After a quarter-century of remarkable growth, China is increasingly viewed as an awakening giant that poses a long-term challenge to the U.S. Its soaring economy, growing appetite for oil and rapid military buildup will have profound effects on the global economy and international relations.
In Washington recently there was something bordering on hysteria over a bid by a largely government owned Chinese firm to buy Unocal. That was followed by a Chinese appliance maker offering to buy Maytag. In the end, China withdrew its offers.But trade experts think Chinese buyers will continue to seek U.S. companies.
Some in Congress and industry also have complained that undervaluation of China’s currency, the yuan, has contributed to the huge U.S. trade deficit. But many economists doubt that China’s recent revalution of the yuan will have much impact on the trade deficit.
Still, China’s impact on the world economy is significant and growing. As The Economist magazine recently noted, “global inflation, interest rates, bond yields, house prices, wages, profits and commodity prices are now being increasingly driven by decisions in China. This could be the most profound economic change in the world for at least half a century.”
And then there’s China’s military buildup. The Pentagon last month released a report on China’s growing military strength. China’s continuing purchases of fighter aircraft, submarines and ballistic missiles – including hundreds of short-range missiles aimed at Taiwan – is shifting the military balance in the region in China’s favor, the report says. It is improving its nuclear arsenal, developing advanced missiles capable of striking India, Russia and “virtually all of the United States.”
While the report said China’s ability to project conventional military power beyond its immediate region remains limited, the report makes clear China is looking beyond Taiwan. To what is unknown. “Questions remain about the basic choices China’s leaders will make as China’s power and influence grow, particularly its military power,” the report says.
China’s stated peaceful intentions appear at odds with its large military investments – according to some estimates, China is spending $90 billion a year, three times more than it claims.
Recent comments by a Chinese general surely didn’t ease the Pentagon’s concerns. Maj. Gen. Zhu Chenghu suggested that China would engage in a nuclear war with the U.S. if it intervenes to defend Taiwan. “The Americans will have to be prepared that hundreds … of (their) cities will be destroyed by the Chinese,” he was quoted as saying. U.S. analysts who know Zhu said his comments likely were made with tacit approval from China’s leaders.
Perhaps it was verbal bombast. Still, it gives America one more thing to think about as it ponders China’s growing role in the world.
