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  • Morning Bell: The Debate Over China

    Want to hear something disturbing? China has increased its defense budget by double digits every year for the last 20 years. Just as China seems to be gearing up for some undefined enterprise, the U.S. is winding down its defense budget at a similarly rapid pace. Despite the obvious contrast, President Obama said recently that reductions in U.S. defense spending “will not—I repeat, will not—come at the expense of the Asia-Pacific.”

    Yesterday, Obama visited Australia to announce a renewed U.S. troop presence in coming months, part of a new security agreement thought to be a response to this ever-more aggressive China. The President brushed off the connection, but upping U.S. presence in the Pacific is related, and it’s critical—as long as it’s done with genuine commitment, according to Heritage Asia expert Bruce Klingner.

    When Republican presidential candidates gather next Tuesday for a foreign policy debate sponsored by The Heritage Foundation and the American Enterprise Institute, they should focus on the complicated balance found between maintaining cooperative economic ties and asserting a strong and lasting military presence in Asia with sufficient funding. The complicated stability of our relationship with China and our position as a world superpower depend in part on this balance.

    The situation is certainly complicated. Yesterday, the United States hit $15 trillion in debt—much of it held by the Chinese. Despite that reality, China is actually reliant on America due to a highly investment-driven economy that thrives on an open, global system of trade. It is a system in which the U.S. is China’s best customer and trading partner by far, something that is frequently overlooked in what Heritage China expert Derek Scissors says is an overrated Chinese economic system.

    China is simultaneously one of America’s greatest competitors and one of its biggest partners in the Asia-Pacific on energy, trade, economics, and more, and China’s disturbing military aggression is perhaps the most worrisome issue of all. Tangibly reasserting U.S. authority will assure regional friends of our commitment to them, and it follows through on Secretary of Defense Leon Panetta’s recent promise of a stronger American military presence in Asia.

    The U.S. should play a delicate hand moving forward. A deliberate plan that zeroes in on fundamental things like harmful Chinese subsidies, alliances with nearby territories, market transparency, and preserving a strong response against human rights violations would be a strategic win.

    Scissors writes that Chinese subsidies to state-owned or state-controlled enterprises are a vital focus area in how Congress handles China. He writes that “too little consumption and too much investment” are the main contributors to globally threatening economic imbalances when it comes to China.

    The U.S. should also consider our other allies and trading partners in surrounding Asia-Pacific areas. Heritage Vice President for Foreign and Defense Policy Kim Holmes notes that China has gotten more aggressive in claiming territories in the South China Sea, so the U.S. should be especially assertive in territorial claims that affect our allies.

    Klingner explains that a sustained U.S. military presence “is a tangible sign of America’s commitment to the peace and security of the Pacific.” The question remains, however, whether the U.S. can maintain a powerful, enduring role in the Asia-Pacific in light of planned $465 billion in defense budget cuts.

    China has also been notably aggressive in investing in “clean energy,” provoking President Barack Obama to declare them a leader in the movement. But, the declaration is misguided. As Scissors describes, the U.S. has raised energy efficiency by 2.5 percent annually in the past decade while China has only raised efficiency by 1.7 percent, despite their so-called “investment” in green energy.

    This week, the State Department opens the Bureau of Energy Resources, which will reportedly work closely with China due to its status as the world’s largest carbon emitter. But a word to the wise: It’s best to let the free energy market prevail over government intervention.

    China must also own up to its dismal human rights record, which has not improved since the 1989 Tiananmen Square massacre. It was just last year that the Nobel Peace Prize was presented to an empty chair, because recipient Liu Xiaobo and his family were imprisoned by the Chinese government for speaking out on behalf of political and democratic reform.

    The government resists any effort to loosen restrictions on speech, press, assembly, or religion and ignores discrimination against women and persistent child trafficking. President Obama has repeatedly turned a blind eye to this behavior and shunned the Dalai Lama, the spiritual leader of the repressed Tibetan Buddhists.

