Comments on Joseph Nye “China’s bad bet against America”, 28/03/2010, http://www.eastasiaforum.org/2010/03/28/chinas-bad-bet-against-america/
After reading the article I looked at the credentials of the author and noticed that "Joseph Nye is Chairman of the Pacific Forum CSIS Board of Governors and a former US Assistant Secretary of Defence. He is also currently University Distinguished Service Professor at the Harvard Kennedy School."
I would like to make a few comments as follows.
Firstly, a few variables in elementary physics in terms of speed, acceleration and different momentums. It is not enough to just discuss the speed of an object without considering its acceleration that is the rate at which its speed changes. I am not sure Nye had this in mind or not when he was talking about a number of things.
Secondly, many economists and commentators talk about the yuan versus $US as if the issue was just between China and the US and ignore or are ignorant about a wider international context. In fact, as some economists and commentators have pointed out, the matter is much more complex than the former group or people naively think. It involves, I would argue, mainly competitions between China and other countries than the US. Yes, if the yuan was appreciated that will have an effect on the relative competitiveness between China and the US, but it is unlikely to change the imbalances the US has been having, because others would simply take the vacuum vacated by China and increase their surplus with the US.
Thirdly, some of the historical events that Nye has mentioned were obviously true, but has he noticed and considered the differences now and the past, that is, between China and the USSR, as well as Japan? Don’t the huge differences in sizes of population and potential economic power and its implications ring a warning to Nye’s analysis and his simply and mechanically using historical examples? Will history always simply repeat itself like natural mechanics, or new history can be made? Had the US always been asa powperful as it is now before, say the last century? Are humans still as primitive as many tens of thousand years ago? Don’t those people also need to catch up with reality?
I do not wish to comment on the decline of the US. It is still the sole superpower in the world now. But it has had problems with the Iraq and Afghanistan wars. Its military capabilities can be very powerful in destruction, but not necessarily very constructive. If taking into account the sizes and powers of those two countries, the US, as that powerful as it has been, is not that invincible as some people might think it is. That is an irony and should be respected perhaps. Maybe the first point that I have just made has some relevance here. Einstein’s relativity will work in static and dynamic senses.
Fourthly, the role of the $US internationally should never be underestimated, but at the same time many people have realised the limitations of the current or the past arrangement or state of play. In economics, people take expectations very seriously. In that context, what expectations will people have, if a model of the world economy is taking into account? What implications will that have for international currencies?
However, I don’t want to leave people with an impression that I have nothing in common with Nye. I do want to reach an agreement with Nye, that is, the cooperation between China and the US will be win-win and beneficial to both countries and the world as a whole. That is human spirit. We have come a long way in terms of globalisation and human beings should not move backwards toward barbarous state where power rather than rationality prevailed.