Perspectiva económica: Doug Casey

Recently, we've seen the "Yellow Peril"  escalate across media and politics. There's always been a fear of China, perhaps starting with the immigration of laborers to California in the 1860s, then Sax Rohmer's Fu Manchu novels. It's logical enough. China has always seemed alien to Americans—their language, their script, their clothing style, and their congregating together in Chinatowns. They were painted as inscrutable and devious. Mao's Communist ideology and the Korean War, which was really a war between the U.S. and China, certainly didn't help.

Now China's newfound prosperity is seen as a threat. China, however, isn't the problem; it's the U.S. government's attitude towards China, combined with visible U.S. decline, while China is advancing rapidly on every front. So, the U.S. Government is trying to suppress China and throw up roadblocks to its progress with sanctions and tariffs, while denying it imports and trying to pen it up militarily. As with Russia, the U.S. is provoking them on many fronts.

However, the current U.S. policy is not only doomed to failure, but is actively counterproductive.

Is China truly an existential threat to the U.S., economically, militarily, or ideologically, or is it just a manufactured enemy?

China is huge, with 1.3 billion people. And over the last 40 years, it has advanced from a poverty-stricken, even primitive, country to a very prosperous one. They've risen from nowhere to the top rung economically, scientifically, and militarily.

Why? Because Deng Xiaoping radically altered their economic system in 1980, by dumping communism for capitalism, while maintaining the charade that China was still Communist. Although it's still called Communist China, the country is totally different from what it was in the days of Mao. It's no longer communist. It's simply an authoritarian country—not so different from most others in the world at this point. The Communist Party is nothing but a control mechanism, essentially a scam inuring to the sole benefit of its members.

Communism is an economic system where the State owns and controls everything. China is actually a model of state capitalism, also known as fascism, a marriage of the State and corporate interests. The fact is that (this will come as a shock to many) China is more free-market-oriented than most of the world's countries. That's certainly true of Europe these days. In fact, the Europeans are even talking about imitating China's more regressive policies.

Will China keep growing at the rate they have been? It's possible, but unlikely. For one thing, their government is retreating from the near laissez-faire policies that made them prosperous. For another, the huge savings of the average Chinese have been malinvested by their banks due to political pressures, with potentially catastrophic consequences. For another, their culture appears to have become less hard-working, softer, and more corrupt.

Are they a military threat? They're approaching parity now, and at the rate they're accelerating, they could be way ahead in a decade. But that doesn't mean they're necessarily a threat. That's because the days of invading other nations to steal the gold, the artwork, and enslave the population are long gone. That's apart from the fact that we don't know what the nature of the next war will be.

Do they want to start a nuclear war with the U.S.? No, they have nothing to gain from that. Can they invade the U.S.? No, that's almost impossible to do. The U.S., not China, is the problem. It can see China rising rapidly while it's declining, and may decide to strike while it still has the balance of power. The U.S. may use the internecine dispute between Beijing and Taipei, which is none of our business, as an excuse for starting a war.

The U.S. government is increasingly bankrupt. War power is built on economic power, and the U.S. government is not only bankrupt but becoming more so with Trump's 20% increase in military spending. Meanwhile, it's falling behind China in science and technology, which, like the military, depends on economic strength. I'm afraid the U.S. is like Wylie Coyote, who thinks he's on firm ground chasing a Chinese Roadrunner, while he's walking on air.

China is a non-threat. The problem is the U.S. itself; it's collapsing from within and blaming China for its own problems. Both the Republican and the Democratic parties are equally guilty, and there's no longer much difference between them.

What's true of both parties is that, barring the senility of a Joe or dissipation on the scale of a Hunter, their leaders all become incredibly rich. The Clintons are worth hundreds of millions of dollars. The Obamas are probably worth $100 million.

The fact is that China produces loads of consumer goods cheaper and better than in the U.S. The solution is not to bash China, but to free American entrepreneurs.