http://washingtontimes.com/news/2010/mar/02/chinas-debt-to-us-treasury-more-than-indicated/?page=2
(Just for the record, I am still trying to find a good source on M16 and AK-47 small arms trade and proliferation. You'd think the UN would have more relevant documents!)
This article concerns the fact that the value of securities held by China is probably much higher than official State Department estimates. Part of the problem is that records keeping is inaccurate. However, another problem is that security holdings by other countries may have been funded by Chinese overseas investments, making those security holdings de facto Chinese holdings. Economists are still indecisive, however, as to how much the political and economic leverage this gives China over the United States. China has released several statements saying it intends to use this power to gain control over politically contentious issues, such as its relationship with Taiwan. However, others feel that this cycle of buying up debt makes China dependent on the United States for investments, creating a stable balance of power.
This ties directly into our readings this weekend that discuss the changing perception of debt and how debt is handled. In this article, there was certainly no discussion of the possibility that China would use its ownership of our debt for military purpose. China has made no indication of invading the United States to settle the issue of debt and instead discussed the political, economic and social leverage that they would gain. According to our reading, this is because there has been an evolution of norms, both in what is acceptable when it comes to debt and also, the evolution of who is represented in the international community. Since the rule of law and the right of sovereignty have become so important since the early 20th century and more lawyers are represented in the international community, we see the results in the present day handling of the debt issue. The worst threat China issued was to drop some our securities if it felt that would be politically convenient, not land troops Washington.
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In my mind i see the economic field as being the battlefield of the future(present?) for the superpowers of the world. This means that the US would be at a major disadvantage for future competitions with China in the political arena. At the same time, its important not to underestimate the power of having a economic advantage in the political arena. If and when China surpasses the US in the near future as strongest state in the world, it will be thanks primarily to their economic strength.
ReplyDeleteThe idea of Chinese troops in Washington strikes me as odd. Although China's GDP overall ranks high, its GDP per person still pretty low. I think the reasons for which China will not invade US to collect its money is actually not because of norms. We'd better look at this issue from a realist prospective. It is not possible for China to invade the U.S., for the U.S. is surrounded by the ocean and this location give U.S. a huge military advantage. Besides, there are other reasons for which China will not invade the U.S. For example, Beijing has to calculate the cost of invading US and its influence on its economy.
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