Saturday, December 10, 2016

James Holmes — Why the World Should Fear a 'Thucydidean' China


This is an interesting article from the perspective of psychological projection. Professor Holmes projects onto China the behavior of the American Empire asserting its right to global hegemony as "exceptional" and "the indispensable nation" that gets to make the rules.

In comparison China has so far has done very little to project its power, while the US has been encircling China militarily.

Moreover,the Chinese government certainly has not claimed global hegemony as the US did in the Wolfowitz Doctrine. And has the good professor forgotten about the Monroe Doctrine that claimed hemispheric hegemony in 1823 and America's ongoing intrusion in the internal affairs of Latin American countries?

Moreover, the People Liberation Army officers that Holmes quotes are not in a position of authority to speak for the Chinese government on Chinese foreign policy.

Interestingly also, Holmes uses the term "Thucydidean." Certainly he is aware that the Thucydides trap refers to a country in decline going to war with a rising power challenging it to maintain position and that international relations (IR) experts have applied it to the US-China relationship. President Xi was so concerned it was becoming an IR meme that he addressed while in the US, brushing it off as irrelevant in today's world of mutuality.

It appears to be yet another example US pessimism and paranoia.

The National Interest
Why the World Should Fear a 'Thucydidean' China
James Holmes | Professor of Strategy at the U.S. Naval War College

17 comments:

Matt Franko said...

Its going to be more interesting to see how that zombie nation will react if Trump cuts it off from its USDs...

Tom Hickey said...

The best thing in the world for China, as ti was for Russia, would be to get kicked out of the "capitalist club" to set them back on the road to socialism before Wall Street and the City, the IMF, etc., blow the place up. Counties with any brains should be running away from the USD, which is a more powerful lever of control than the US military ‚ if they want to be free.

Six said...

Fill in the blank:

Without USD balances, the Chineses won't be able to produce ____________.

Matt Franko said...

Six tell THEM that...

They wont be able to accrue USD balances...

Look at your typical run of the mill zombie... they walk around all day continuously mindlessly stalking the normal humans... then if they catch one of the normal humans they eat them... BUT you never see a zombie starving to death do you?

Fill in the blank: "Without normal human flesh, the zombies won't be able to __________."

Same thing...

Tom Hickey said...

I already explained this. The Chinese government doesn't need USD balances and knows it. It just dumps them into US tsys.

The Chinese knew that they need Western technology and one what to get was making deals with Western companies to invest in production in China and to bring in Western technology.

That process is well along and now the Chinese government is focused on moving away from the export-driven model to increasing domestic consumption. Consumption is still less than half of Chinese GDP and it should be closer to 70-30. They have already said that is is the agenda.

Moreover, the Chinese government is well aware that credit is the driver and they are so big on credit creation that Western economists have been predicting doom for about as long as they have for Japan.

Matt Franko said...

Tom all of that is there to create conditions to accrue USD balances...

There is a difference between needs and wants....

Matt Franko said...

Tom the zombies dont NEED the human flesh... they WANT it...

Same thing with China.... they are a USD zombie nation...

Tom Hickey said...

I don't see it that way at all. The first priority was to industrialize, which required capital investment in productive capacity and technology, which the West provided as a condition of investment. Now the priority is to develop the domestic economy to overtake the US and surpass the combined economic power of the West.

China has been spending its USD acquiring companies abroad to the degree that the West is now concerned about a Chinese takeover in the works.

That there is the Beijing "Silicon Valley."

Zhongguancun

Bob said...

Matt is just yanking your chain.

Tom Hickey said...

BTW, the Chinese would be happy to spend or invest a lot more of its USD horde if the West would sell them what they want, but the West won't, "for security reasons."

Matt Franko said...

Bob it is typical human behavior illustrated by the artists in modern zombie lore.... it goes on all the time... its no different with China in this case...

How many times are our kids saying they "need" something when we then have to explain the difference between needs and wants to them...

China is still a very immature nation in this regard...

I just hope they dont go flying off the handle if Trump successfully cuts them off cold turkey from a constant flow of USDs.... the whole place could implode...

Tom Hickey said...

Stephen Roach, The World Economy Without China

China bears need to be careful what they wish for.

Matt Franko said...

Tom,

That guy is a moron economist:

http://content.time.com/time/specials/packages/article/0,28804,2086781_2086783_2086787,00.html

"Tough questions face us in America. Absent China as a buyer of Treasuries, who will step up and fill the void? "

Not qualified sorry...

Tom Hickey said...

Matt, on your criteria there is just you and Mike since you've dissed the MMT economists, too.

That's really whittling things down. :)

Tom Hickey said...

"Absent China as a buyer of Treasuries, who will step up and fill the void? "

If demand would declines for US Treasuries in the absence of China, which is a big assumption, the yield curve will steepen and long term rates will rise in the US economy, unless the Fed intervenes to flatten the curve. If the yield is attractive enough, there will be no problem finding buyers for the world safest asset. Certainly Stephen Roach knows this. He is actually one of the few US economics that understands balance sheets.

But if trade declines, which it would under protectionism and a trade war, then the trade deficit will evaporate too. GDP will correspondingly drop as the shock goes viral.

My take is that Trump is talking tariffs but his real intention is to negotiate a deal that avoids them. I doubt they would pass Congress anyway. But it sounds good for the voters and it gives him a strong negotiating position, which is continuing to build, e.g., calling the one-China policy into question. He knows that this is a red line for China and I sort of doubt he wants to go to war with China over what is tops in their national interest and matters zero to the US national interest. This is Kabuki.

Matt Franko said...

Well I dont know how you can value this guys analysis on this matter when he doesnt exhibit an operational understanding of the national accounting...

He says "tough questions face us" while GOP nominee just won on a platform of reducing the external balance BY DESIGN... he doesnt understand that the US fiscal deficit and the external balance are dual entries in an accounting identity...

Some US prices will have to go up a bit if US labor share of income is ever going to recover ... I can make my own sandwich for lunch and brown-bag it 2 days a week if I have to no problem... make do with one less pair of shoes...

Matt Franko said...

Here:

" As export-led Chinese growth surged, so did its saving surplus. China recycled that surplus back to the U.S. in order to keep America's consumption bonanza alive. It bought dollars — especially Treasuries — enabling the U.S. to keep spending and sustain itself despite an ever greater shortfall in savings."

This makes no sense whatsoever...

So China first had a "savings surplus"... IN WHAT? "MONEY!"?

Then they took that 'surplus' (which we dont know what that was in....) and "recycled that surplus back to the US"... what was it when it was in the US in the first place before it went "back"????

"It bought dollars"... with what?

"despite an ever decrease in savings".... yo thats because the savings are in possession of China its the second entry against the external deficit...

The guy does not exhibit an operational understanding of the economic events that are then documented in the accounting ex post... needs Accounting 101 and 102 at a minimum....

Here Nathan tweets this like 4x a day:

https://twitter.com/netbacker/status/807261102912454657

He gets it.... (I do not believe he is trained primarily as an economist...)