Tuesday, October 11, 2005

Is this the beginning of the Chinese century?

The Chinese orbit another couple of men in their revamped Soyuz capsule (it's a bit bigger and roomier than Soyuz, but uses Soyuz technology). Wal-Mart might as well be called "China-Mart", given that everything in the place is made in China. American icon IBM's computers are made in China, as was the HP Pavilion DV4000 laptop that I am typing this on. China's economic growth over the past 15 years has been staggering, and their potential internal market, of over 1 billion people, makes marketeers slobber at the mouth. Is this going to be China's century?

In a word, NO.

The basic problem is that workers in most of China labor under conditions of slavery, and slaves do not innovate. Most of China's population still endures 3rd world conditions, with entire families in one-room mud huts with no electricity or running water working the land with hand tools to survive. Entire swaths of China are basically run by local mandarins or landlords who switched their allegience to the Communist Party back when that was the thing to do, but continue to run their area like a personal fiefdom for their own benefit, and who use thugs to beat and intimidate any who would object to their bogus "elections". China's factories are old and delapidated, extremely inefficient, unable to compete with factories in the modern world if they had to compete on an open market rather than being worked with slave labor and subsidized by the national government. The nation's factories, commercial buildings, and homes (those that are electrified) are very fuel-inefficient, because the Communists gave no thought to conservation when they built them -- they're drafty and their furnaces waste most of their heat up the stack. China's innovative middle class in the big cities have gotten lots of press lately, but compared to the size of the middle class in the United States or Europe, it is pitifully small -- maybe a few tens of millions, rather than the hundreds of millions in the U.S. and Europe. And bringing those vast hoards of peasants up into the innovative class is not on the agenda for the oligarchs who rule China, because that could threaten their rule.

But most important is limited supplies of one final, crucial component for a modern economy: *OIL*. China does not have sufficient indigenous oil supplies to fuel much more economic growth, even if its inefficient infrastructure were brought up to modern standards. So China is reduced to buying oil on the open market like anybody else. This is why China's currency reserves aren't as outrageously large as you'd expect given their trade imbalance with the United States -- all those dollars are flowing to the Saudis and Iranians in exchange for oil. Furthermore, China does not have a military capable of projecting force. They have no long-range bombers. Their navy is small and, with its emphasis upon shallow-water diesel-electric submarines and destroyers, oriented around coastal defense. They have vast numbers of Vietnam-era fighter jets which are quite sufficient for air defense purposes but which lack the range and armaments to be useful in an offensive capacity, and they only have a few squadrons of modern fighter jets, and no air refueling capacity for them, so said modern fighter jets would only be useful for sinking American aircraft carriers that ventured too close to the Chinese coastline. Their army is large, but lacks logistical capability -- if their army marched more than a day's walk away from their own border, it would literally starve to death, because they lack sufficient trucks and ammunition transport capability to keep it alive away from China's rail infrastructure. It is an army that was designed to defend China against American attack, and it could do that quite well, but more than that would be beyond it.

So as oil becomes scarcer and scarcer, the fact that China can't send military troops to seize it will become more and more important. The United States has entire divisions of troops camped in the prime oil-producing regions of the world. Those troops can, and will, be used to intimidate local oil barons to sell to the United States rather than to China if China becomes uppity. Unless China develops force projection capabilities to match their growing economic capabilities, it is impossible for them to rule the 21st century the way that the U.S. ruled the 20th century or Britain ruled the 19th century. And without a large innovative middle class, they simply lack the intellectual capital to develop such force projection capabilities -- China cannot at present build even a 1950's-era B-52 bomber, much less a B-1 or B-2, and cannot at present build even an oil-fired aircraft carrier, much less a nuclear powered supercarrier.

So while China will continue to be a regional worry, the notion of the 21st century being "the Chinese century" are misguided. Nonwithstanding their creaky and sure-to-explode political system, reality is that declining resources probably insure that there will never again be someone else's "century". There simply is not enough oil and other resources left in the world for something like that to happen again.

- Badtux the Analytical Penguin


  1. Just like the Soviets were not the threat people thought they were, their parisitic type of government ate away at any type of ability to generate enough economic power to sustain itself.

    Somne of China sees this and they are tryig to move, although slowly, to a more capitalistic environment; but in doing so the hard line communist will find that they are powerless

  2. Actually, the same might be said of our *own* government at the moment, as you are personally experiencing. I.e., that it has become a parasitic encumberence upon economic activity, actively hindering, rather than helping.

    The difference is that we have 200 years of inertia keeping the whole thing from collapsing of its own weight -- for the moment. But it WILL collapse, eventually, much as the Roman Empire finally collapsed when the barbarians probed at the borders of the Empire, discovered that the vaunted Roman legions had detiorated until they were just paper tigers... and romped through the Empire at will, looting and plundering and destroying it all.

    - Badtux the History Penguin

  3. And I personally think we will collapse sooner rather than later. The fact that China holds so much of our debt cannot be good for us. The fact that our educational system, once the world's finest is not only in the crapper, it's being overrun by fanatical nutjobs who want to teach ID alongside evolution - (let the kids decide???? wtf is that??) - can only erode our biggest asset: our technological prowess.

    Remember, the US retooled our industrial base in less than 5 years because of WWII. China now has the monetary resources to do that, and US industry is in the act of doing it for them.

    I personally think that we are in deep doo doo, and cannot smell the guck sticking to our knees!


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