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.