No Need for Pacific Arms Race
If China Hires US as its Top Cop
by Dan Ehrlich

China, it seems, has hopes of eventually pushing America out of Asia and securing for itself what the Japanese had tried to do before and during WW2…the creation a so called Co-Prosperity Sphere. Yet, in doing so, China is missing a golden opportunity as the emerging preeminent economic power.

Rather than China engaging in a costly arms race with America, why not simply put the US on its payroll doing what the US seems to love…being the world’s policeman. Because with a $14 trillion national debt America can’t support a global military force as it did during the Reagan Administration. It needs financial help.

No sooner had America won its arms race with the Soviet Union, a race that resulted in USSR’s collapse, it found itself being sucked into the global market whirlpool underpinned by China’s burgeoning industry and massive low wage population.

But even more destructive in the short term has been the USA’s seemingly endless military adventures that have drained its coffers dry. The last thing the nation needs is another arms race and an East-West standoff in the China Sea.

The main fact of economic life today was expressed dramatically in the 1976 film Network; “The world is a business…one vast and ecumenical holding company.” And its doesn’t do any parts of this company any good by in-fighting with each other. It costs lots of money any way you look at it.

However, China, flush with money, has been on a spending spree at a time that the debt-ridden U.S. government is looking to cut defense costs. This reality has Congress debating whether the US can maintain its decades-long military predominance in the economically crucial Asia-Pacific.

China is still decades away from building a military as strong as the United States. And remember, China doesn’t want to attack America…it’s main commercial client. But, it would like America to clear out of its backyard. This was what Japan wanted prior to WW2. And this is why a number of Asian countries, including Japan and even Vietnam, are counting on a continued US presence in the China Sea.

"As China's military has gotten more capable and China has behaved more aggressively, a number of countries are looking at the U.S. as a hedge to make sure they can maintain independence, security and stability," said Abraham Denmark, director of the Asia-Pacific Security Program at the Center for a New American Security.

Since the end of WW2 that’s what we have been doing. But, thanks to the GW Bush Administration and continued big spending from Obama, America has become the world’s biggest debtor nation. Of the $14 trillion we owe, China, alone, holds more than $1 trillion of our money and securities in its banks. It’s only a matter of time until the US credit rating is lowered and living standards will decline far more than they already have in some areas of the country.

It comes down to this China wants an economically sound America which will always be able to buy all the stuff it makes, at least until China develops its own domestic market, which will bring with it dreaded the specter of capitalism. On the other hand, China depends on America for agricultural products.

America, however, is no longer the economic giant it once was. Yet it still postures as the world’s lone superpower. But this front is now seemingly too big to keep up indefinitely. It needs to do a deal…its needs a patron. For generations the US has been giving billions in aid other nations. Now it  needs financial help…something American politicians are either too proud or too stupid to admit.

Today the US pacific fleet has the main missions of keeping tabs on North Korea and shielding Taiwan from Chinese attack. If these two concerns can be dealt with through negotiations between board members of the World Corp., the US would no longer have a need to maintain such a huge Asian presence. And China would not need to spend its trillions on a navy to challenge America.

It could give the US a subsidy to operate in the region as seagoing marshals, preventing brushfire flare-ups, allowing China to spend more money on its own industry and food production. And America would be able to follow suit, cutting defense spending so it can maintain living standards, which in any case, will have to come down as will average wages. America can’t compete in a global market as a high wage nation.

This could very well be the shape of the brave new world…one where major wars would be unthinkable because they would affect everyone in World Corp. PLC and be terrible for business.

As I wrote in a piece three-years-ago (read The Regression in this blog), we are in an uncharted time in history, where former subject nations are working with their former masters in a symbiotic relationship supporting each other. The developed world and the developing world are now in the same economic bed, even though its occupants may be insomniacs from nationalistic worry. It’s a relationship that’s a liberal’s dream, where money is going to developing nations as the wealthy nation states break down into regional political blocks flush with new ethnic diversity from Third World immigration.

This may seem like a far-out concept, having China bankroll the US military. But, what do you think has been happening to the billions they have already given the US as debt guarantees?

In this brave new world nations and their regional zones may have certain duties that they are good at performing. America, being an advanced yet rather uncivilized nation (32,000 gun deaths a year) will be seen as best suited for the town cop job. However, the US has long been the bread basket for much of the world.This, and rising food costs, will keep the US as China's "most favored nation."

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