The role of the Economy in national confrontations

Cheng

New Member
Re: PLAN Aircraft Carrier programme..News & Views

China does NOT have a larger economy then the US. US economy is twice as large as china's on nominal terms, and 30% larger than china's on purchasing power parity terms.

If Chinese growth rate does not falter, it will take china until 2022 to equal the US economy in PPP terms.

The way things are going, the United States in the future will be able to add the economy and geographic assets such as air bases of Japan to its own economy and bases in supporting power projection against china. It would take Chinese at least till late 2020s, provided it continue to maintain 7.5% growth rate beyond 2020, which seem doubtful, to match total economy of US Japan block.

You need to argue with the Lead Economist from the World Bank in Washington DC, as he says the Chinese economy is now larger than the US economy, and he is publishing the revised PPP figures this month.

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B.I.B.

Captain
Re: economy's role in long wars

The US is not willing to give up LA for Taiwan... We are willing to negotiate for Detroit and Chicago however.

As we are allied to the U.S. I suppose we should be prepared to carry our share of sacrifice. Therefore I nominate THE BEEHIVE. (for those that don't know the beehive houses our parliament and M.P. offices.
 

Cheng

New Member
I'm just going to list a few key points for you to consider:

China already has a larger economy than the USA, but it means that the average Chinese person is only one quarter as "rich" as the average American.

Therefore China is still a developing country which is still in the middle of its *fast* growth period - like Japan in the 1960s/1970s.

It will probably be another 4 years to add a Japan-sized economy.

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In terms of military influence, because military programmes have 30+ year development and production times, it does take a long time for military spending to result in advanced equipment.

Yet we already see the US Admiral in charge of US Pacific Command saying the following:

In East Asia today, Locklear said, “we’re not the biggest guy on the block, we’re just not, and we’ve to come to grips with it. Doesn’t mean we’re not a big guy, but we’re not the biggest….so how do we look for those asymmetric advantages that allow us to continue to protect US interests?”

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Even if the Chinese economy were to crash and stagnate today, it's current modest level of military spending will still result in double the stock of advanced weaponry over the next 10years.

This also doesn't take into account how military technology is increasingly based on frequent refreshes with the latest electronics and updated software.

This is an area where the development/production timescales are much shorter, and is an area where China has broadly caught up to world standards.


Matching one's economy is one thing. Matching one's total military power is another. Matching one's projected military power in a selected geographical area is yet another. And on top of that one should really add total influence or political power, which is a different variable altogether.

*IF* both sides keep on going at some predictable pace, interpolated from the history of other countries in similar positions and from the history of China/US own growth in the last 20 or so years...

China might match US economy sometime in 2030-2035 period.

Matching total military power is much more harder, as that involves catching up decades of US investments in quantitative and qualitative lead. It really might take a whole generation of lifetime of military systems, say some 30-ish years or so. So i would expect China to match that sometime in the 2060-2070 period.

Matching local projected military power is different. Farther one is from home, the harder it gets. People most often neglect the logistical drawbacks power projection requires half way around the world. China may not project its power near US shores for another 100 years or so. Likewise, projecting US power, even with existing bases near China, is very demanding. When it comes to projecting power around some mid point between first and second island chains, I would expect China to match US sometime after 2030 perhaps by 2040. It's hard to tell, this one. (yes, that does mean that matching projected power just to the first island chain might not take very long anymore. It might happen in as little as a decade from now)

Overall political influence is much, much harder to achieve than any of this.

We have the example of USA versus UK. USA matched UK's nominal GDP back in 1880. By the start of ww1 it doubled its lead over UK's GDP. Some might argue USA still wasn't premier political power in the world, that it didn't achieve that title until start of ww2. That was 60 years after passing UK's GDP and at that point US had three times as large GDP as UK.

Even so, China's climb might be harder and slower than that as there are alleviating circumstances that US enjoyed back then. Cultural influence was more easely achieved as A) they used the same language and similar culture as the power they replaced in the World. B) Mass media and globalization didn't really exist in time period when UK ruled the World. USA was basically the first power that embraced those as a tool to spread its cultural influence. So it has a decent century long lead over China in that regard.

Further helping facts that US enjoyed and China might not is the fact US increased the usage of its territory and its population very quickly. Its population grew 260% from 1880 to 1940. UK's population grew some 90% in the same period. Now, as we know, simply increasing population can be counterproductive. It's exactly what drew down India and even China, before one child policy. One first needs to achieve a certain level of wealth and productivity per capita and be able to maintain it with added population. UK and US managed that a century ago. But simply adding poor population which will require more of the State than it will give back to the State is not productive. UK to an extent, but especially USA, also had natural resources and free territory inside their borders to utilize that extra potential from the extra population.

China on the other hand seems content to stick to its current population levels and first will want to bring the large portion of its population to some standard that's closer to current western world levels. All that is very tricky stuff to predict, but its decades of work.

Altogether, all these issues make me personally believe China won't really match overall influence in the world before 2100, in the best case (where its economy keeps growing as it is) and perhaps it will take as long as 2150, (if its economy keeps decelerating, as it would appear all economies do at some stage)

I would think it's safe to say no one here at this forum will be alive to see the day China overtakes US. It's a natural process and as with all such processes, it takes time.

