http://pacificsentinel.blogspot.com/2014/06/news-story-us-should-be-worried-about.html
Two recent items follow. I somehow don’t find it very comforting when the US Secretary of State describes armed conflict between China and the US as “Not inevitable.”
China tells U.S. to stay out of South China Seas dispute
http://www.reuters.com/article/2014/07/15/us-china-usa-asean-idUSKBN0FK0CM20140715
(Reuters) – China told the United States on Tuesday to stay out of disputes over the South China Sea and leave countries in the region to resolve problems themselves, after Washington said it wanted a freeze on stoking tension.
Michael Fuchs, U.S. deputy assistant secretary of state for Strategy and Multilateral Affairs, said no country was solely responsible for escalating tension in the region. But he reiterated the U.S. view that “provocative and unilateral” behaviour by China had raised questions about its willingness to abide by international law.
China claims 90 percent of the South China Sea, which is believed to contain oil and gas deposits and has rich fishery resources. Brunei, Malaysia, the Philippines, Vietnam and Taiwan also lay claim to parts of the sea, where about $5 trillion of ship-borne trade passes every year.
China’s Foreign Ministry repeated that it had irrefutable sovereignty over the Spratly Islands, where most of the competing claims overlap, and that China continued to demand the immediate withdrawal of personnel and equipment of countries which were “illegally occupying” China’s islands.
Beijing’s Appetite for Engagement Ebbs
http://online.wsj.com/articles/beijings ... reno64-wsj
The U.S. project to engage China has been a roller coaster ever since (Nixon’s visit to China). The Tiananmen Square massacre, whose 25th anniversary passed last month, sent the relationship into free fall.
Today, there’s little doubt we’re in a new slump. This one looks very different, though. Previous lows were often triggered by a tragic event, like the Tiananmen killings, or the accidental U.S. bombing of China’s Embassy in Belgrade in 1999 that resulted in government-sanctioned mobs pelting the U.S. Embassy in Beijing with rocks. The latest decline reflects a deeper malaise. Disillusion seems to be taking hold on both sides. From the U.S. perspective, engagement with China hasn’t brought forth the kind of change that Nixon—and every U.S. administration since—has hoped for and expected.
U.S. policy makers see a frustrating paradox: at a time when China’s economy is in triumphant ascendance—thanks in large part to America opening its vast markets to Chinese trade—the old hatreds that Nixon remarked upon are burning more brightly than ever. Meanwhile, China’s neighbors once again feel threatened. A study by the Pew Research Center released this week showed that large majorities in many Asian countries fear that China’s aggressive territorial moves in the region could lead to war.
Since taking office early last year, China’s President Xi Jinping has been emphasizing a resentful type of nationalism that seeks to settle scores for the country’s “century of humiliation” at the hands of imperialist powers. That’s driving China into an uncompromising quest to recover territory it believes was stolen when the country was on its knees. . . .
Both sides talk frankly these days about the danger of strategic rivalry leading to armed conflict. “It is not inevitable,” Mr. Kerry told his audience in Beijing. “It is a choice.”
As enthusiasm for engagement ebbs, however, the options for a constructive relationship are narrowing.
The GNE/CNI Chart follows. I estimate that the GNE/CNI value for 2013 will be down to between 4.6 and 4.7, which would be consistent with the observed 2005 to 2012 rate of decline. At an GNE/CNI Ratio of 1.0, China & India (China & India’s Net Imports = CNI) alone would theoretically consume 100% of Global Net Exports of oil (GNE). ANE (Available Net Exports) = GNE less CNI.
Absolutely key point: Given an inevitable ongoing decline in GNE, unless China & India cut their consumption of GNE at the same rate as the rate of decline in GNE, or at a faster rate, the rate of decline in ANE will exceed the rate of decline in GNE, and the rate of decline in ANE will accelerate with time (on a year over year basis).
At the observed 2005 to 2012 rate of decline in the GNE/CNI Ratio, it would be down to about 2.0 in 2022, which would imply that China and India would be consuming 50% of Global Net Exports of oil.
I’ve described what happens to the GNE/CNI Ratio from 2012 to 2022, and in subsequent years, as the $64 Trillion question.