    China faces a significant leadership transition in the next year, so its policies and positions are not necessarily set in stone. Thus, America’s own presidential leadership should be constantly monitoring the state of the Chinese military and economy for pertinent, critical changes that will affect how we deal with China moving forward. Maintaining a strong U.S. presence in the Pacific region is imperative for our position in the world, and we must ensure all the funding necessary to make it happen.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    36 Responses to Morning Bell: The Debate Over China

    1. guest says:

      This is ill-informed and misleading. The premise is factually inaccurate. American military spending has not "winding down its defense budget at a similarly rapid pace."

      Defense spending has increased dramatically in the U.S. Percentage increases might be small, but total spending increasing is large.

      • zbigniewmazurak says:

        You are the one wo is wrong and misleading here. Defense spending has been declining nonstop since the end of FY2010. The CRs for FY2011 cut it down to $513 bn, and the Senate proposes to hold it down for FY2012 at $513 bn; the first round of defense cuts ordered by the debt ceiling deal will make cuts to the tune of $465 bn and the sequester, if triggered (God forbid), will cut defense spending by a further $600 bn. America's defense spending is NOT growing at all.

      • Mike says:

        Well the projected $450b decrease in the Military budget isn't a small percentage, and Obamas SecDef is telling congress that our readiness for war will diminish to levels which we haven't accepted since before WWII.

      • T. J MCENANEY JR says:

        Lost in the illusions of presidential rhetoric for his ongoing campaign since 2008, the so-called
        commitment to the Asia Pacific Theatre: 2500 Marines in Darwin, Austrailia, is entirely LAUGHABLE.
        As an Asia Pacific power- writ small–the United States has been Kicked out of the Phillipines, RVN,
        Okinawa(reduced presence), and our Defence Budget has been recently the target of Congess,
        although, almost all of the"uncut' will be Eaten by wars and aftermaths in the ME. Marines are
        famous for scaling "unreachable heights" , but adding 2500 to the entire theater is hardly provocative.
        although, I understand China has reduced their US bond holdings (1.3 trillion) to just above JUNK.

    2. Brian says:

      More ultra right-wing propaganda. As of September 2011, China held only $1.148 trillion of foreign-held US debt (see http://www.treasury.gov/resource-center/data-char…. While the Chinese hold a larger percentage than any other country, the quote "The situation is certainly complicated. Yesterday, the United States hit $15 trillion in debt—much of it held by the Chinese." is clearly wrong.

      Actually, the US Government is, right now, the largest holder of total US Debt at just under $5 trillion.

    3. Bernard P. Giroux says:

      It will be very interesting at some time in the future, when China really asserts itself in the Pacific. Whatever demands are placed on its periphery by China, the United States will be unable to counter. China has the manufacturing capacity which the U.S. no longer has; it controls nearly a trillion dollars of U.S. money; it now owns the intellectual property and the machinery which used to be here in the U.S., giving the U.S. the leading role in the world as a manufacturer. Now, we no longer have those jobs or the capacity to reproduce what has been lost.

      Secondly, how, pray tell, is the United States going to defend the Pacific if it does not have the Navy to do so? Most goods today travel on ship bottoms. The U.S. does not even own the ships. And, if China decides to interdict that shipping, who is going to stop them? The radical environmentalists in this country may get their wish: we may all end up farming our own plots, making our own clothes and trading goods with one another just to survive. Where is Ronald Reagan when you need him?

      • walter mattson says:

        We must not be afraid of China. They are as dependent on us as we are of them. Also, why are we still taking about carbon footprints and green energy as a factor? They are not a factor. They are a hoax that has been perpetrated by the UN and the IPCC plus the green energy people to advance their agendas. There are many scientists that have presented convincing data that proves that AGW is not a significant factor in the warming of the earth. What the US must do is to proceed full steam ahead on making the US energy independent. That means that if green energy is viable, it needs to stand on its own. In the meantime, we must proceed with oil and gas drilling of our own energy plus coal and nuclear and whatever energy sources that can compete in the free market place. Inexpensive energy is the number one item that helps the poor and middle class the most. Why can we not see this? Inexpensive energy impacts all facets of the economy. Wake up AMERICA.

