Tuesday, May 13, 2008

Mark Helprin has an excellent article in today's WSJ about China's combined military/economic strategy

China's military/economic strategy is working brilliantly as detailed by Mark Halperin in today's Wall Street Journal. Here are some selections:

Even as our hearts go out to the Chinese who have perished in the earthquake, we cannot lose sight of the fact that every day China is growing stronger. The rate and nature of its economic expansion, the character and patriotism of its youth, and its military and technical development present the United States with two essential challenges that we have failed to meet, even though they play to our traditional advantages.

The first of these challenges is economic, the second military. They are inextricably bound together, and if we do not attend to both we may eventually discover in a place above us a nation recently so impotent we cannot now convince ourselves to look at the blow it may strike. We may think we have troubles now, but imagine what they will be like were we to face an equal....

Unlike the U.S., which governs itself almost unconsciously, reactively and primarily for the short term, China has plotted a long course, in which with great deliberation it joins economic growth to military power. Thirty years ago, in what may be called the "gift of the Meiji," Deng Xiaoping transformed the Japanese slogan fukoku kyohei (rich country, strong arms) into China's 16-Character Policy: "Combine the military and the civil; combine peace and war; give priority to military products; let the civil support the military."...

As we content ourselves with the fallacy that never again shall we have to fight large, technological opponents, China is transforming its forces into a full-spectrum military capable of major operations and remote power projection. Eventually the twain shall meet. By the same token, our sharp nuclear reductions and China's acquisitions of ballistic-missile submarines and multiple-warhead mobile missiles will eventually come level. The China that has threatened to turn Los Angeles to cinder is arguably more cavalier about nuclear weapons than are we, and may find parity a stimulus to brinkmanship. Who will blink first, a Barack Obama (who even now blinks like Betty Boop) or a Hu Jintao?...

In the past we have been able to outwit both more advanced industrial economies and those floating upon seas of cheap labor – by innovating and automating. Until China's labor costs equal ours, the only way to compete with its manufactures is intensely to mechanize our own. Restriction of trade or waiting for equalization will only impoverish us as we fail to compete in world markets [boldface mine]. The problem is cheap labor. The solution, therefore, is automation. Who speaks about this in the presidential campaign? The candidates prefer, rather, to whine and console....

Mark Helprin understands the problem, but as you can see from the part that I boldfaced, he does not know about Import Certificates. If he did he wouldn't mistakenly argue that "Restriction of trade ... will ... impoverish us as we fail to compete in world markets."

He doesn't understand that the Chinese keep their wages low relative to American wages through their currency manipulations. He doesn't understand that Import Certificates tied to exports would cause the United States to export more, not less, to other markets. They would end the mercantilist practices that are preventing investment in United States manufacturing. Import Certificates would produce precisely the US economic revival that Helprin seeks.

Those, like Helprin, who study the growing military/economic threat from China understand the problem. They just haven't discovered a way to implement the economic component of the solution.

Follow the following link to read Helprin's commentary: http://online.wsj.com/article/SB121063718854786789.html?mod=opinion_main_commentaries


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