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Old March 24th, 2009, 06:11 PM   #1
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Economical hegemony and China.


Hi, "the next superpower," lots of you guys select China.
And then, I would ask you "why do you think China will be?"

My reason for this is China has more populations.
Economically, "more population," means the companies can sell more products; why does Hyundai sell cars for you guys with cheap price?
The reason for that is Korean population is only 50 millions while U.S. population is 300 millions. This means if Hyundai can sell products in U.S., they can sell 300 millions products while "only 50 millions" in Korea.

Which market Hyundai, Toyota, and other global companies wanna open their branches? It will be definitely in U.S., beating every current market in the World at least in this point.

This gives you an instince of China have greatest advantage because they have 1 billion population. So, for Hyundai, they wanna sell in China, not in U.S.

Here, we should consider American consumers can spend more money, but the difference between Americans and Chinese consumers are now chased by Chinese. And in the future, the difference will be more close between America and China.

That will make huge problems.
The reason why U.S. still holds triple A credibilities from famous credit estimation companies is they reserve their rights to print out U.S. dollars. And U.S. dollars are not used only in U.S., but used everywhere in the world. Even when there is a business deal between Afghanistan and Indian companies, they proceed the deal with U.S. dollars.

So, people in the world need U.S. dollars to make business deals, buy oils, and etc. This is, in other words, the most basic power from U.S. because even though U.S. trade deficit is enough large to be bankrupt countries, they can print out U.S. dollars, and then, say this is the money that people in other countries need.
And with this U.S. dollars, they can develop military tech and employ military weapons.

But, more and more lots of global companies found out Chinese market will replace U.S. market when Chinese consumers have fair degree of consuming powers. That means, the global companies will need to use Chinese currency, not U.S. currency any more because they wanna do business in China, where 1 billion population will buy the global companies' products.

Doing business in China will make more net profits for these global companies, making them move into China from U.S. Then, they do not feel any necessities to use U.S. dollars. And these global companies will not hesitate to move into China for business, following their net profits.

And with this currency superiority, China will be able to fund to develop military tech and employ miliatry system, which are only matter of time once Chinese currency becomes global currency.

These are fundamentally why U.S. policy makers and politicians are seriously worried about. Chinese can develop their military even in this very point, but they are worried that due to this subprime mortage, people in the world may think they should change other currency such as Euro and Yen.

China has already officially argued that "we (people in the world) should change global currency from U.S. dollars to other stable currency such as Euro," while European Union and Japan were silent. E.U. and Japan also want to change global currency into their own currency because that will be good for national interests.

Without economical hegemony, U.S. will not be able to hold military superiorities, too. Reason U.S. military department can pay lots of salary to troops and employ the best weapon systems is people in the world have been buying U.S. treasury bonds or U.S. dollars that are vital units in making business deals.

But, if U.S. dollars are no longer bought by these foreign people, how can they fund for military?

This U.S. dollar superiority as a global currency are now being threatened by China, and that is why. Well, exactly speaking, it is American consumers during 2000s who had bought real estate with greedy expectations, making subprime mortage crisis. And it is not only argued by China, but by lots of the third world countries from Russia, India, and other emerging economy markets along with silent agreements from E.U. and Japan, too.
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Old March 24th, 2009, 06:42 PM   #2

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Re: Economical hegemony and China.


So then does the US get to be a normal country?
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Old March 24th, 2009, 07:48 PM   #3
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Re: Economical hegemony and China.


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So then does the US get to be a normal country?
I don't think so. But it is for sure that U.S. will not hold superpower in the world. Even if China fail to establish their own economical hegemony, which is the worst scenario for Chinese and the best one for Americans, China and U.S. will compete each others, meaning that at least, U.S. will not be able to enjoy the current superpowers in the world.

That is why China is more threat to U.S. economy than Japan in 1990s where Japanese are always putting money into saving accounts; Chinese are willing to spend and consume money rather than just saving their salaries into banks, meaning that there will be tremendous demands for products and this will be a good chance for global companies to make net profits.

I don't know exactly what you mean by "normal country," but if the normal country was meant to be current European Union, that will be right; at least, U.S. still will hold very important economical market, but they will fail to lead the world economy like these days.