    4. rholland says:

      Don't turn your back on China or you will end up with a knife in it. China is not our friend, they are at best a two-faced serpent.

    5. Barbara Frances Delo says:

      This is well stated. And continued economic integration, which gives us leverage, and solid military power, which creates respect, both give us good tools for this relationship. Yet we must keep in mind always that China's goals and values are different from ours. China's goal of returning pride and greatness to their long-established culture and doing so within the framework of their own goals and values, not ours, becomes an essential ingredient in forging policy with this great and rising nation.

    6. Jay Simmons says:

      Can you prove that with facts or are you just bloviating? If you wish to make an assertation than please back it up.

      • Clearhead says:

        Can you DISPROVE this with facts, or are you just stirring the pot? If you wish to DISQUALIFY an assertion, then please back it up. And by the way, the word is thEn.

    7. Bernard P. Giroux says:

      It will be very interesting at some time in the future, when China really asserts itself in the Pacific. Whatever demands are placed on its periphery by China, the United States will be unable to counter. China has the manufacturing capacity which the U.S. no longer has

    8. Bill O says:

      You need to have some intellectual integrity regarding "spending cuts". You will decry the phony budget deals by explaining how there are no real cuts, only decreases in the rate at which spending will increase. Now here you are using the same phony numbers for your own purposes. The truth is, there will not be any real cuts to defense, there will only be slower growth.

    9. Angel Barron says:

      This article has this quote:
      President Obama said recently that reductions in U.S. defense spending “will not—I repeat, will not—come at the expense of the Asia-Pacific.”
      Pardon me, but is this not the same man that he will to do whatever he could to reduce our defiictis, when he is main reason we now have the worst deficits in the history of this country? Is this not the same man that said he wants our country to take major steps to have energy indepdence from foreign oil producers, yet has delayed a decision on Keystone Pipeline, which, if approved, would help us to take major steps to energy indepedence? And that reminds me, is this not the same man who said he wants to create jobs, but his delayed decision on the Keystone Pipeline means we are not immediately seeing job creation to help our economy. We do not have a leader in the White House. We have a dangerous liberal in the White House causing great harm to our country.

    10. Jim says:

      The logic is incredible. Attack the customer fueling your economic growth for the purpose of… what? Watching a billion of your own people get obliterated in a nuclear holocaust?

      Henry David Thoreau comes to mind: "I saw that the State was half-witted, that it was timid as a lone woman with her silver spoons, and that it did not know its friends from its foes, and I lost all my remaining respect for it, and pitied it." He was only wrong in that it's not just the state, but also those who elect the politicians and set the national debate.

    11. Brian says:

      More ultra right-wing propaganda. As of September 2011, China held only $1.148 trillion of foreign-held US debt (see http://www.treasury.gov/resource-center/data-char…. While the Chinese hold a larger percentage than any other country, the quote "The situation is certainly complicated. Yesterday, the United States hit $15 trillion in debtmuch of it held by the Chinese." is clearly wrong.

    12. Carol M Kite says:

      Though Obama's foolish plan for withdrawl from Afghanistan soon, leaving dangerous vulnerability from Iran, his recent alliance with Australia might be the smartest move he's made to date. China is extremely volatile, a shame we are so financially connected in our deplorable situation, about to blow up in our faces. Maybe, just possibly, it's time we entered a moratorium, not buying anything from China at all, extreme austerity for Americans for whatever length of time it takes to bring China to its knees. Who knows we may find alternate sources that don't carry the risks to us that Chinese goods have in the past & always would.

    13. Richard J. Feduris says:

      Take away our defenses like the space programs, add severe cutbacks in our ability to maintain a viable
      armed forces and weapons development programs and even throw in this agenda for disarming the
      general public and the groundwork is now laid for, I hate to say it, INVASION! Sounds a bit paranoid?
      Yes it does-thank you.
      How about we fill our defensive missle silos with sand, pretend there's no such thing as DEFCON and
      have OPEC close the valve on all that oil we buy from them. Let's continue to spend billions on other
      nations to help them defend their land while we shortchange everything here. They can later watch us
      burn on YOU TUBE. Sounds a bit paranoid? Yes it does-thank you.

