Thursday, April 26, 2012

Analysis: Chinese Strategies Are Destined to Render the US a Once World Power

In 2001, trade Chinese trade with Latin America totaled a mere US$10 billion.  A pittance when examined in global terms.

Unfortunately, 2001 was also the year that the US became deeply entrenched in two of the longest wars in its history-- Iraq and Afghanistan. Today, a third, undeclared war is quickly bubbling in Iran, where the US is hoping that "playing nice" with Tehran will prevent the rogue country from acquiring a nuclear capability. 

Such a strategy is only destined to fail until the world wakes up and Iran is already nuclear, at which point the US will rightly or wrongly be drawn into a fighting war with Iran.

Now, here's the interesting part: In 2001 Chinese trade with the US' and Canada's massive neighbor totaled only US$10 billion. In 2011, ten short years later, Chinese trade with Latin America, also half-a-world away, amounted to US$241.5 billion. Imagine!

COMMENT: Strategically speaking, we can discern from the facts that China has made long-term planning a near art-form. While the US federal budget has a three-year planning cycle, Chinese leaders look ahead as far as ten, twenty and thirty YEARS. That's why they are so successful and that's why China's strategy is to have trade deficits tipped in their favor with whomever they trade with.

Let's look at some facts that come from the Office of the US Trade Representative: In 2011, the US exported US$19.2 billion in goods and services while the US imported US$102.3 billion goods and services from China. Now, fast forward to 2011: Last year the US exported US$103.9 to China, but the US imported US$400 billion in goods and services from China! So much for equitable trade.

Unfortunately, for the US, Washington permitted itself to be outmaneuvered by the Chinese when the US permitted itself to borrow an insane amount of money from China to pay for the wars in Iraq and Afghanistan. 

Now, with the national deficit out of control,  thanks in part to US presidents who could not do for the federal government what consumer do every day--balance their checkbook--Washington is essentially broke and does not have the resources to compete with China's carnivorous appetite to buy up the world.

To make matters worse, China has for years stolen intellectual property from US companies, and continues to do so. This occurs because the US is too trusting and because so many American companies are reckless in their inability to counter economic espionage.

Unless Washington begins to do things very differently, and quickly, the US is destined to lose the influence and reputation it once had. Sad.

Oh yes, I almost forgot to mention, acknowledged or not, the US is also engaged in another Cold War with Russia, the latter of which takes actions every day that are clearly not in the interest of world peace. 

Remember President Obama's "hot-mike" slip of the tongue while engaged in a sidebar with Russian President Dmitry Medvedev in March 2012, whereby the US president told Medvedev to tell Vladimir Putin, Russia's new president, that things will be better for Russia during Obama's second term?

Not knowing exactly what the context of the conversation between Presidents Obama and Medvedev were can only be described as disconcerting. What message was the US president communicating to Russian leaders that is not sharable with anyone else? 

Unfortunately, President Obama has made no statement clarifying what he said to Medvedev, despite his promise in 2008 to have one of the most transparent US presidencies in history.