Link to this comment | 03- 7-08 11:55 PM
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While I agree that predictions of full-on war with China are ridiculous for all of the reasons mentioned above, a few things remain true:

- Chinese intelligence-gathering completely pwns: FBI and CIA's counterintelligence look like total clowns when it comes to identifying or turning Chinese agents.
- We know they're after various technology areas where the US is far ahead, particularly sensor technology which would help to neutralize the US's huge submarine advantage.
- Tensions are going to be high until the Taiwan issue is resolved.

Pentagon programs designed to counter Chinese military power aren't totally crazy.


Posted by: mrh | Link to this comment | 03- 8-08 5:42 AM
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Tensions are going to be high until the Taiwan issue is resolved.

Good point. China doesn't have global military ambitions, but they do have regional military ambitions, and to the extent that we want to control the entire world, including Asia, there is a conflict.


Posted by: rob helpy-chalk | Link to this comment | 03- 8-08 6:52 AM
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Coming in late again, but I find the Chinese model threatening. The Chinese government is not militarily aggressive, not at the moment anyway, but on things like civil liberties, government transparency, and public participation in government they're what Scalia dreams of. They're trying to escape the Communist model in favor of the Singapore model, which is technocratic economic liberalism without democracy -- government-controlled labor unions, a one-party state, government intrusion in all areas of life, and pro-business policies (though not a deregulationist free-market utopia at all).

Since the US is also moving in this direction, perhaps it's not for America to complain -- the Singapore model is very appealing to America's dominant groups. Democratic and egalitarian models are on the defensive everywhere, and the Singapore model is extremely tempting.

Free-marketers like Brad DeLong pooh-pooh the very possibility of a Chinese threat anywhere, ever, but as far as I know their opinions are based on nothing but the economists' dream. DeLong actually thinks that the wealthy Chinese of the future will be grateful to us for free trade. and, for that reason, treat us nicely. As far as I know gratitude is unknown among nations.


Posted by: John Emerson | Link to this comment | 03- 8-08 7:22 AM
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And no one seems to believe that the Chinese might not sometime prioritize political-military goals over economic goals.

And it seems to assume that every single thing the Chinese could do that might harm the U.S. would also harm China as much or more. Even if almost all of them do, perhaps the Chinese are waiting for one of the exceptions, at which time they'll make a plausible threat and the US will give them whatever specific thing that want (not world domination, just some medium-sized concession).

From the way I see it, Tibet and Taiwan are doomed. I have no doubt that Taiwan will be worse off under Chinese rule. I can see China absorbing N. Korea with American consent (N. Korea is crazy! and nuclear!)

Corporate America might very well prefer the Chiense model too. Almost every American corporation has been completely cooperative with the Chinese government, e.g. on censoring the internet.


Posted by: John Emerson | Link to this comment | 03- 8-08 7:30 AM
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they do have regional military ambitions
scary, i remember those anti-japanese demonstrations in 200?, forgot, were really really scary big and power displaying


Posted by: read | Link to this comment | 03- 8-08 7:31 AM
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Tibet and Taiwan are doomed
what about us? Russians they even are scared about their Far East
our hope is the UN of course and Russia and the US, Japan and EU
just the US sets so dangerous precedents invading other countries, so if China will say they pursue their national interests and invade us, it would be no surprise at all!
though then we will turn all! into suicide bombers and China knows it, so no real worries :)


Posted by: read | Link to this comment | 03- 8-08 7:41 AM
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My Chinese teacher in Taiwan denied that there was any such nation as "Mongolia". "Mongolia" was lost Chinese territory. And China has economic domination over E. Siberia and the C. Asian Republics now too, and there are jumerous Island claims from north of Japan almost down to Indonesia. (I don't believe that they have active claims in Burma, Vietnam, or India, but what do I know?)

Possibly Chinese regional dominance has to be accepted on realist grounds. What bothers me is when I suspect that some influential Americans actually prefer the Chinese unitary-executive model, and when people claim that ideas like "domination" and "hegemony" are completely irrelevant in the Freemarket Aquarian Age.


Posted by: John Emerson | Link to this comment | 03- 8-08 7:52 AM
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J-Eme, have you seen this?

