The US-China relations is an important subject since it affects global economic development and world prosperity and peace. The US-China bilateral relationship has taken a path of accelerated deterioration since the arrival of the new century. Strangely, the recent global pandemic COVID-19 attack, a common threat to mankind, should have coerced every country to work together to face the world's common enemy, yet we see rhetoric between the two nations clearly diverting their energy away from the pandemic and the troubled global economy caused by the virus. The rapid growth of China’s GDP has been interpreted by some hawks as ‘China Threat’ (to the U.S. and projected to the world) based on mostly ideologically biased assessment with little rational analysis.
The political anti-communism policy has a deep root in the U.S. foreign policies which have become a legacy driving the U.S. 'China policy' despite of China’s departure from the Lenin-Stalin style of communism long since the 1960’s and her persistent searching for a socialistic system suitable for China over the past seven decades. In a fair analysis, China’s success in her economical development actually was owing more to her embracing of capitalism perhaps than to her failed experiments with grandiose socialism, which might have yielded some valuable lessons for her to attempt capitalism. In this article, the author would like to analyze the “competition issue” between the U.S. and China, which seems to be the basis for their 'Thucydides trap' (Graham Allison) and the root cause of their mistrust and rhetoric. Through a rational analysis free of legacy arguments, the author arrives a conclusion, as contained in the title of this article, engagement between the U.S. and China is a beneficial China Policy.
We shall take a broad perspective of comparing the two great nations' 'competitiveness' in the following five domains, which are fundamentally related to a great nation’s ability to compete, to arrive at our conclusion:
The U.S. and China have a total territory of 9,833,517 sq km (land 9,147,589 sq km and water 685,924 sq km) and 9,596,960 sq km (land 9,326,410 sq km and water 270,550 sq km) respectively, a coast line of 19,924 km and 14,500 km each, farm land of 15,226.3 hectare (0.47 per capita) and 11890 hectare (0.09 per capita) with comparable temperature range. China has more mountains and deserts thus less agricultural land. The U.S. has two long coast lines in Pacific and Atlantic oceans whereas China has only one coastline in the Pacific. The U.S. has about 329 million people（median age 37.7, life expectancy 75.8, growth rate 0.37%, birth/death rate 12.4/8.2 per 1000) versus China 1400 million (corresponding figures 37.7, 80.1, 0.8%, 12.1/8) yet the U.S. has 20% more cities than China. So in this comparison, the U.S. no doubt has been blessed far more than China with more resources (for example, oil reserve) and fertile agricultural land (food production). Other than the population difference which can be an asset or liability depending on the government’s ability to manage the Human Resources for productivity, the U.S. has a clear advantage to feel more competitive and secure.
The U.S. and China are the world’s number one (GDP $21.43T, GDP per capita $36K and rate of GDP increase 2.3-2.9%) and number two economy (correspondingly, $14.36T (67% of US), $4266 (12% of US), 6.1-6.9% (2.6X of US)). Their trade amounts to $559B with U.S. exports $106.6B (aerospace, food, engines, vehicles, IC, energy and copper) and imports $452.2B (phones, PC, toys, games, sports, monitors, seats and electrical) with an imbalance of $345B which should be offset by about $40B net service gain by the U.S. The U.S. services export to China has grown steadily over a decade from $13B in 2007 to to $56B in 2017 obviously with growth potential in the long run.
Looking into the trade pattern between the U.S. and China, it was clear that China’s export advantage is in the so-called first category of manufacturing products, namely products derived from agriculture, forestry, animal husbandry, fishing, etc. which contains food and household necessities. China’s total output is about $1021B versus U.S. $169B, a ratio of six to one. In the second category of manufacturing goods, namely, mineral, electricity, gas, construction material and appliances of mechanics and electronics, etc., China’s net output is $5597.8B versus the U.S. $3901.4B, a ratio of 1.4 to 1. In the third category of products , namely high technology and items not included in the first two categories, China’s net output is $7744.2B vs the U.S. $17,357.1B, a 45% ratio. The above analysis plus the labor productivity data (China $8253/person vs the U.S. $10,110) clearly show that the U.S. indeed depends on China for low end consumer products but definitely holds an upper hand on more advanced products with 12X labor productivity. The U.S. sets a self-constraint limiting sales of high technology products to China out of national security argument, which is hard to justify other than labeling it as a sense of insecurity - an undesirable trait in any competitive situation.
III. International relations and Military
The U.S. has ten more foreign diplomatic relations than China has, namely 190+/-10. I cannot put down a definitive number since search engines do not return a definitive number even from the website of the U.S. State Department. One website reported that the U.S. has ten more foreign relations than China but the U.S. has 273 foreign offices which is 3 less than China has. The above numbers were cited elsewhere as well. The U. S. spends $643B (2018) on military/defense budget (36% of world military expenditure, $1.785T) vs China spending $71.58B ( a ratio of 9 fold). The U.S. maintains about 800 military bases (after a recent reduction of 100) in seventy foreign countries and territories whereas China is known for sure to have one in Djibouti where a U.S. large military base also exists. Afghanistan, Cambodia, Myanmar and Tajikistan were also reported having presence of Chinese military bases but Cambodia openly denied it.
(to be continued)