China Strategy - Book Reviews

AndrewS

Brigadier
Registered Member
I've noticed that there are a number of books and articles which are trying to chart out a China strategy, but which almost all contain fundamental flaws.

I've come across a promotional article for the following book, which piqued my interest.

Contest for the Indo-Pacific: Why China Won't Map the Future
By Rory Medcalf

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Whilst the book isn't released yet, the article has already laid out a HUGE flaw.

In 2050, it projects Chinese GDP at $58 Trillion versus US GDP at $34 Trillion. Figures are using PPP.
If you take the existing 2019 GDP figures (China $27.3 Trillion and US $21.4 Trillion) - you end up with the following average growth rates for the next 30 years.

USA - 1.6% growth per year.
That looks like a reasonable assumption, given sustainable growth is almost certainly between 1.5%-2.5% per year.

China - 2.6% growth per year.
This is a hugely flawed.
It basically assumes that the Chinese economy collapses and stays that way for the next 30 years.
Whilst this is possible, it is NOT a probable scenario.

In a worst-case scenario, let's say the Chinese economy only grows a sustained 4% per year. That is down from 6% today.
Then the Chinese economy ends up 2.6x larger than the USA, not the 1.7x larger in the book scenario.

In other words, the book likely underestimates the size of the Chinese economy in 2050.
And that error is the size of a USA in terms of economics and potentially in military spending.
Such an error would invalidate much of the analysis and conclusions in the book.
Once the book is released, it will be interesting to see what economic assumptions have been applied to India and Indonesia.

My question is why didn't the author use the Australian government white papers as a basis, which estimate the Chinese economy as 2x the USA in the 2030-2035 timeframe.

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The article itself also skirts around another interesting point.

It doesn't quite say it, but in 2050, Australia becomes insignificant in terms of economic heft or military spending - even in relation to Indonesia.
In other words, if Australia wants to have a healthy relationship as the junior partner to Indonesia, it will have to stop lecturing Indonesia all the time, and actually treat a much larger Indonesia with deference. This will be fascinating to watch, if this actually happens.
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Also, the author is the Head of the "National Security College at the Australian National University" in Canberra.
Given the author's proximity to the Australian government in Canberra, what is the actual quality of advice being given to the Australian government?

You simply cannot advocate a China strategy, which is based on a Chinese economic collapse which lasts for the next 30 years.
 

hydrogenpi

Junior Member
Registered Member
The official GDP growth rate percentage is often like the unemployment numbers or the inflation rate of cost of living etc its never reflects the true value... I've noticed for example every time I go shopping things are getting way more expensive, and I'm not even someone who pays a lot of attention to prices. Its not just the food and staple stuff but also discretionary spending as well, example it used to be that one thing that could be counted upon to always decrease in price was tech and electronics... Now a top of the line Nvidia consumer graphics card is costing nearly $2000, just five years earlier the then best (GTX980) was "just" $540 USD. Now a state of the art AMD processor for gaming is upwards of $2000+ just for the CPU itself... things are getting more expensive. When I bought the DJI Mavic 2 Pro drone it was $1600 for the package, then for a while it spiked up to around $1800 during the height of the Trump tariff wars against China. Lets talk unemployment numbers in the USA for a second, they are flat out fake. They aren't counting the underemployed, or those that are chronicially unemployeed and whom have already given up finding a job etc and real wages (purchasing power) in the US have declined for two decades straight, at least since 2000. Many people in America have to work two or three minimum wage jobs and still live in a car, or a tent out on the streets

As for GDP, some have thought that the actual true GDP for USA in 2019 was negative. And that in fact America has been shrinking for the past several years already. That the 2 point something figure is completely not a real reflection of growth or progess in the US. For example I currently work a job in which I basically show up to work and do very little if anything at all, part of it is because workload is low, the other part is because there are so much red tape that its structured overload is impossible to work fast, and everything takes forever and its just a waiting game and most of the time I'm idling doing nothing. But I get paid fairly decent for it, and that is captured as "GDP" in the US, even though the real value of what I 'produced' if one could even call it that, is at least one tenth of what is "on paper" as contributing to the GDP of America. My father is the same way, he is a year from retirement and the last couple years he feels like he is just showing up to collect a paycheck and waiting for his benefits when they either lay him off or he hits full retirement. More and more jobs in the US are "fake", but its still captured as part of the GDP. It isn't just me, a lot of friends and coworkers I know also feel this strange emperor has no clothes situation. It is like they are know its a game and they all willingly look the other way, don't question it, and we keep riding the gravy train.
 
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