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Containing China even as she peaks

November 17, 2011

It is my belief that, while it continues to be a major economic force and will challenge US supremacy in the coming decades, China’s long term potential is at or near its peak.  Like a supertanker that takes a long time to turn, this peak may not be evident for awhile, and policy makers will continue to make moves as if China is still, inevitably, rising.  Still, the signs that China has peaked are around.   Yesterday, there was a report that a major Chinese economist had made a secret speech claiming that many of China’s financial numbers are fabricated and that, in fact, the nation is close to bankruptcy.  Today, it is Amitai Etzioni at National Interest, with an essay on the Overblown Fears About China’s Rise.

Of course, this does not mean that China is suddenly rendered impotent.  Indeed, as they recognize their peak, they may become more dangerous, knowing that their moment is slipping away.  For that reason, the US will still attend to its coalitioning moves, strengthening ties with allies surrounding China. Earlier this week, we noted the moves to share the advanced F-35 aircraft withIndia and Japan.  Yesterday, it was announced that the US would establish a naval presence in Northern Australia.   These moves are not just aimed at China, but also at the various nations of the Southern Asian periphery that have concerns about China.  A US presence in the region serves to bring many of them into our orbit, as analysts in India have already noted:

The US move to create a naval base in northern Australia close to the South China Sea can actually mean more dollars in the Indian kitty, and put more strategic and business opportunities in New Delhi’s way, sources said. The first piece of evidence has come by way of Australia’s decision to sell uranium to India.

The US move will provide a sense of protection to East Asian countries including Japan, who have serious conflicts with China but buy vast amounts of Chinese goods. The new found protection will encourage East Asia to reduce its dependence on China for goods and enhance economic ties with India, sources said.

“Japan, Vietnam and Indonesia will feel more secure. India and Indonesia can get together to control the Malacca Straits, which is the route though which 90% of Chinese goods to East Asia passes,” Subramanian Swamy, Janata Party president and a widely regarded China expert, told TNN.

I have not agreed with everything they have done (especially the failure to maximize the strategic domestic energy resources), but this is a very strong move by the Obama Administration.

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