Saturday, December 3, 2016

Can China say No?

In the last decades, Japan and some oil-rich countries could not say “No” to the USA, but China can to some extent and definitely can in 10 years.

Today’s China is not your Daddy’s China

China is not as strong as the US, but the gap has been reduced in the last 30 years, when China could not build a reliable bicycle. Chapter 1 debunks some of the myths on China.

China lacks natural resources that she can obtain from many countries. China can get many high technologies from EU and Russia such as jet planes and agricultural products from many countries including SE Asia and Australia. At the meantime, Chinese are advancing their products. China no longer is export-oriented. Basically it is moving to a developed country with higher-value products. With its huge internal market, Chinese can manufacture products cheaply due to the economy of scale.

China’s rise is primarily due to the USA playing China card against Russia and now the US plays India (and possibly Taiwan) card(s) against China.

Let’s examine some critical factors in this book. A trade war could lead to a military war. In 300 years ago, the alliance of 8 nations forced China to trade. When China refused, they enforced it with battle ships and cannons. When the Brits had nothing to trade, they pushed Opium and killed millions of Chinese. The alliance asked for ‘damages’ that bankrupted China and led to the national humiliation for China. Today the US may use military for not trading with China. How ironic!

What if China withdraws all the debts we owe?

It would lead to the global depression starting in the US. It is too obvious and I go no further. China is one link in the global economy. It will survive without our trades. A full-fledged trade war would hurt us more than China. Our trading competitors are EU countries, not China as we produce similar products such as airplanes. China would be more cautious in lending us money and/or buying US properties/companies. Unlike businesses, creditors have no weight in our political decisions.

Modern warfare

Modern warfare is different from the 60s. We need better cyber security for both the government and the corporations. China has modernized its arm forces via development, acquisition and espionage.

We have enough nuclear weapons to destroy the entire world. N. Korea is not a nuclear threat unless the guy is really crazy and we drive him to the cliff. We do have to replace the 5" floppy disk though – it could be a security protection.

Carriers are a drain of the budget. It will not be useful as in the old days. They are sitting ducks for the carrier missiles... Why we need carriers with dual nuclear generators? In addition, China’s missiles can destroy GPS satellite which our guided missiles depend on. Have we learned from our losses in Vietnam and Afghan? Does Vietnam today threaten us? Did we learn from the French and Russians? It is expensive to send soldiers thousands of miles away.

China produces cheaper military drones, which have been tested in the Middle East. China has mastered stealth technology in their jets and submarines; the technology could be stolen from us. In a word, China’s military might is not that primitive and not that advanced as proposed by our offense vendors who want to sell their weapons.

Even if we bomb all the countries we do not like in the Middle East, we still cannot win without foot soldiers, not to mention human sufferings.

We cannot afford another war

The two wars in Middle East have been draining our resources. We’ve been broke and will become a real paper tiger when it continues for another ten years. Obama’s administration saved the market at the expense of our national debt which is at recent height. Our competitive edge will be reduced by servicing the debt instead of investing on profitable projects such as infra structure. The debts will be paid by our children and grandchildren who do not have a voice today. Are we following the footstep of Greece?

China has not been an aggressor to foreign countries in her entire history. The last conflict is a brief war with Vietnam in 1979. In Roman time, China was as strong as Rome, but they very seldom colonized any country as opposed to the Roman. In around 1420, Zheng He’s fleet was far larger in size and number than Columbus’s and they just wanted the foreign countries to pay annual tributes that they received compensations in return. For the last three centuries, China was the victim of aggressors. It contrasts significantly with Columbus. Actually the two dynasties of the last three were ruled by foreigners before Mao included these ‘barbarians’ as part of the Chinese minorities.


They would be China invading (or reuniting) Taiwan and the islet disputes in South/East China Sea (Chapter 6).

When the economy tanks (Chapter 7 and Chapter 9), the US government would have to redirect our attention to other areas such as blaming China. Today we cannot as many jobs are replaced by lower-wage countries, not China.

Will Chinese wake up and fight against the government?

It is the common thought of the China bashers. Most Chinese will not as most are busy in making money. After they taste the fruit of capitalism, no one is stupid enough to fight against the government and they learn the lesson from Tiananmen Square incident.

Our investment in China

Apple (Chapter 3) is a good example. Can Apple move their manufacturing back to the US to eliminate the 45% (35% now) proposed tariff? How can they find enough rare earth elements for their phones? They are available but most cannot be mined without damaging the environment. Many of these mines outside China are bankrupted. How can they motivate an army of educated workers for a new model with slavery wages and unions? It is easy to collect the generous welfare than working in these monotonous jobs. How to get 40,000 technicians? What is the impact on Apple in losing the Chinese market? One solution is to manufacture the individual parts in China and has the final assembly here in the USA with a label of “Made in USA” even the label is made in China.


·         Taiwan bought a lot of weapons from us including the state-of-the-art fighter jets such as the $1.83 billion of military arms in Dec., 2015. We did not allow Russia to install missiles in Cuba and we clearly know the purpose of these fighter jets. I do not think China is over-sensitive. It provokes them to spend more in defense.
·         The US has been spending too much in defending other countries such as Japan, EU… We have too many problems to fix at home.
·         Trade wars between the countries have been started many times and both sides lose.
·         Most Taiwanese are those who retreated with Chiang after losing the civil war and their children / grandchildren.
·         Taiwan’s economy did not catch up with S. Korea primarily due to spending too much on defense, corruption as in most Democratic countries in Asia (have you heard of T.V. Sung?), mal governance…
·         China is Taiwan’s top trade partner (40% of its export).
·         Taiwanese are educated together with Cuba and Philippines. The difference is Taiwan has better living standard. I can attribute this as the other two do not have enough natural resources as explained in my Coconut Theory.
·         China has never expressed to be #1, but the US always does. That’s why we have the endless wars.
·         The recent Trans-Pacific Partnership tries to exclude China while China has its own partnership open to all. The hidden agenda is using the country’s currency as the reserve currency.
·         The Chinese maritime power is effective to defend its own shore, but not enough to secure the oil route; I estimate about 8% of current foreign oil from this route. With the aircraft carrier, China can invade (or reunite) Taiwan and the ‘lost’ territories in South / East China Sea easier.
·         I believe in “love over war” and also in free trade if both sides play it fairly.
Comparing US and Chinese military. Chinese PLA has shrunk from more than 3 to about 2.3 millions. Per capita China is less than the US.


The above is the title article of my new book "Can China Say No?" If you have any of my books, most likely you do not need it. I do it for fun after hearing Trump's answering the phone call from Taiwan. Besides this article (which has a lot of my ideas as evidenced by my recent blogs here), most articles are copied from my book Global Economies with some rearrangement. It took me less than 2 hours (now another hour to enhance it) to finish the book including submission to with book cover... It could be a record pace to write a 200-page book thanks to "copy and paste" and Amazon's book publishing tools. Here is the Table of Content.


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