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China’s ‘T-bills Republic’
by Jake Highton
Feb 27, 2010 | 767 views | 0 0 comments | 7 7 recommendations | email to a friend | print
Henry Luce, co-founder of Time magazine, proudly proclaimed the 20th century as the American century. He was right. American economic and military might ruled the world.

The 21st century? It belongs to China.

Its population of 1.3 billion provides a huge market. Its rapid growth is stunning. Its industrialization and urbanization fantastic. Its modernization astonishing.

Its energy level is enormous. In Beijing, building construction goes on 24/7. China is so capitalistic that it even has hedge fund managers.

Mao’s tyrannical reign brought the disastrous famine, cultural revolution and the Great Leap Forward. His successors wrought the democratic upheaval of Tiananmen Square.

But all these blots on the Chinese escutcheon have gone down the memory hole because of its ever-growing prosperity.

The Chinese economy is the second largest in the world (behind America). It has 700 million peasants, all eager to buy cars but unable to afford them. But China, once a bicycle nation, is now the world’s largest car market.

A blend of communist totalitarianism and rampant capitalism, China is no longer the “sick man of Asia.” It is healthy and growing healthier every year.

The People’s Republic of China is now jokingly referred to as the T-bills Republic because of its huge accumulation of U.S. Treasury bills. Some estimates are as high as $800 billion in American debt securities.

A burgeoning Chinese middle class can afford diamonds, designer clothes, Porsches, overseas vacations and gated communities.

China is manufacturing the first mass-produced hybrid electric car. It is on the cutting edge of the world’s green auto industry.

It is sprinting to develop clean energy. Keith Bradsher of the New York Times reported recently: “China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines.”

China is also the world’s largest maker of solar panels. It is building a network of 42 high-speed rail lines. The United States? Yet to finish one.

Chinese problems? Plenty. Unbelievable pollution, pollution that darkens the skies in major cities like Beijing and Shanghai. Tremendous pressure for Chinese peasants, in an internal migration, to relocate in cities where the jobs and money are.

The chasm between the rich and the poor is so wide that the Chinese income inequality is greater than that of America. China is a horrible producer of carbon dioxide. A great deal of its river and lake water is undrinkable.

Environmental ills cause deaths, job loss and hefty medical expenses. The Internet has become a powerful threat to the regime.

Christopher Hayes, writing in The Nation, notes:

“Atop the urban-rural divide is a stark class divide. Peasants are the original Chinese revolutionary class, hundreds of millions of whom remain chained to a life of crushing pre-industrial penury, while oligarchs in Shanghai and Beijing live lives that would make even a Goldman Sachs banker blush.

“One recent night in Shanghai I dined at a glass-enclosed restaurant on the roof of an art museum where appetizers went for upward of $40.”

Taiwan?  It belongs to China. In 1973 the U.N. expelled Taiwan and recognized the Chinese mainland as its government. In 1978 America recognized China, severing ties with Taiwan.

But the hobgoblin of U.S. anti-communism always overcomes common sense. Taiwan will never be returned to China as long as the U.S. 7th Fleet hovers near the Taiwan Strait.

President Obama’s recent decision to sell $6.4 million worth of helicopters and Patriot missiles to Taiwan angered Chinese leaders. So did the visit to the White House of Tibet’s Dalai Lama. (Tibet is part of China.) But displaying chagrin is all China can do — or wants to do — for the nonce.

As much as China rightfully yearns to retake Taiwan, it will not try to invade for a long time to come. It will not spoil the joys of a booming economy on a money-draining war.

James Fallows, writing in this month’s Atlantic, gives a comparative military box score:

• America spends far more on its military than China.

• America has far more sophisticated military equipment.

• In certain categories of weaponry, China doesn’t even compete. The U.S. Navy has 11 nuclear-powered aircraft carrier battle groups. China is building its first.

But history is on the side of China. It is 5,000 years old. Chinese leaders take the long view. Chairman Mao, asked what he thought was the impact of the French Revolution, replied: “It is too early to tell.”

Jake Highton teaches journalism at the University of Nevada, Reno. He can be reached at
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