    14. Voterwise says:

      The media suggests China as the largest holder of our debt to divert attention from the fact that the federal reserve is the #1 holder. The fed holds 47% of the US debt. Almost half our debt would evaporate if the fed were ended. China actually only owns about 7% of our debt.

      Our military spending is way out of line and destroying our economy. We have gone far beyond "defense" and are engaged in nation building which is NOT a conservative principal. In addition, we are keeping corrupt dictatorships in power with the many millions of taxpayer dollars we send them. This is not keeping our county safer.

    15. toledofan says:

      I think that one of the things that has to be clearly defined is exactly what our military is supposed to do; do we fight wars to protect our borders or does the military develop into a nation building enterprise at the whim of whoever is President? I think that some of what is going on is just bad management and regarding the budget, we should spend whatever needs to be spent to maintain an edge. The problem is that as long as yopu have a socialist ideolog in the White House, defense spending will always take a back seat.

    16. Dr. Henry Sinopoli says:

      Of course higher taxes are the cost we will pay for the Democrats cutting entitlement spending, except for the exemption politicians will get on the proposed mortgage insurance reduction on tax benefits. The Super committee will exempt Senators & Representatives…I think by $4.00…Thank you Mr. Toomey….Don't worry about China…the politicians are just as dangerous….The next time you have lunch with golfer Bohner, ask him how much money he made on his insider tradeing..Heritage you need to raise more money to make sure you can afford lunch with the lifer politicians…we'll pay

    17. MACForReal says:

      11/17/11 Morning Bell characterization of Chinese held US sovereign debt as being "much of" the total outstanding could/should have been quantified. Granted China is the single largest US creditor. However, as I understand it, China holds ~ $1billion or the $15 billion outstanding – a lot for sure, but "much"?

    18. Glen says:

      Cutting Military spending, spreading our military all over the gliobe, what is this man?, thinking? Cut back on missiles in agreement with Russia. I see this country becoming a third world power. Oh, my God!

    19. Wayne Peterkin says:

      The number one priority of our federal government has always been and must continue to be national security. That requires the strongest possible military deterrent, which is why I do not support Ron Paul for President. Peace can only be achieved through strength and those who disagree are being very foolish and naive. There is little doubt that Chine seeks to replace the United States as the world's dominant super-power, both economically and militarily. There is no other country that can possibly counter their eventual dominance besides the United States.

    20. Evelyn says:

      is there some reason that I never hear of any impeachment – this pres has abused his power and usurped ours and done exactly the things that the declaration says are reasons fro impeachment!

    21. Our foreign policy with China is like this. China starts aggressive actions against an Asian country that we are supposed to protect. We send our military to the area to protect them and fighting breaks out. The maintenance engineer needs an important parts for our fighter jets to be able to fly but when he asked for the parts he is told we don't make those parts in the US anymore, they are made in China and China has cut off supplying those parts. The gunners on our ships asked for ammunition, also made in China. The government needs to borrow money to pay for our military forces and no one else has the money to lend us except, you guested it, CHINA. My question is how, in just two generations, we have become so stupid?

      • Gregory8 says:

        My theory is that we are losing our God-Given Blessings as listed in Deuteronomy Ch 28…They are conditional promises.

    22. Frank D Harrisson says:

      A cousin of mine was in the OSS (CIA) and was located in Burma and French Indochina and he worked with Ho Chi Min during WWII for about two years. The Japanese had a high price on them for all of the headaches that the two of them did to the Japanese Military and support systems. Ho told Nelson that China was going to be a big problem for us and the less we deal with them the better. Of course during Viet Nam Ho became a bad guy to us because in reality we chose the wrong people to defend of which Ho did not support, what else is new. Look at us now, Clinton managed to open Pandora's Box in the Middle East and defending Israel will become a major challenge but I trust our Almighty Lord will help us even against our present administration.

