The People’s Republic of China

1. The People’s Republic of China Friend or Foe? By Nathaniel Smith

2. Overview/ background The People’s Republic of China (PRC) is the world’s second largest economy and a major military power. As such, an important task for the USA is to find their motives and identify them as a threat, an ally or something in-between.

3. Historical Background In the 1970s, leaders reformed the economy and began to see progress. In 1949, the Chinese communist party succeeded in defeating the nationalist party ( who fled to Taiwan) 1 year later, they intervened in the Korean war and successfully tied it. Farms were collectivized and everything was done in 5 year plans. In 1958, the Great Leap Forward was launched. The process of collectivization was sped up and it caused massive famines. To further control China, the Cultural Revolution started in 1966. Many people were purged and life was dramatically altered. They opened up to trade with the West and established special economic zones. This catapulted hundreds of millions of Chinese into the middle class but also set up the potential for a Chinese-American rivalry.

4. Order of this piece • Order of this piece • Military matters • Economic issues • Environmental points • security • human rights • Analysis • scenarios opinion-maker.org www.asianews.it acus.org

5. Military Issues They are also opposed to American hegemony (especially in the Western Pacific) and seek to replace it with their own. Many of their leadership believe that China is the” Middle Kingdom”, the place at the center of humanity that the rest of the world revolves around. The PRC accuses the U.S. of meddling in its internal affairs by protecting Taiwan. They also claim islands in the South China Sea that are claimed by other countries, such as Japan. This has led to several controversies and other countries strengthening relations with the U.S. as a precaution To weaken American power, the People’s Liberation Army Navy (haven’t found out what they liberated but still searching) has engaged in an extensive modernization program, going as far as to launch an aircraft carrier and developing a missile aimed at killing U.S. carriers.

6. Military Rivals of China China’s naval buildup appears directed at the USN since the only other naval “rival” (and I use that term loosely) is India. Japan also exists as a rival, and a dangerous one at that since it is backed up by U.S. forces and serves as a base. China will build up naval and air forces in order to cut off Japan from U.S. aid. Overall, China is a very… assertive country and will use its military to expand its sphere of influence. In military matters, it is clearly a threat to the U.S. and its large industrial base means that it would be a formidable adversary. wayin.com

7. Economics China currently mines 95% of the world’s rare earth metals. They are used in most electronics and any animosity between the U.S. and China could end In them banning the export of REMs to the U.S., which would cripple domestic electronics production and severely hurt the military. As this graph shows, the dollar has been falling in value against most of the major currencies while not changing at all vs. the Yuan. Since China’s GDP is increasing relative to the U.S., usual economics probably don’t explain it. Through currency manipulation and paying workers lower wages, China has made themselves into a tempting target for foreign business and manufacturing .

8. Economics continued This one shows production of rare earth metals. Notice that demand has risen but every one but China has decreased production. In economics, we need China( at least for now). Their rare earth metals are needed for electronics and much of our retail sector is dependent on their products. This is a slightly more complex graph showing demand, supply and

9. Espionage and hacking The FBI announced that there are only 2 types of companies in the U.S. : those that have been hacked and those that will be. Many hacking attempts steal business designs and classified information. Chinese hacking is more than a bunch of disgruntled guys with computer skills (like anonymous), it is a government policy and a way for them to catch up in technology by stealing it from others. This Shanghai building has been reported by the New York Times as being the center of Chinese hacking unit 61398.

10. Espionage Several foreign firms have been required to make technology transfers in order to have access to China’s markets. This is a brilliant strategy on the part of the Chinese. They use their population and cheap labor to lure companies to them then use that company’s technology and replace them with domestic companies ( who have an unfair advantage. Chinese firms also do their part to advance their country’s interests. Huawei, a Chinese high tech firm, has been called a security threat. A congressional report has warned against using Huawei components in government equipment. They also have been suspected to conduct corporate espionage against other companies. Bottom line: On espionage, China is clearly a threat and has been very aggressive in furthering its technology.

11. Social issues This is a mobile execution van. It is used for mobile executions. This is from an Anti-Japanese protest that occurred. It doesn’t bode will for the PRC’s good intentions to see their people protesting a peaceful democracy. A very large system of forced labor camps exist in the PRC but this year (2013) they announced that those will be closed. They also have issues with human rights but if the U.S. calls attention to them, we are said to be meddling in their internal affairs.

12. Environmental issues China won’t sacrifice economic growth to help the environment. While climate change has gripped western leaders, Chinese leaders open 3 new coal plants every week. During the 2008 Beijing Olympics, coal plants in the area were turned off to impress the world. On social and environmental issues, China clearly goes contrary to international opinion.

13. Overall If there is a war, we have a good chance of winning. However, they could hack our power and transportation systems, effectively shutting our economy down. Our relationship with China will probably be a love hate relationship. From a military and espionage standpoint, we should be afraid of China. However, economically, we need them for a lot of things. If current trends continue, as China grows ever stronger relative to us, they will become more assertive and get more concessions from us. When they finally pass us economically, our days as the sole superpower will be over. Just like in the cold war, our options will be limited and countries will choose sides. Thus, it would be unfortunate to be hostile to China. They would make life miserable in the West Pacific and hack us a lot.