Sunday, April 26, 2015

Rising of a world power - how China can be thebiggest military player in the West pacific region.



Due to the military power balance many country can continuous anti-Chinese military and foreign policy in the West-Pacific region,and around the life critical Chinese sea routes.

However as soon China develop a capable Naval force any anti-Chinese  military/foreign policy will have the same effect on Japan, Vietnam ,Malaysia or any other country in the region as the ant -US policy for Cuba or the anti Russian policy for Ukraine.

The US has the advantage of the many friends because they are the dominant naval power in the region.As soon as there is another dominant player in the region everyone there will try to align to him.
How could it happens?
The consumption in China is quite low but the investment is high.
One of the oldest way to increase consumption by government force is the military spending.China has low personal consumption and high investment, so it is fairly easy to increase by a magnitude the military spending , even with increasing consumption and stagnant GDP.

The Wages of Destruction: The Making and Breaking of the Nazi Economy is quite good description fo the possible future evolution of Chinese naval /military force.
Germany was in the same position like China now after the first world war.

However there is a critical difference: Germany had  way smaller economy than the US back then ,but China has roughly the same economical size like the US now.

DATA HERE - WORLD BANK PERSONAL CONSUMPTION
If we dig into the data then we can see that China consumption level is only 34%, compared to the 68% US share.
Military spending is 2.1% (China) vs. 3.8% (USA)

So China can increase the military spending say to 30% without affecting the level of living, even having capability to increase at teh same time the level of living in China .

The US doesn't has this luxury , the upper level without serious restrictions on the "American way of live"
 could be around 6-8%.


If we consider that the Chinese and US economy roughly has the same capacity / capability, then it spells trouble for the US military dominance.

Friday, April 24, 2015

Interesting article in the Carnegieendowment.org , about Indai and the US aircraft carrier technology


Making Waves: Aiding India’s Next-Generation Aircraft Carrier


Contain interesting data.

The basic premise doesn't make sense, I mean it will be interesting to see the US sharing the electromagnetic catapult system with another country, or the full aircraft carrier system technology.

The US had arm sale embargo against India up to 2005 ,so to sell anything to India the US has to overcame the distrust,  and at the end of the day India has 1.3 billion residents, so if it start to grow like China then in 15 years time the US will found another adversary power , however at this time using US originated technology. :)

This is the main point.

If we check the map the Chinese intention visible: protect the oil supply lines from Saudi-Arabia .

However for China to get access to the Indian Ocean has to pass the Singapore strait, so there is not so much sense to arm up to head India.
China has to get full control of the Chinese sea AND Taiwan to step forward to the Indian Ocean, however over there the main intention of them will be the protection of the shipping lanes against  US blockade / intervention.

Without breaking the island chain (by controlling Taiwan example) they can't get access to the world ocean .
Motivation of China :

Yinhe incident

Japan and US enclose Chinese coast within sensor net

 




Friday, April 17, 2015

What makes a superpower,and how the reserve currency born?

Hypothesis: The necessary and sufficient condition for the reserve currency is a naval power that better than the second /third naval power together.

Proof:
1. The pound lost the reserve currency status AFTER the US became the NO one navy, and by huge margin .
2.  By sea shipment it is possible to reach 94% of the humankind, and best part of the earth population is arranged around the seashores.
3. The country with the biggest navy can close/open the sea lanes, and it means that for every trading country they are the table point.Every other country can be blocked by the given country - so the currency of the sea superpower has the lowest risk.

Based on the above logic the currency of China can replace the dollar only if the Chinese navy will be the No.1 sea power.

At that point the Yüan will set the value of everything,and the world will force China to accept the reserve currency status,.

Picture (from the http://www.heritage.org/research/reports/2010/01/the-state-of-the-us-military )
From the seekingalpha
nice table on the Wiki , showing that the US build seven times more ship during the second world war than everyone together.
The capacity of the US was more than seven times higher than the capacity of Britain.


Sunday, April 12, 2015

Polar ice cap melting

http://nsidc.org/arcticseaicenews/

Quite nice,the grey band showing the 95% chance to have the value within that limit.

It means that we should see this low level of ice one time in every forty years.

The winter minimum makes the Siberian north-west shipping lanes cheap to maintain - strategically  important to Russia.

It makes the Russian north fleet more valuable than before, and the century old strategy to contain Russia off from the warm waters less usable .


Interesting to see as the Coriolis force drive the ice to the coast of Iceland/America on one side, and to the Asian side of the Bering on the other.