A Global Cold War, perhaps?

A lot of people have a lot to say about China's economy.

In general, there are three major competitive advantages that China has in its economy-

1) Low currency rate

2) Low labour cost

3) A huge consumer market

These three are the cornerstones that have helped built up China's economy.The first two has led to China's becoming "the factory of the world" due to low costs and overheads in doing business. All three have, in its own way, served to attract foreign investments.

China's economy is seemingly well, but its economy has had its effects on the society in general. The main crux that runs through this is income disparity. China, as is well known, has only three major adversaries in its long history-

1) Japan

2) South  Korea

3) The Chinese themselves

A civil war or a local unrest may not seem that far off with its increasing disproportionate prosperity, i.e similar to those of the Indonesian riots, where rich Chinese were targeted by the poorer races.

Thus, the Chinese are not as strong as they appear to be. The Chinese government is currently in a frenzy whipping up nationalistc feelings through anti-Japanese sentiments and over the Taiwan issue.At the same time, they are monitoring their own citizens extremely carefully. This is in a bid, to avoid, what would , in their own minds, be a disaster- the Chinese fighting the Chinese.

The Chinese government has no choice but to continue developing its local economy due to all these problems. The dragon is now facing external pressures on its textile industry and its low currency exchange rate. Yet, once these two are compromised, it will serve to weaken China's economy to a very huge extent and result in a huge number of jobs being lost.

One may then ask, why the West is so wary of China, since its economy is so fragile. Well, this is due to the Shanghai -6 bloc that was formed in secrecy. The core three countries are China, Russia and India. The common ideologies of China and Russia, both which stems from Marxism, worries the West greatly. In addition, North Korea is friends with both these countries, and has even recently made a declaration that it wishes to combine capitalism and communism. It is also well known that China imports almost all its defence artillery and weapons from Russia, which is the reason that its defence budget has been able to be shroud in secreacy, only known to its own authorities.

That said, the United Kingdom and the United States of America have been keen to engage India, from its economy to its defence. The former country has a huge stake in the call centre industry while the latter country has given India two airplanes without charge. This is because India is deemed more acceptable as it is a democracy.

With all the chagrin, the United Nations is now facing requests from countries like Brazil and Japan to seek a permanent seat on the security council. A coalited international governance, they call it. Meanwhile though, there are suspicions on all sides.

Added to all this emerges the politics of oil, when China's burgeoning economy requires more energy in order to sustain itself. China's bid for UNOCAL sent alarms all over the United States of America, and was the time when many Americans first realized China's strength and power. China is now trying to secure oil from well, literally, any country that has it.

Meanwhile, Russia has become a much richer country and has even been able to pay off a substantial amount of its debt due to high oil prices. It is currently the supplier of natural gas to most of Europe and even now, under President Vladimir Putin, is seeking to further strengthen its economy.

Japan, at this time, faces an economic crisis, though it has somewhat eased and improved. Being a core ally of the United States of America, this spells trouble for the West, since Japan is seen as mostly the counterpart to China and to offset the power dimensions.

Tensions are thus building up on all sides, with much suspicion and speculation on all sides.At this juncture, shall we say- a global cold war, perhaps?

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Crystal says on 2007-03-03 02:58:49 about The reason that India may not necessarily tip into revolution mode is: 1) Nearly 60% of the population exists on less than $2 a day. 2) Indians believe that deities do drink milk when being offered that. (laughed to death when I watched that news programme)

Louis Godena says on 2006-05-14 20:08:08 about A Global Cold War? It may be true, as the author suggests, that China has the potential for civil war or at least some major internal upheaval over the next twenty years. A much more likely candidate for unrest is India itself. There, a number of armed Communist insurgencies are asserting themselves and in a number of states (Kerala, West Bengal) 'legal' Communists not only form the bulk of the ruling parties, but work constantly to thwart neo-liberal and capitalist policies favored by the West and by the Indian rich. India, you must remember, for all its vaunted 'democratic' trappings, remains a country steeped in feudalism and semi-feudalism, where vast extremes of wealth and penury exist side by side. Nearly 60% of the population exists on less than $2 per day. Corruption and bureaucracy is widespread, and FDI has actually *declined* over the past two years. Communal violence is on the increase and there is little that the central authority can effectively do under the present system to address this giant's growing and intractable problems. India, unlike Russia and China (and several of the SE Asia 'tigers') has never had a Communist revolution which, increasingly, is looking like a necessary pre-requisite for successful development in such countries.

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