And that also means that American workers should spend more time in office with less salaries because without good tech, American companies can not sell products to Chinese markets when competing with Japanese or Korean products.

Till now, or till U.S. dollar is the global currency, when American cars are not sold well as opposed to Japanese cars, lawmakers and policy makers can help American companies to sell more, but if the U.S. dollar is not, that means they have to compete with other countries products in foreign markets, where policy makers and lawmakers in foreign markets won't help American companies.

To sell more, you know, the best way is to put the price cheap, or to develop new technologies that can beat up other competing products. And, to get better tech, they will need to study more, work more, and spend time more in office.
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Old March 24th, 2009, 08:03 PM   #4
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Re: Economical hegemony and China.


Till now, China and U.S. have been mutual benefit relationships; Chinese workers make products with cheap price and sell to U.S. markets with reasonable price, where U.S. consumers do not have to spend lots of money in cheap but necessary products in their daily life.

This is possible as long as Chinese workers do not complain with their low salaries; as you may know, Chinese workers are working in factories for more than 10 hours with only 20 $ in a day.

And there are bunch of supply of these Chinese labors. But, when Chinese workers earn money and wanna get better life standard, they will not work in that salaries in that sweat workplace, meaning that Chinese policy makers also will make new economy agenda; they will now need to spend products to satisfy their own life.

Koreans and Japanese have been through this process, but they fail to establish their economical hegemony because they don't have population at all near to U.S.; Korean only 50 millions, Japan only(?) 120 millions, not all of these two "export-driven markets," have been even half of U.S. populations. But, China has, as you already know, 1.3 billion populations, which is more than four times U.S. population.

So, Chinese economy agenda will be no longer "export-driven policy," but rather "consuming market," which is what U.S. market is.
Then, the economical relationship between China and U.S. will be broken out because U.S. consumers will not be supplied by these Chinese cheap priced products and Chinese also will not wanna sell their products with cheap price like nowadays.

And "consuming market," means that Chinese have fair degree of consuming powers, meaning that Chinese market will attract lots of global companies from U.S.

And, then, Chinese don't have any reason at all to use U.S. dollars in their own "Chinese market," meaning that regardless of whether the global comapnies want or not, the companies will wanna sell their products in Chinese currency.

And then, it is the very same mechanism of how U.S. can lead the world with economical and military powers. The only differnce is, in this time, Chinese will lead the world with the same mechanism.
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Old March 24th, 2009, 08:07 PM   #5

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Re: Economical hegemony and China.


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I don't know exactly what you mean by "normal country,"
I mean if there are some massacres or famines or whatever going on some place, then the US wouldn't get the blame. It would be China's fault then for not putting a stop to it.

But I don't think that's going to happen. The Chinese are too smart for that. It will be a "multi-polar world." They'll insist.
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Old March 24th, 2009, 08:21 PM   #6
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Re: Economical hegemony and China.


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I don't think that's going to happen. The Chinese are too smart for that. It will be a "multi-polar world." They'll insist.
I also hope you're right. And I think assuming there will be no war between U.S. and China, as long as I am alive, this won't happen, but after that, it is likely to happen.

It will take long time for Chinese, but because they will have more economical potential energy (lol. it is not physics), that is likely to happen in the long future.

The only hope that I may rely on is that during the history, Chinese have failed to maintain the unified kingdom or empires more than 200 years in entire China. If China again faces these kind of chaotic situation, this won't happen at all.

And considering the Communists in China unified the entire China was 1948, we can kind of calculate it. China also face lots of separation movements, notably from Tibets as you know. And other regions from Mongol and Xinjiang where lots of Chinese there are Muslims will make problems for Chinese central government.
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Old March 26th, 2009, 04:26 AM   #7

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Re: Economical hegemony and China.


Size of population alone does not make an economic superpower. The USSR is proof of this, and the Tsarist Russian empire before this. The EU could easily be, were it not for the sapping and stupid inability to ignore historical rivalries and self interest. The UK is by far the worst offender. Whole swathes of the population here are anti-Europe thanks to Murdoch's media and a mindset somewhat akin to what you Americans might call "Rednecks", except our version is most likely to be a cosy, well off "Little Englander" who still believes that the UK has some serious clout in the world.

