Addressing Chinese dominance
Summary
This post is about investigating possible non-military courses of action open to China's adversaries.
I have previously argued that the conflict in Ukraine is a precursor to muscular action against China. In this post I am going to analyse how China stands on various metrics and pursue a line of enquiry that investigates the possibilities for economic rather than military action.
To be clear about my overall stance, I prefer a multi-polar world, which no one country dominates. I would prefer no war to any kind of war. But I also believe that we are not currently in any kind of equilibrium. China is becoming more powerful and sees no need to rein in its ambitions and other developed countries see that as a threat to their long-run welfare. As a result, some kind of activity is likely.
This post contains the conclusions to the analysis undertaken by chatgpt, replies to this post will have the analysis itself, for purposes of transparency.
I gave Chatgpt the following prompt.
QuotePlease run through the analysis for the proposition that given its population size, level of historic economic growth and innovation, China has now passed beyond the tipping point where it will dominate the world economy regardless of any actions other nations can take.
This is the conclusion to its analysis:
Quote
While China has made tremendous strides in economic growth, innovation, and global influence, several factors determine whether it has irrevocably passed the tipping point:
1. Population and Market Size: China's large population provides a competitive edge.
2. Sustained Economic Growth: China's growth rate, though slowing, remains higher than that of many developed economies.
3. Innovation Drive: Significant investments in R&D and education position China as a leader in technological advancements.
4. Global Strategy: Initiatives like the BRI enhance China’s influence.
However, significant challenges such as an aging population, debt levels, and geopolitical tensions could affect its trajectory. While China is well-positioned to be a dominant global economic force, it is not entirely invulnerable to actions by other nations or internal constraints.
Thus, while China may be on a path towards significant global economic influence, it is not an absolute certainty that it will dominate regardless of other nations' actions. The interplay of global dynamics, policy decisions, and unforeseen events will continue to shape the future economic landscape.
I then asked the following question:
QuoteHow does the size of China's corporate and local government debt compare to the assets and liabilities of the national government and how much would the balance sheet of the latter be impacted by the size of any bailouts?
This was the conclusion to its analysis
QuoteThe size of China's corporate and local government debt is substantial relative to the national government’s assets and liabilities. A large-scale bailout would significantly impact the national government’s balance sheet, doubling or even tripling the national debt-to-GDP ratio. This scenario underscores the importance of managing corporate and local government debt prudently to avoid severe fiscal consequences.
So i asked the following question:
QuoteHow could foreign actors leverage the corporate and local government debt so as to cause problems for the Chinese government, without having to resort to warfare?
This was the answer:
QuoteForeign actors have multiple non-military avenues to leverage China’s corporate and local government debt to cause significant economic and financial challenges. These strategies focus on undermining confidence, increasing borrowing costs, and reducing revenue streams for Chinese entities. While effective, these measures could also have global economic repercussions, given China's central role in the world economy.
To expand a little on the above, chatgpt sees a range of measures being likely including many that are already being implemented. These include restrictions on imports from China, encouraging investment overseas by Chinese individuals and so on.
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