Japan, China and the future

Mar 17, 2011 11:58

Recent events in Japan and elsewhere have left me sad and apprehensive. I'm looking beyond the unfolding nuclear disaster - no point worrying about what is a certainty. Only thing in question about that matter is how much more insanely bad that is going to get.* No, I'm thinking about how the events in Japan will serve as a tipping point in the shift of geopolitical power.

Japan is the #3 world economic power. That status is taking a big, long-tern hit right now. Thousands dead, billions of dollars in damage. They will recover in time, but in the meanwhile others will step in to fill the gap. Count on China to take the lead. Japanese firms will shift productivity by increasing existing operations, and establishing new ones, overseas. Since they, like so many other nations, have outsourced large chunks of their operations to China, Japan will to some extent count on them to rebuild itself. But, what happens once Japan is ready to resume its own productivity - do you think China will gladly step aside? They already passed Japan in volume (if not quality). Markets may be lost forever.

This of course leads to those expressions of failing economics: Politics and Military Expansion. Japan has no real standing army, but there is a sizable American presence there. China has been bulking up its military, obtaining new hardware such as aircraft carriers and attack fighters emblematic of expansionist policies. Their actions of late have shown an increasing desire to flex muscle and rattle sabres to assert regional dominance. Would the Chinese see opportunity in crisis, and insist as a concession that any aid package for Japan include a decrease of American military presence? We might complain, even offer a package of our own (which would certainly boost American productivity), but considering how much American debt China now holds, they could counter with economic pressure on America. Such a fiscal attack would hurt China as well, but they are long-term thinkers, and would be wiling to absorb the hit to make sure we backed off.

I'm not even taking India or Russia into account here. They can't be ignored, but time restricts comment until another post. Suffice to say this is the first Big Event for the new regional power shift, the new Asian paradigm.

More on this later.

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* = Though it still leaves me gobsmacked to think of the idiocy of the situation. Water pumps for a plant in danger of tsunami floods located in the basement? Spent fuel rods stored in a pool above the reactors!? Venting hydrogen gas in the building?? I for one hope the brain trusts responsible for such decisions, if they are still alive, decide to restore the honor of their families in the traditional way, of you get my drift.
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