And none of this takes into account possible earthshattering developments. Revolutions, plagues, world wars, asteroid strikes or whatever, which may or may not sway US and/or China's power in any direction and at any pace.

All this is just personal opinion of one single person, please don't take it too seriously and start a crusade against my writings.
 

Kvitoya

Banned Idiot
Re: economy's role in long wars

In a long war, three thing will determine the outcome:

1. Access to raw material to support the war economy. - you assume china will do okay, I disagree, but I will accept your view on this for sake of argument.

2. Sufficient production capacity in the war economy. - you assume china has it. I think while china may have an over abundance of many essentially productive capacity, it would find a shortage in some essential high tech manufacturing capacities relative to the US. But I will also take you side on this issue for sake of argument.

3. Existence of R&D depth, experience and skill in the economy that can be converted in wartime to keeping pace with military technological advancements in military and related technologies on the enemy side. - you didn't address this. I think here china will fall far short of the US.

Once a relatively thorough embargo by the west comes into force, the reality would be the vast majority of the world's most skilled, experiences, sophisticated technological R&D resources convertable to military use will be in the US, Europe and Japan, and will be on the American side. Even Russia's resources and abilities in this area will be very thin compare to what would be available to the US. If a war was to last a number of years, say 5, it would entail 5 year of technological, commercial and diplomatic isolation while the US side applies it much greater R&D depth, experience and resources to bear to race ahead of China. china will simply be overwhelmed by faster rate of progress of elite military technological development on the US side. The longer the war, the more pronounced would be this advantage on American side can build up.

Eventhough china appears to have endurance, and I think Mao's theory of "protracted war" encourages people to think long war is what Chinese is good at, I think the reality today is China's chance in a war against the US, such as they are, are better in a short sharp war than in a long drawn out war. If China can't pervail in a short, sharp war, China will be ground down and defeated technologically. So despite the fact China's overall war fighting ability today might appear to be substantial, China in fact faces the same dilemma as Japan on the eve of WWII.

An interesting thread. My view is that China is more dependent on the West than vice versa. This is because China is still behind the West, by many decades in some areas, and needs Western technology and ideas more than the West needs $2 spaghetti tongs. It is pointless to bring up who owes what to whom in monetary terms because that debt is straight out the window in a major power conflict.

Any conflict as that proposed by the OP would quickly become about access to resources. This is why China is expanding its blue water navy so fast and developing its "string of pearls" ports in the Indian Ocean, and making such outrageous claims over the SCS, plus of course its three island chain military doctrine which is aimed at ending the US as a Pacific power. The US counters string of pearls by proposing a carrier group be parked in Perth, Western Australia. Beijing wants to secure sea lane access to ME oil, which is why it is so obsessed with the SCS and string of pearls. This is its immediate focus. After that it can toy with the concept of expanding as a Pacific power via the Three Island Chain doctrine.

One object of concern is that in WWII the US and UK were able to convert the factories in their massive industrial base to turning out military materiel and ordnance, but today in 2013 these two countries manufacture much less and and their industrial base is greatly diminished, whereas China is pretty much nothing but factories.
 

Scyth

Junior Member
Re: economy's role in long wars

An interesting thread. My view is that China is more dependent on the West than vice versa. This is because China is still behind the West, by many decades in some areas, and needs Western technology and ideas more than the West needs $2 spaghetti tongs. It is pointless to bring up who owes what to whom in monetary terms because that debt is straight out the window in a major power conflict.

Any conflict as that proposed by the OP would quickly become about access to resources. This is why China is expanding its blue water navy so fast and developing its "string of pearls" ports in the Indian Ocean, and making such outrageous claims over the SCS, plus of course its three island chain military doctrine which is aimed at ending the US as a Pacific power. The US counters string of pearls by proposing a carrier group be parked in Perth, Western Australia. Beijing wants to secure sea lane access to ME oil, which is why it is so obsessed with the SCS and string of pearls. This is its immediate focus. After that it can toy with the concept of expanding as a Pacific power via the Three Island Chain doctrine.

One object of concern is that in WWII the US and UK were able to convert the factories in their massive industrial base to turning out military materiel and ordnance, but today in 2013 these two countries manufacture much less and and their industrial base is greatly diminished, whereas China is pretty much nothing but factories.

In this global economy, the economic powers the EU and the US also depend on China as an export market for both high tech products and service delivery instead of China as a cheap labor pool for producing low tech products. The time that China was the place to be for low cost manufacturing are almost over. Low tech products like clothes are increasingly manufactured in other low-wage countries. Some high tech products may still be manufactured for a while in China, but that too will decrease as wages go up. China is slowly becoming a consumption economy that'll start to create and produce high tech solutions like other developed western countries.

Everytime when some economic numbers of the EU are published, the export to China is always taken into account as a variable. Saying that China is only good for producing low tech cheap products is simply not true. Although militarywise China is lagging in some areas, I wouldn't say that it is "decades" in such that it'll take decades for China to overcome. The Chinese have an incredible knowledge gathering competency.

