Category: Geopolitics

U.S.-China Relations or Rivalry?

America has simply reached the historical limit of its credit, a limit represented not by the federal debt ceiling, but by the widespread global perception that our best days are behind us absent significant restructuring across our economy and government. By and large, neither U.S. political party wants to hear this, much less act upon it. Instead, we Americans either assume that our next “exceptional” rebound will unfold naturally or believe that it can somehow be achieved by sabotaging China’s rise. Our truly unimaginative political leaders in both parties reach for both straws simultaneously, a combination of hubris and fear that is both odd and depressing.

Any expert familiar with China’s current situation recognizes its precariousness: a vast nation of more than 1 billion souls, with more than half of them still living in incredible poverty, attempting to shift — simultaneously! — from extensive to intensive growth and from centralized political authority to something necessarily more federalized and democratized. Amid these combined evolutions, the Chinese Communist Party is most definitely doomed, and it knows it. Already, senior party officials, especially those in retirement, admit this looming reality.

We can only hope that the world will play the Sino-American rivalry more intelligently that either of its combatants do, until generational change on both sides eventually works its political magic. Continue reading “U.S.-China Relations or Rivalry?”

After a 1000 Years – The Arab Spring

The Arab world’s so-called “democracy deficit” is not tied to the Islamic religion but rather to the Arab world’s history and the institutions introduced following conquest by Arab armies over 1000 years ago, according to a new paper presented today at the Spring 2012 Conference on the Brookings Papers on Economic Activity BPEA. Continue reading “After a 1000 Years – The Arab Spring”

Who owns America? Hint: It’s not China

Here’s a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent)
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • The U.S. Treasury: $1.63 trillion (11.3 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion

via Who owns America? Hint: It’s not China – Global Public Square – CNN.com Blogs.

Identity Wars -Coming to the Developing World?

The identity wars started in early modern Europe around the time of the Protestant Reformation. After a century of genocidal violence that left most of Germany ruined and depopulated, those wars subsided until the French Revolution set off an even greater and more devastating wave. Closely connected to the industrial revolution and the rise of democracy, nationalism emerged as a dominant political force in 19th century Europe, spreading from northwestern Europe toward the south and east. Over the next 100 years, more than a hundred million people died in wars as multinational empires in Europe and the Middle East ripped themselves apart in paroxysms of war, genocide and ethnic cleansing.

One of the biggest questions in world politics today is whether identity wars (conflicts between groups with different cultural, religious and/or ethnic backgrounds who inhabit the same stretch of land) were a special feature of modern European and Middle Eastern history or whether these conflicts will appear in more of Africa and Asia in the 21st century as development spreads.

Nigeria and Kyrgyzstan are just two of several examples of recent and ongoing ethnic conflict; others include the Sri Lankan civil war that ended brutally in 2009 — as many as 100,000 people may have died. Pakistan, China, India, and various African and Pacific island nations are all struggling with ethnic violence, demands for independence, and conflicts between different groups

via The Scariest Thing In the World | Via Meadia.

Our Emerging Energy Independence

For more than five decades, the world’s oil map has centered on the Middle East. No matter what new energy resources were discovered and developed elsewhere, virtually all forecasts indicated that U.S. reliance on Mideast oil supplies was destined to grow. This seemingly irreversible reality has shaped not only U.S. energy policy and economic policy, but also geopolitics and the entire global economy.

But today, what appeared irreversible is being reversed. The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere. The new energy axis runs from Alberta, Canada, down through North Dakota and South Texas, past a major new discovery off the coast of French Guyana to huge offshore oil deposits found near Brazil.

For the United States, these new sources of supply add to energy security in ways that were not anticipated. There is only one world oil market, so the United States — like other countries — will still be vulnerable to disruptions, and the sheer size of the oil resources in the Persian Gulf will continue to make the region strategically important for the world economy. But the new sources closer to home will make our supply system more resilient. For the Western Hemisphere, the shift means that more oil will flow north to south and south to north, rather than east to west. All this demonstrates how innovation is redrawing the map of world oil — and remaking our energy future.

via Oil’s new world order – The Washington Post.

China Bans their “American Idol” Show

Authorities last month had already ordered leading competitor Hunan Satellite to suspend broadcasts of the hugely popular “American Idol” type singing contest “Super Girl,” allegedly for running overtime. Stations were already cutting contest shows in which viewers vote for their favorite contestant, a concept frowned on by party cadres who don’t permit competitive elections or other facets of Western-style democracy.

China’s television watchdog has capped the amount of entertainment programs, including reality TV shows, that satellite channels can broadcast from the start of 2012.Each of the country’s 34 satellite channels will be limited to two such programs each week, said a statement issued Tuesday by the State Administration of Radio, Film and Television SARFT. Under the new directive, a channel can also broadcast a maximum of 90 minutes of content defined as entertainment every day during prime time – 7:30 p.m. to 10 p.m.The decision is the latest move to curb TV shows of “excessive entertainment” and “low taste”, said the statement. Within these brackets are some matchmaker programs, talent contests, talk shows and reality shows. Every channel has also been ordered to create a program that promotes traditional virtues and socialist core values.

via China limits entertainment programs on satellite TV – China.org.cn.

Why Manufacturing is Returning from China

Shipping and logistics adds 17 percent; finding a viable Chinese vendor adds 1 percent; quality issues add 4 percent; travel and communications add 1 percent and “all others” add another 1 percent to the total price of a product manufactured offshore. Some products are simply not good to produce offshore — those made with highly automated precision processes; those that are bulky and heavy; products that require flexible scheduling; and products that undergo many revisions, causing an increase in quality failures.

In a case study comparing costs in the United States and China, Meeker and his MIT colleague Jay Mortenson found that it is cheaper by 8 percent to produce a current design in China. There are substantial savings associated with purchased parts from China that include direct labor (79 percent savings versus U.S. labor rates), indirect labor and salaries (61 percent savings), benefits (75 percent savings), overhead (40 percent savings) and selling, general and administrative (SG&A) (11 percent savings).

When adding logistics to the China price, the cost advantage of producing in China shrinks to 8 percent: $13.85 for a case-study product made in China versus $14.99 in the United States. But when design for manufacturing and assembly (DFMA) software is applied to the same product, the China advantage vanishes. The China cost declines to $9.79 versus the U.S.-made product at $9.47

via The Case Against Shifting Production To China; Hidden Costs And Growing Risks Make U.S. Attractive For Manufacturing. Continue reading “Why Manufacturing is Returning from China”

America’s Gift to the World

Numerous world powers served as global or regional hegemons before we came along, and their record on economic development was painfully transparent: Elites got richer, and the masses got poorer. Then America showed up after World War II and engineered an international liberal trade order, one that was at first admittedly limited to the West. But within four decades it went virally global, and now for the first time in history, more than half of our planet’s population lives in conditions of modest-to-mounting abundance — after millennia of mere sustenance.

You may choose to interpret this as some sort of cosmic coincidence, but the historical sequence is undeniable: With its unrivaled power, America made the world a far better place.

via WPR Article | The New Rules: The Rise of the Rest Spells U.S. Strategic Victory.