Manufacturing is crucial for war for two reasons. China is the leading manufacturing power of the world today. That meant the UK until around 1900 and the U.S. The dominant military power of each modern period has been the dominant manufacturing power. History says that military power cannot be separated from real economic power. China may emerge as a dominant military power. Notably, the ability of the West to influence the third-world, has substantially declined because of the willingness of China to provide political and economic support without the strings demanded by Europe and the U.S.A.Īn NYT op-ed writer is already denouncing India’s new prime minister Modi for showing an interest in how things are done in China.Ĥ. Basically, the western political and economic model will lose credibility in favor of China’s. Given that China is a one-party state with a mixed economy, this will pain all sorts of folks on the left (and the right). At some point, China may become a political model for countries around the world. And how much am I supposed to be tipping these days?ģ. Tangentially, does it seem like restaurant prices are going through the roof? A Cobb or chef salad at a diner now seems to start at $13.95. Note that many economists already believe that the gains from cheap imports from China, have been more than offset by China’s impact on commodity prices (food and fuel).
in world trade and China’s growth tends to impoverish the U.S. Basically, China is a direct competitor to the U.S. is a net importer of commodities (by far) and an exporter of manufactured goods this is bad for U.S. China’s incessant demand for commodities drives global commodity prices up, and China’s exports drive the prices for manufactured goods down. Note that even in the 19th century, economic crises swiftly spread around the world.Ģ. By contrast, the Argentine Great Depression of 2001-2003 was mostly limited to Argentina (Argentina is not a global economic power). The East Asian crash of 1997 was one example. There is plenty of history showing that financial panics typically don’t stop at national borders. The more likely (and powerful) mechanism is that a financial panic starts in China and spreads. Others are from other countries, that in turn buy less from the U.S. How might this work? A recession in China slashes Chinese demand for imports. It will be a huge shock the first time a recession hits the U.S. The Chinese business cycle will become the world’s business cycle (replacing the U.S.). A few notes on the implications of China displacing the United States as the world’s number one country over the course of the 21st Century:ġ.
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