Quote Originally Posted by Fuchs View Post
Both would crash badly in wartime, but during peacetime the U.S. IS more dependent on the PR China than the other way around although not as drastically as some people portray it (China finances only a small fraction of the U.S. federal deficit directly).
China's financing of the deficit is not the bogeyman it's made out to be, for a variety of reasons.

I do not at all agree that the US is more dependent on China than the other way around, especially in wartime. The Chinese are sitting on a social volcano of enormous proportions: the income disparities among regions and social classes are staggering and the information flow has irreversibly opened. The aspirations are there and rising and they have to be met. It's as if they have the capitalist genie half out of the bottle. It won't go in and it remains to be seen whether they can get it all the way out.

The Chinese can keep this situation stable as long as they keep generating massive growth, allowing the industrial coast to absorb money-hungry migrants and maintaining at least the belief that material aspiration can be satisfied. The US can survive a major recession, as we've seen. There is a great deal of doubt as to whether the current Chinese government could. It's likely that a significant economic crisis would generate social upheaval on a scale that would make Tiananmen look like a mosquito bite. The threat to China's rulers is internal, not external, and they know it.

The Chinese economy is trade-dependent; the domestic economy can't absorb more than a fraction of the output. China suffered less than some expected in the recession because they sell highly cost-competitive goods that hold up well in times of reduced consumption, but trade sanctions in the event of conflict could hurt them enormously.

In the event of war there would be no need to move US vessels close to China: outbound goods and inbound resources could be apprehended at a distance. Modern version of the old fashioned siege; the Chinese are a long way from being able to project power far enough over the horizon to prevent it.

In any event the Chinese have no incentive whatsoever to fight the Americans or anyone else: the current order is quite conducive to their interests. The danger, of course, is that the recession that China will someday experience will generate major political instability and produce a reactionary and aggressive government. Not imminent, but not unimaginable.