By Cory How U.S. Debt is Funding China’s Rise
The post below comes from a new site that was introduced to me a couple weeks ago, One Road Research. I have chatted with one of the founders, Peter Pham and will be having him on the show next week.
One Road Research is a research firm with its team actually in China relaying their insights on the culture and markets through its website – www.oneroadresearch.com. The coverage they provide ranges from economic commentary to geopolitical to financial market analysis. The site is free for now so I highly recommend clicking the link below and browsing the daily articles.
Click here to visit the One Road Research website.
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Welcome to the latest edition of The Great Investment Frontier (TGIF) report. So far in this series we’ve seen how tensions in the South China Sea are bubbling closer to the surface as old peace treaties become ever more fragile. The rising power of China and the aggression of North Korea have brought the region to the brink and created an unprecedented arms race. Now, the world holds its breath…
But if a full-blown conflict is the last resort… and if China dumping the dollar does not lead to a trade war… is it all quiet on the eastern front?
Not quite.
Storm clouds are still gathering over the South China Sea. And rather than stand toe-to-toe with the U.S., China prefers to follow a model of “acupuncture” warfare.
In the past, global superpowers from Rome to the British Empire built huge armies to project their power around the globe. But the world is changing. And China has no interest in sending thousands of troops overseas as the U.S. has done. It is much more interested in growing its influence in the region (in particular over Taiwan and the South China Sea) and in constraining U.S. power.
So, despite having the largest armed forces in the world, China is not about to use a sledgehammer to crack a nut. Instead, it is developing technologies and tactics that can disrupt and disarm its enemies.
China has high-tech air platforms, precision weapons and ballistic and cruise missiles. But analog weapons, on their own, don’t cut it in the digital age. So China is also developing electronic warfare capabilities designed to knock out their enemies’ communications and computer networks (more on this next week).
And China is funding it with U.S. debt.
The U.S. is Spending More in Asia
Under Donald Trump, the United States is spending more than ever on its armed forces. The president has proposed increasing the U.S. defense budget almost US$54 billion in 2018 alone… that’s a 10 percent increase on 2017 and would bring the total to around US$600 billion.
And more of those dollars are being spent in the South China Sea.
Senator John McCain, Head of the Senate Armed Services Committee, proposed US$7.5 billion of new funding for U.S. forces (and their allies) in the region, to counter the rising threat of China and North Korea.
But freedom in the South China Sea isn’t free. …read more
Source:: The Korelin Economics Report
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