The Panicky Eagle Circles the Dragon

China’s premier, Wen Jiabao, has thrown the U.S. press and Congress into a tizzy with statements at his annual meeting with the press. The New York Times grumbles on page one that China is employing the dastardly tactic of "using the rules" of international trade to its own advantage. Paul Krugman, an increasingly strident economic chauvinist, in a column titled "Taking on China" bellows that "something must be done." China is threatening the world’s recovery from crisis, he cries, omitting the facts that said crisis was engineered on Wall Street right here in the good old USA and that China has produced a stimulus package in a timely fashion which has arguably done more than anything else to jerk us back from the brink of Depression. Calling for a 25 percent punitive tariff on Chinese goods, Field Marshal Krugman seems bent on leading us into economic warfare with the awful consequences that may entail. Nor did General Krugman mention that roughly 60 percent of China’s exports are made in U.S. owned enterprises there, a phenomenon to which Paul Craig Roberts has repeatedly called attention. Within hours, 130 members of Congress, from both wings of the Ruling Party, reliable soldiers in the economic war envisioned by Krugman, acting with uncharacteristic speed, released a letter calling for the same kind of damaging tariffs.

To get relief from all this hyperventilating and to gain some perspective on the place of China and the U.S. empire in the world, let’s look at some numbers. The annual global total of national GDPs is now about $60 trillion dollars. That of the U.S. is about $14 trillion, a staggering one quarter of the total, of which at least $1 trillion is spent on "national security," mostly on the Pentagon’s tools of war. The second and third largest national GDPs on the planet are those of Japan and China, at a little less than $5 trillion each, and together only about two thirds of the U.S. total. Thus, the U.S. empire rests on a fabulously wealthy economy, a testimony to the unmatched power of capitalism. The U.S. economy is way out in front and will remain so for a long while, barring a major unforeseen calamity. Even more enlightening is a per capita comparison of GDPs. Since China’s population is roughly four times that of the U.S. its per capita GDP is about 10 percent that of the U.S. No wonder Wen Jiabao made the point that it will take 100 years before China reaches the developmental level of the rich Western countries. China is no longer as dirt poor as before its revolution, but it is not rich; and for the U.S. to go after such a country with a living standard far below its own smacks of very ugly bullying and cruelty.

Equally inescapable in such consideration of the place of China and the U.S. is the weight of thousands of years of culture. In the case of Europe and the U.S., that culture has been imperial and colonial. When Columbus set out on his voyages, a whole new epoch in European expansionism was opened up. The United States joined this overseas plunder in a decisive way at the 19th century’s end in the Spanish-American war with the annexation of Cuba, Hawaii, and, most violently and notably, the Philippines.

China, in marked contrast, has a history of defensiveness spanning many millennia after the consolidation of the Middle Kingdom. China always had to contend with invaders from without, usually from the North and West, a fact that molded its mentality. The final invaders, however, came by sea from the East, from Europe and America. But almost a century before Columbus set sail, the Ming emperor sent out the navigator Zheng He at the head of a fleet of 200 ships, which dwarfed the puny vessels sailed later by European explorers. Over 28 years Zheng reached 30 countries, including India, the East African coast, the Red Sea, and perhaps far beyond. But the Chinese did not colonize, much less conquer. The Chinese have always been avid traders but not conquerors. The Silk Road and not Crusades were the mark they left on Eurasia.

While General Krugman and his equally rabid troops in Congress cry out that China threatens the U.S., quite the opposite is the case. Of this there can be little doubt. The declared policy of the U.S. is to dominate the globe militarily and economically. In fact, these two goals cannot be separated, since wealth is the key to military power. But, consistent with its history of adopting a defensive posture, China shows no inclination so far to pursue military dominance. China’s present policy is to have no overseas military bases, and it has none. And of course military expenditure is at odds with investment that raises the standard of living, the mandate that the Chinese government has accepted to retain the Mandate of Heaven.

U.S. policy is to "contain" China. What precisely does this mean? In the economic realm it apparently means tariffs or worse. In the military realm, always the U.S. empire’s strong suit, "containment" means placing a Great Wall of alliances and military bases around China. In this context the U.S. wars in Central Asia take on a meaning beyond the simple goals of gaining access to energy reserves and laying waste as many Arab and Muslim lands as possible, converting them into client states in order to satisfy Israel’s demands. Some in the Chinese military have expressed increasing alarm about this development. But over and above this crescent of U.S. bases and alliances in Central Asia, a military confrontation if one were to come requires a U.S. ally with a vast reserve of manpower. Hence, aided by Israel, the U.S. is developing an ever deepening alliance with populous and poverty-stricken India, 1.1 billion strong, as Vijay Prashad documents in his excellent book, Namaste Sharon. China is trying to thwart this alliance by the tactic of developing tighter commercial ties with India. Here China pursues the libertarian prescription that armies do not cross borders when trade does. But to set India against China militarily would involve human suffering and slaughter on a scale worse than World War II.

In sum, to remain number one economically, the U.S. has no choice but to halt China’s development or slow it to a crawl by whatever means. One way would be to choke off its energy supplies. Another would be to force upon it crippling military expenditures. Or both. While it is true that China’s economy is less than a third of the U.S.’s, China’s growth rate is much greater. Again, do the numbers. If China can grow at the rate of 8 percent per year and the U.S. at 3.5 percent, then in 25 years China will slip ahead of the U.S. economically. Impossible? Perhaps, but China has a giant internal market with enormous demand which has the potential to sustain high growth rates for a long time. Twenty-five years is an eye blink in history, and certainly U.S. planners and strategic thinkers know that the time is short to stop China in its tracks.

But such an effort, if successful, will leave the per capita GDP of China at very low levels. So for the U.S. empire to remain number one, it must ensure that the one fifth of humanity who occupy the Middle Kingdom be kept in poverty, cut off from the higher living standards enjoyed by the West. Whatever way one looks at it, that policy is a colossal crime against humanity, whether pursued militarily or "simply" by economic means.

Author: John V. Walsh

John V. Walsh writes about issues of war, peace, empire, and health care for, Consortium News,, The Unz Review, and other outlets. Now living in the East Bay, he was until recently Professor of Physiology and Cellular Neuroscience at a Massachusetts Medical School. John V. Walsh can be reached at