Furthermore, saying that monetary debts will go out the window as soon as a major conflict starts may be true on the short term, but will have devastating consequences on the long term. Who'll lend you money if you can't be trusted? So the aftermath of such a conflict will be also devastating for any economic power that refuses to pay their debts.
 

Kurt

Junior Member
The Chinese have an incredible knowledge gathering competency.

That is the very root of a conflict. Disrespect for intellectual property, stealing know-how for copycat products instead of fair joint ventures and own investment into development. Via this knowledge gathering competency Chinese are digging themselves into a very deep hole in terms of diplomatic relations with developed countries. This gathering works counter to their own scientific development, prolonging the period during which the West can achieve more by their research investments than the Chinese.

Concerning the size and capabilities of an economy, disposeable income matters for the ability to invest. China has more population that all have their monetary needs. To achieve disposeable income parity with the United States, China must overtake them by a wide margin (several times) in total economic numbers.
 
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Scyth

Junior Member
That is the very root of a conflict. Disrespect for intellectual property, stealing know-how for copycat products instead of fair joint ventures and own investment into development.
A very prejudiced and biased view. There are enough joint-ventures in China (some by law, but still).

Via this knowledge gathering competency Chinese are digging themselves into a very deep hole in terms of diplomatic relations with developed countries.
There are still enough countries willing to do business with China, so this hole, if any, can't be that deep.

This gathering works counter to their own scientific development, prolonging the period during which the West can achieve more by their research investments than the Chinese.
A very pessimistic view. China has already demonstrated that they not just "copy", but also improve on it. See the j-20 side weapons bay for example.
 

Kvitoya

Banned Idiot
Re: economy's role in long wars

Saying that China is only good for producing low tech cheap products is simply not true.

I'll clarify by saying that what has made China what it is, up to the present day, are the $2 spaghetti tongs, but this of course is changing and in a certain time period China will move from this, but this in itself will bring CPC enormous internal problems to manage like a widening wealth gap, and a greater demand for freedom from the people.

Although militarywise China is lagging in some areas, I wouldn't say that it is "decades" in such that it'll take decades for China to overcome. The Chinese have an incredible knowledge gathering competency.

We can't really know how far behind it is because we don't know where the US is in terms of development due to classified projects. We know the Chinese operate a massive espionage programme within the US (and vice versa, of course), but the Chinese have more to gain from this, obviously.

Furthermore, saying that monetary debts will go out the window as soon as a major conflict starts may be true on the short term, but will have devastating consequences on the long term. Who'll lend you money if you can't be trusted? So the aftermath of such a conflict will be also devastating for any economic power that refuses to pay their debts.

Who will lend money? This goes to the core of the issue - the role of central banks and the function of debt in our economies. We can be sure only that any conflict will affect the economies of all parties, but of course the loser will be affected the most. I'm not sure what form a conflict between China and the US would take, so it's difficult for me predict economic outcomes. I have always worked on the assumption a conflict between them would actually be rather limited to asserting dominance over the specific region in question, and the national economies of both nations relatively unharmed, as opposed to a major conflict.
 

Scyth

Junior Member
Re: economy's role in long wars

I'll clarify by saying that what has made China what it is, up to the present day, are the $2 spaghetti tongs, but this of course is changing and in a certain time period China will move from this, but this in itself will bring CPC enormous internal problems to manage like a widening wealth gap, and a greater demand for freedom from the people.
The wealth gap also exists in the US so that does not necessarily mean it'll lead to massive problems. Demand for freedom will only play a big role if the economy collapses. If everyone got enough money, people keep their mouth shut. That has been the way in all nations, communist or not. If the economy collapses little is needed to overthrow a government.

We can't really know how far behind it is because we don't know where the US is in terms of development due to classified projects.
Which is also why I said that you can't be sure that it'll take "decades" for China to overcome.

We know the Chinese operate a massive espionage programme within the US (and vice versa, of course), but the Chinese have more to gain from this, obviously.
That'll depend what/how you're comparing. What is "more" and how "obvious" is that?

Who will lend money? This goes to the core of the issue - the role of central banks and the function of debt in our economies. We can be sure only that any conflict will affect the economies of all parties, but of course the loser will be affected the most. I'm not sure what form a conflict between China and the US would take, so it's difficult for me predict economic outcomes. I have always worked on the assumption a conflict between them would actually be rather limited to asserting dominance over the specific region in question, and the national economies of both nations relatively unharmed, as opposed to a major conflict.
Well, given that economy professors, professional bankers etc. etc. all didn't forecast the recessions that took place time and time again, let's say that the economy is one of those things that can't be predicted. Although I personally expect that a war, limited or not, between economic powers will lead to significant damage.
 

chuck731

Banned Idiot
When push really comes to shove, and two nation devote majority of their disposible national resource to defeating each other, and neither will settle for a negotiated outcome that does not address the reason for which it went to war in the first place, then 3-5 years of difference in an broad array of key technology will likely clearly determine who the winner, and who the loser will be.
 
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