China has Risen to Number One in Purchasing Power and Wesley Clark Call for a New Long Term China Strategy and a Global Leadership Partnership

The International Monetary Fund reports that in 2014, China, not the United States, has the world’s largest economy. The official point of China passing the US is in October.

By the end of 2014, China will make up 16.48% of the world’s purchasing-power adjusted GDP (or $17.632 trillion), and the US will make up just 16.28% (or $17.416 trillion). By 2019, China will be about 20% larger than the US economy on a purchasing power basis.

Former NATO supreme Allied commander in Europe General Wesley Clark says China’s harsh suppression of political dissent, from Hong Kong to Xinjiang, and its close ties to Russia, Iran and North Korea, have finally laid to rest the dream many Western leaders have had since the 1990s: that “constructive engagement” would eventually, inevitably lead to more openness and democracy.

NBF Comment – Really the “best” that could have been hoped for would be a faux democracy like Taiwan or an effective but authoritarian system like Singapore. However, a nation that is an economy that will be 200 times bigger than Singapore or 40 times Taiwan would always have a huge effect on the world order.

Nextbigfuture summarizes Wesley Clark

* China is already economically very strong
* China will keep getting economically stronger relative to the US
* China military is not as strong as the US but China has technological and other capabilities that are a different kind of challenge than the US has seen post- WW2
* The US needs to bring China into a long-term world leadership partnership while not screwing the European and Asian allies of the USA

Wesley Clark’s Prescription and Analysis in Detail

If American is to retain our global leadership, and be a constructive, countervailing force as China rises, America needs a long-term strategic vision of our own: a strong, growing economy built on a foundation of energy independence; a vibrant, effective democracy; assertive, patient diplomacy backed by supportive allies; and a military capable of standing toe to toe with China in a crisis. With these pieces in place, we can succeed in helping China assume its rightful place as a global leader, and perhaps an equal of the United States, in a manner that promotes global prosperity and stability. Perhaps then China’s leaders will feel secure enough to grant real democracy to its people. But it will be a long journey.

America must work to persuade China that its interests lie not in narrow self-aggrandizement, like expanding its territorial reach, but in assuming shared responsibility for global leadership, commensurate with its wealth and power. The institutions of global governance — the United Nations, the International Monetary Fund, the World Bank and the like — have not been perfect, but they remain the best framework for securing peace and prosperity around the world.

China operates on a long-term vision, driven by its own interests. By some estimates, China’s gross domestic product could surpass that of the United States sometime in the next decade. By then, Chinese military strength — including aircraft carriers, land-based aviation, submarines, and ballistic missile technologies, all of which could be directed against American aircraft carriers in the East and South China Seas — will be formidable. Even without any military confrontation, the balance of power in the western Pacific will shape the Chinese predisposition to push, threaten or compromise.

The United States will emphasize multilateral forums for resolving disputes through international law, and fulfill our commitments to allies. China, in contrast, views this international order and these formalized obligations as being heavily tilted against it.

As late as 2005, China’s admiration for the United States — and awareness of its own rising power — were such that a young, well-connected Communist Party leader told me, “China knows that you and Britain were best friends, and Britain gave you leadership of the world; China wants to be America’s best friend, so you will give us leadership of the world.”

If there was a turning point in China’s assessment of America, it could be found in the financial crisis of 2008 and its aftermath. While still respectful of our military might, China began to see the United States as a failing system, with a debt-saddled economy and a dysfunctional government, vulnerable to being replaced as the world’s leader. In 2011, a well-placed Chinese associate told me that the country’s new leadership intended to dominate the South China Sea; that its regional rivals, like Vietnam, would bow to its ambitions or “be taught a lesson”; and that if the United States interfered, our assets would be targeted.

By 2013, this associate’s warnings had become even more ominous: “We can see your stealth aircraft”; “we have our own GPS and can shoot down yours”; “we know your technologies from all your companies and from NASA, because Chinese scientists work these for you”; “you will not have any military relations with the Philippines unless we allow it, because China provides them $3.5 billion per month in remittances through Hong Kong”; “Chinese shipyards are working 24 hours a day, seven days a week”; “more than 30 ships were launched between October 2012 and April 2013”; “by 2019 China will have four aircraft carriers deployed.”
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China doesn’t seek conflict — it can achieve most of its goals by adroitly combining traditional diplomacy with its vast economic power. But neither will it avoid conflict. It has in the past used its military “pre-emptively” rather than defensively. A danger is that an ascendant China seeking recognition of its power and rights, will, whether deliberately or through miscalculation, spark conflict.

But the deeper strategic problem for America is China’s more fundamental challenge to the global architecture of trade, law and peaceful resolution of disputes that the United States and its allies created after World War II. China’s strategic rise — patient, nuanced and farsighted — threatens all of this. Just as the United States has sought the worldwide adoption of democratic values and American norms for international behavior, China will seek structures and relationships that support Communist Party rule at home, and its policy that countries should not intervene in one another’s affairs.

The ascendancy of naked and direct self-interest as an organizing principle would mean a fundamental weakening of Western institutions and values, including the rule of law. This would be a step backward, toward 19th-century ideas of the balance of power and spheres of influence. The question, as Henry A. Kissinger has framed it, is “whether China can work with us to create an international structure in which, perhaps for the first time in history, a rising state has been incorporated into an international system and strengthened peace and progress.”

In analyzing China, the United States must look beyond historical parallels. In scale, China’s economic growth, and the challenge it presents, is vastly greater than that of Japan in the 1980s. A century ago, Germany was an ascending power willing to wage war, but it never had the population or industrial capacity of the United States, or, until the 1930s, the leadership of a single political party, above the rule of law. Nor is China like the Soviet Union, economically isolated from the larger world. There is no historical precedent.

For over two decades, the American strategy toward China has balanced between “engagement” and “containment,” a version of American policy toward the Soviet Union during the Cold War. The Obama administration’s “pivot” to Asia, announced in late 2011, was perceived as being directed against China, a shift toward containment. The United States has not only shifted forces but also updated defense treaties as part of this pivot. The United States is negotiating the Trans-Pacific Partnership, an effort to create a large free-trade zone encompassing 11 other countries, but not China.

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