But in a world of seriously diminishing resources, how long can aggressive capitalism/consumerism be the model? How does one procure these resources? Or alternatives? And lets not forget that China's so called Economic Miracle is merely them catching up. They're not doing much that wasn't done 150 years ago in the UK and 70+ years ago in the US. However, unlike our industrial awakenings, China is unlikely to be able to sustain this: meteoric growth tends to fade out just as quickly.

Indeed, Fledse, as the Communist grip weakens, I agree that ethnic groups within China will attempt self government, just as they are doing in the former USSR. Western influence will see to that.

America is failing as an economic model. Like the UK, it has made the serious mistake of believing that consumerism and spending and perpetual inflation via house prices can make a sustainable economy. The average UK and US business is merely a middle man, and it's plain to anyone what it depends on foreign goods. A very vulnerable place to be.

Lucius, do you think that the reason America gets the blame (rightfully or wrongfully) for not doing anything about famines or massacres is because for the last 50+ years, the US has presented itself as the World's Policeman, and also has consistently attempted to dictate socio-political systems in other countries? Personally, I don't think that it is America's job to be the World's Policeman, and I don't think she is capable of it any more than any other country, (all have their own self interests and will attempt to rig things to suit themselves). It's just that when one sets oneself up, everyone expects one to deliver, fairly or not. For my own part, I'm all for self determination and that each country should be in charge of its own destiny, for better or for worse. Expecting America to help out isn't going to help in the long term.

India is rich in resources, has a large population and is increasingly well educated. But it's my belief that the west will find themselves a new "sweat shop" in the Third World. Much of Africa is also rich in resources, and I think that western Governments will attempt to use third world countries to make cheap goods to sell to the west, therefore largely bypassing China. Unless China grabs Africa first, which is already starting to happen.
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Old March 26th, 2009, 04:07 PM   #8

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Re: Economical hegemony and China.


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Lucius, do you think that the reason America gets the blame (rightfully or wrongfully) for not doing anything about famines or massacres is because for the last 50+ years, the US has presented itself as the World's Policeman, and also has consistently attempted to dictate socio-political systems in other countries?
Yeah, probably something like that. For sure, China is not dictating socio-political systems to Mugabe or Bashir.

Back in '72, Henry Kissinger was chatting up Zhou En-lai and asked him what he thought the effect of the French Revolution on the world was. Zhou answered that it was too early to tell. By citing that, I mean that China is in no hurry. The world isn't going anywhere. All they have to do is keep on not dictating socio-political systems to Sudan, Burma, Zimbabwe, even Taiwan. Sun-tzu said that every battle is won or lost before it is ever fought. That's where they want to place themselves - might makes might.

The danger, as we in the West well know, is the nationalism thing. It kinda has a mind of it's own.
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Old March 26th, 2009, 05:16 PM   #9

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Re: Economical hegemony and China.


I guess that whether they dictate socio-economic models or not, as you say, China is become increasingly harder to ignore, and governments are- and will be- forced to take China into account. As you say, they're in no hurry, it's all going their way slowly but surely. You never know, they may make a better job of it than us.

British nationalism is amazingly stupid. We've got 4 nations within the British Isles, and 3 of them are fiercely anti- the fourth nation, and slowly but surely, the fourth (England) is becoming as bad. What hope co-operation with France or Germany if the Brits can't even agree amongst themselves, and let the past stay where it belongs?

Maybe you can enlighten me, but I perceive that America doesn't really have a definite North-South split, politically, but rather wealthy states versus poor ones, liberal (in the free market sense) versus politically conservative. For example, California, being wealthy, is akin to New York politically. How true is that, or am I mistaken completely?
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Old March 26th, 2009, 06:21 PM   #10

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Re: Economical hegemony and China.


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Maybe you can enlighten me, but I perceive that America doesn't really have a definite North-South split, politically, but rather wealthy states versus poor ones, liberal (in the free market sense) versus politically conservative. For example, California, being wealthy, is akin to New York politically. How true is that, or am I mistaken completely?
I'd say it's more of an urban/rural split. The red counties are majority R, the blue, D(this is from the 2008 election). The non-urban D counties are more liberal for, uh, historical reasons.

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