    23. Blair Franconia, NH says:

      Can't we just turn the Chinese ships loaded with lead-contaminated toys, and ketomine-laced dog food, back before they enter our ports?

    24. Shorty Feldbush says:

      Why must we serve as the Policeman for the world? What is meant by – Maintaining a strong U.S. presence in the Pacific region is imperative for our position in the world.???Can't we once again speak softly and carry a big stick. Lets shut down some bases, bring some military back to U.S. soil and concentrate on developing the strongest fighting force is the world using the best technology we can muster and controlled by manufacturing firms in this country.

    25. harold caton says:

      how about that rase

    26. Danny Liu says:

      The real reason they don't want to abandon Afghanistan is, because of the Exxon Mobile's pipeline pumping oil from Afghanistan, it took them to years to complete, after use troops landed overseas. George Bush Jr. brags he went to Iraq for the oil, to show off to his affluent friends. So instead of half the national deficit, we have it double, they want to build permanent bases in Iraq and Afghanistan, so big oil, and the Republican's can get rich. So why do they want to make Afghanistan a permanent duty station so they can protect the interest's of big oil and the pipeline, before they started drilling and pumping oil out of Afghanistan, the country was considered the largest untapped oil resource in the world. They don't talk much about the pipeline now because the Billionaire's and corporations have silence everyone. I don't vote and support neither party. George Bush Jr and the Republican party wanted to control the oil infrastructure of Iraq, and Afghanistan to enrich themselves, Billions traded for the corporations, while America accumulated Trillions in national debt, not such a good trade off, but it was for 1% of the population. The people of Afghanistan live simple lives as farmers and ranchers, living off of mountain goats, and sheep's, and simple crops, too stupid to realize what they have an abundant source of natural resources that they do not benefit from, while Hamid Karzai hordes over 100 Billion in secret accounts for himself. The people of Afghanistan use horses and donkeys, and pick up trucks, as their main weapons, while military contractor's keep building new weapon system's for themselves and get richer, America goes down hill in debt. China owns 11% of the national debt, and Japan owns 10% and they are over 200% over GDP in national debt. So who owns most of the national debt Private Security Firms profiting off the national debt of the U.S. Instead of precision bomb strikes to wipe out Iran's Nuclear facilities, they want a full scale war to glamorize themselves, and spend 90 billion dollars a year, and go start a 3rd war. Republicans say it is a clutch for woman and their kids to live off food stamps, and they should be cut off from the system, and starve to death, just like people who can't pay for medical treatments, they should just die. How broke is America, just like when the U.S. was involved with the Tutsi and Rwanda's fighting the U.S. didn't do much, but give them U.S. made weapons and they fought it out by themselves, while people guarding the U.S. embassy didn't do anything to fight people who were getting slaughtered right in front of them.

    27. Ben Lowsen says:

      It's misleading to say the President has shunned the Dalai Lama when he ha in fact met with him: http://www.msnbc.msn.com/id/43776827/ns/world_new….

    28. frank says:

      All we hear about is our loans from China. No one has mentioned that the change in purchasing savings bonds has wasted millions in paying the Chinese a much higher rate of interest than the Americans would get by buying savings bonds. I'm baffled why our govt would waste money so foolishly. We should fix a fair rate of return, say 3%, and push sales of U.S. Saving Bonds to American citizens. The tax implications are insignificant to this change.

    29. Kinderlynn says:

      China's position in the global manufacturing can be easily wiped out if the US stops buying the products produced by China…I believe the the manufacturing issue will come full circle and return to the US as the the US now faces a major challenge to survive the significant upcoming transition in our own leadership….Reaganomics may help but so far I have not seen a US Republican leader that I will vote for in the next election….The GOP needs to step up their game and bring forward a viable leader to challenge Obama's next term with solutions to our many US domestic and foreign issues….the first issue decrease entitlement spending and increase military investment spending,

    30. Behemot says:

      So what ? China will be largest economy in 8 years. And twice US economy in 16 years. It will then have the largest defence budget in 2026. In PPP measures China will have largest military budget in 2020.

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