It looks like there is a small claim over part of Burma, as well as even smaller claims over part of India, Pakistan, Afghanistan, and Bhutan.


Posted by: Cryptic Ned | Link to this comment | 03- 8-08 7:56 AM
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the EU
yeah, always had to fight with the Taiwanese i met
over their maps
my argument was do you won't your independence or not
if you do, shouldn't you be against the Chinese expansions? so shut up and try to win our vote in the UN backing up your membership something


Posted by: read | Link to this comment | 03- 8-08 7:59 AM
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I should say that the Taiwan ROC claims on that map are fossils from the 1920s or so, as the map explains. Many or most have been settled by the PRC. But I doubt that it is difficult to re-open once-settled claims if the relaities on the ground are right.


Posted by: John Emerson | Link to this comment | 03- 8-08 8:01 AM
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Read, the Taiwan Independence (Taidu) people probably would recognize Mongolian independence, but the Kuomintang people still claim China and all its original territory. The KMT claim to mainland China is no less ridiculous than their claim to Mongolia or areas of Burma, etc., so there's no reasons to renounce any of them.

But if Taidu recognizes Mongolia when they're in power in Taiwan, the PRC will regard that as an act of war, since Taiwan will be claiming independence that way.

Poth the KMT and the PRC hold to a one-China policy, with Taiwan a Chinese province, and the PRC apparently can tolerate a second contending one-China government. But a breakaway province declaring independence would make them VERY VERY ANGRY.

Sounds crazy to me too, but I'm not a diplomat.


Posted by: John Emerson | Link to this comment | 03- 8-08 8:08 AM
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My understanding is that the PRC considers the extensive ROC claims less provocative (because implausible) than a more realistic map which just shows the island's independence.


Posted by: ixnaythemetier | Link to this comment | 03- 8-08 8:10 AM
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oops, pwned


Posted by: ixnaythemetier | Link to this comment | 03- 8-08 8:12 AM
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Taiwan being the Chinese province i can understand and even accept, but us being part of China is groundless, we sworn to alliance to the Manchus, thanks of course to our Southern Mongolian brothers, not Chinese, and immediately declared our independence when Chin fell
Tibet is invaded and it was not the part of even Chin
the part of Yuan, yes


Posted by: read | Link to this comment | 03- 8-08 8:19 AM
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When I saw that the link was to Strange Maps, I assumed that it was to this one of the sphere of influence of a greater China. From the comments it appears that it was from Zbigniew Brezinkski's 1997 book, The Grand Chessboard. So it probably only represents his conceptualization (although it plays into the neocon "must confront China" fantasies of that time period).

I hear from some folks I know who live or have contacts in east Asia that there is growing Chinese economic presence in Siberia itself, but don't know how grounded that is.


Posted by: JP Stormcrow | Link to this comment | 03- 8-08 8:27 AM
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the Qing
JE, have you heard about a mongolian historian Injinashi? we consider him a traitor like Khubilai
he was the first to call China as it is called now 中国
when Mongol means 'True Center'
before it was called by names of Dynasties the Ming or the Qing ircc etc
http://en.wikipedia.org/wiki/Mongolia_during_Qing


Posted by: read | Link to this comment | 03- 8-08 8:28 AM
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I wonder how much of all this Chinese scaremongering will end up looking incredibly ridiculous in a decade or two, just like the fears of Japanese domination of the eighties now look silly.


Posted by: Martin Wisse | Link to this comment | 03- 8-08 10:22 AM
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Martin,

China ain't going to attack nobody and nobody's going to attack China, but that doesn't mean it's unimportant. The "Singapore on a large scale" model that Emerson points out upthread is extremely attractive to a substantial fraction of the Western ruling class, and they'll watch it like a hawk to see if it works out. If it does, we're in trouble. The fact that relatively liberal ideologies may have been needed to kick-start capitalism out of feudalism doesn't mean they still need them now.


Posted by: OneFatEnglishman | Link to this comment | 03- 8-08 10:35 AM
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41: The fact that relatively liberal ideologies may have been needed to kick-start capitalism out of feudalism doesn't mean they still need them now.

Word. I fear that for some of them China will (or already has) become "Capitalism: The Good Parts Version".


Posted by: JP Stormcrow | Link to this comment | 03- 8-08 1:58 PM
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