China?

[SHRED]

I have heard "experts" claim that China needs us as much as we need them but is this really true?
It seems to me that they have economical leverage over the USA.

For instance:
In any geo-political conflict (Taiwan or mideast oil) with the USA, couldn't China threaten a Bond sell-off as ransom to get their way?
I am not talking about a huge move but just enough for a shock to drive up interest rates and damage the USA economy enough that the current batch of politicians would find it very difficult to be re-elected and therefore legislate in China's favor.
Again, not a big enough move so as to stop the USA from buying Chinese goods. Just a slow down.

I don't know enough about this topic but I have heard others claim that China wouldn't do anything because they need us.
I have a feeling that we need them more.

It appears to me that our place in the world economy is a very big security issue that is often overlooked.

[Virginia Dare]

1. If it were a chess match, I think we would be

eating China's dust. The age of the U.S. as a superpower is on the down swing.

[neoblues]

3. Only one direction available from the top...

And yes, since we have practically dismantled all of our own manufacturing capability, we will either have to rely upon product from China or try to find alternatives (almost surely at a significantly higher price) from still other countries. That, of course, is minor by comparison to our dependence on the good will of China not to pull the plug on the dollar (since they own such an enormous supply of ours, in the form of debt). True, it would hurt China's booming economy to either forgo U.S. purchases or to deflate the value of the dollars it already owns; but they would probably recover much more easily than we would. As it is, it's becoming increasingly unwise for the Chinese to continue supporting such a borrower as us considering there's less and less actually supporting our economy. It's like lending to a successful, but aging alcoholic who's job performance is slipping badly (and who's getting into all sorts of trouble; and facing potential job loss). At some point, when you own the second mortgage, vehicle pink-slips, and a pile of i.o.u.'s to such a one... you begin to regret the fact that they're the biggest customer to your business... and start looking for a way out.

[acmejack]

2. So it would appear.

They have been investing in economic warfare IMO. It remains to be proven if it will just as effective as our Trillions spent on weaponry.

[annabanana]

4. They have us by the short & curlies

Right now all they need us for is cover. It just makes it a little easier to take over.

[NewJeffCT]

5. Right now, China still needs us more

We are still, by far, their largest trading partner. If the Chinese currency rises or the US has a depression/severe recession, they risk putting millions of Chinese out of work as US run factories in China relocate to India, Vietnam, Mexico, Brazil and elsewhere.

The Chinese banking system has bad debts reminiscent of the roaring 20s in the US...

Their healthcare system makes ours look like France - even if insured, people have to pay out of pocket up front for surgery and then hope to get payback through insurance.

They still rely on the central government to plan their economy much more than in our system.

However, in 5 or 10 years, China could feel it is worth the risk

That said, China will NOT do anything confrontational that would risk the Olympics in 2008, which will be China's coming out party to the world.

[Inland]

6. I think it depends on the "geopolitical conflict" you are talking about.

I mean, in the case of a nuclear war, we've got them beat. Any military conflict that isn't in the Taiwan Straits or close to China's border, it would still be the US winning.

Moreover, China itself is in a precarious currency situation. It has decided to maintain a yuan undervalued to the dollar. It would be tough to shake things up a little by striking at the market for US government securities without causing the dollar to further devalue and put pressure on Chinese exports, not only to the US but around the world, and Chinese investment.

That having been said, China can make everything it needs. China has been able to firmly repress its muslim minority while keeping the middle east oil producers on their side. China has oil and gas deposits in the South China Sea, or says they belong to it. China has a billion fucking people.

I think the real question is the choices that the leadership makes. Our leadership says, let's put our country in hock to China and save on labor costs by moving all our production of goods overseas in order to fund current consumption, huge residences, a war in Iraq, a negative savings rate, and the lifestyles of the rich. You know that's going to make our country weaker than it would otherwise. It HAS to: you can't both have your cake today and eat it in the future.