Tuesday, January 8, 2008

China

China may pose the greatest homeland security threat to the United States but not for the convention notions of political or military power. Despite the fall of the Soviet Union over 15 years ago, foreign affairs and military pundits alike still frame the world in terms similar to the Cold War era. Iran, North Korea and now Pakistan get the majority of headlines because of their unstable or anti-American regimes. Nuclear weapons in North Korea and Pakistan, along with rumors of nuclear weapons development in Iran, excite those analysts brought during the halcyon days of the Cold War to imagine these nations posing the greatest security challenges. China has been at best ambivalent when it comes to its relationship with the United States. During the Cold War, the Communist government of China placed it squarely on the side of the Soviet Union. The collapse of the Soviet Union recast Sino/U.S. relations where relations were based less on political ideologies but rather on economic relations. The U.S. saw the developing Chinese economy as a way of improving its own economic future. China for its part saw partnering with the United States as an expeditious route of becoming an economic superpower. The Chinese appear to have achieved their goals which now along with Japan holds 44 percent of the federal debt. At the same time, China is posed to overtake Germany this year as the third largest economy in the world.

The economic relationship the U.S. now has with China has lead in part to the over 200 recalls of Chinese products last year. China is shipping unbelievable amounts of goods over to the United States far and beyond the ability of any company or federal agency to inspect. That statement should come as no surprise since the Department of Homeland Security recently decided to forgo a 9/11 Commission recommendation to search 100 percent of all shipping containers coming into the United States. The intention was to prevent a nuclear weapon or dirty bomb being brought into the United States via a shipping container, however the mechanics of conducting such pervasive searches has proved untenable. Perhaps though instead of looking for nuclear weapons or dirty bombs we need only look at the trade imbalance between the United States and China.

Last year, the United States imported over $266 million dollars worth of goods from China while only exporting $52 million dollars worth of goods for an deficit of -$213 million (source: U.S. Census Bureau). The imbalance has allowed China to buy more and more government securities which if China were to sell these off quickly would result in a increase of interest rates in the US. Keeping interest rates low allows the U.S. to continue to purchase large amounts of Chinese goods. The sheer volume of Chinese goods coming into the United States increases the likelihood of more recalls in the future.

China is a growing economy and much the like the United States during the early 20th Century is concerned only with growth. Products are being manufactured as quickly as possible to meet consumer demands. Such rapid growth does not allow adequate quality controls to be introduced to insure consumer goods are being manufactured in quality environments or with the best of raw materials. The money in China right now is being made by those that can produce the most not those than can provide the best quality control or safest working conditions. The United States is not really in a position to demand stronger quality control standards as the goods being imported are far cheaper than similar goods available from other markets.

Global warming became mainstream earlier this year with former Vice President Gore winning the Nobel Peace Prize for his movie “An Inconvenient Truth”. The change in views by the current administration has been seen in recent adoption of energy standards requiring 35 m.p.g. automobiles within 13 years and elimination of incandescent light bulbs within 4 years. However, these measures seem to pale in comparison to the environmental challenge posed by Chinese economy. China right uses more coal than the United States, Russia and India combined. The copious amounts of coal burned in China obliterates any carbon offsets effected by California. More pollution along the Western Coast of the United States comes from China than from the US! These trends are likely to increase as the Chinese economy continues to grow.

The United States is spending more of its own money to respond to issues created by China. The pollution and recalls of goods manufactured with dangerous materials means US companies have to spend additional dollars in clean-up and litigation. Chinese economic growth is having and adverse effect on the US economy. Unlike the Cold War era, the greatest security threat to the United States may not be a nuclear strike but a new economic superpower. Chinese/American relations are the best they’ve been in many decades yet the impact of the Chinese economy is more disastrous to the security of the homeland than any potential dirty bomb or nuclear device. The United States needs to somehow convince the Chinese to adopt a different approach to economic growth. Of course this may be perceived by the Chinese as an attempt to thwart their growth which be all accounts may lead them to rival the US in the not too distant future. The United States needs to encourage Chinese companies to adopt better quality control standards NOW and show them how this will increase, rather than hinder, economic prosperity. The United States needs to also help the Chinese implement cleaner manufacturing processes and need to see how this will help maintain worker’s health and still lead to economic prosperity. If not, our homeland will continue to be damaged and degraded by the Chinese growth. For the first time ever, we may lose the battle of a war that isn’t being fought.

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