Econ Decline--China/Taiwan War

Econ Decline--China/Taiwan War

Declines in China’s economic growth rate would lead to a number of impacts—global recession, civil unrest, and war with Taiwan

[Dan Lewis, “The nightmare of a Chinese economic collapse”, 5/13/08, http://www.worldfinance.com/news/finalbell/article117.html]

China-Taiwan conflict goes nuclear

O’Hanlon, Senior Fellow in Foreign Policy at Brookings Institution, 5

[Michael E. O’Hanlon, , “The Risk of war over Taiwan is real”, 5/1/05, http://www.brookings.edu/opinions/2005/0501asia_ohanlon.aspx]

Does it really matter, in the end, what Europe does about its arms embargo on China? Robert Zoellick, US deputy secretary of state, recently suggested that for the European Union to sell arms or related technologies to China would amount to painting bull's-eyes on the backs of US troops. For many Europeans, such arguments may seem hyperbolic. Now that China has been slapped on the wrist for its antisecession law threatening war if Taiwan moves actively for independence, the EU will want to return to the issue at some point and lift its embargo. And Britain, which takes over the six-month EU presidency in June, will only be able to hold off such pressures for so long. The recent friendly visit by Lien Chan, the Taiwanese opposition leader, to mainland China may also suggest that the risk of war, and therefore the stakes in the EU arms embargo issue, are both rather low. Nonetheless, Mr Zoellick is more right than wrong. In the absence of strong constraints on future high-technology sales, lifting the European arms embargo on China would be a big mistake. There really is a chance of a Sino-US war over Taiwan, which may ebb and flow month to month but nonetheless remains quite real. And any European decision to lift the embargo could make any war more likely and more costly in lives and assets. The reasons are simple. First, China is serious about being willing to risk war to prevent Taiwan's secession. Second, although many in China as well as Europe cannot quite believe it, the US is just as serious about defending Taiwan. And third, even though American military power remains far superior to that of China, the Chinese do not need to equal US power to make any war over nearby Taiwan very challenging for American forces. Given the right catalyst from Taipei, therefore, US deterrence of China could fail and the world's first true war between nuclear weapons states could ensue. It is not just China's ruling communist party that considers Taiwan a part of China; an increasingly nationalistic population does as well. In fact, the Chinese see themselves as patient and restrained because they are simply demanding that Taiwan not secede, rather than insisting on immediate reunification. They worry that if Taiwan broke away, it would encourage other separatist movements in places such as Tibet and Xinjiang province, and weaken China strategically at the very moment it is poised to regain its status as a global power. China's leaders operate on the assumption that Taiwanese secession would doom their own prospects for holding on to power. At a minimum, they would have to show they had gone the extra mile to try to prevent secession, meaning that even an unsuccessful military operation might be preferable to inaction.

Econ Decline--Competitiveness

US competitiveness is at a crisis point—continued decline will be devastating

Koba, Senior Editor at CNBC, 11

[Mark, 9-12-11, “American Economic Decline? Exaggerated,” http://www.cnbc.com/id/44271677/American_Economic_Decline_Exaggerated,]

With a recent ratings downgrade, chronic unemployment, a growing budget deficit and a political system that seems determined to self-destruct, it might appear that the U.S. is losing its grip as the world's top economic power. That's not to say that the U.S. shouldn't look over its shoulder. Many countries, specifically China, have long been gaining economic strength. "China has had high growth rates for over 30 years," says Frank Lavin, CEO of Export Now and a former U.S. ambassador to Singapore. "Their ability to sustain those rates combined with the softness in the U.S. economy gives rise to speculation that China will surpass the U.S and assume economic leadership on international issues." With China's GDP rate at around 8 percent to 11 percent a year, and the U.S. stuck at around 2 percent to 3 percent, it's easy to see why some say China's economy will be larger than the U.S. economy by 2016. China isn't the only growing economic force on the horizon, say experts. "The largest change over the last 10 to 15 years has been the growth of emerging markets," says Thomas Root, associate professor in finance at Drake University. "The BRIC countries capture the headlines, but many smaller countries, like some in South America and Asia, are having an increase in production." "The European Union and Germany in particular are the most formidable threats to the U.S.," Massey University's Haley adds. "They are big enough countries to be threats even as they struggle." America's battle to get its own economy growing at a faster pace opens the door for others, analysts point out. "Perhaps the most damning evidence [of potential American decline] is the unemployment rate of around 9 percent," explains Adrian Cronje, a partner and Chief Investment Officer at Balentine, a worldwide investment firm. "The question is whether large segments of the U.S. workforce are sufficiently skilled and productive to compete and drive future economic growth." There's also the falling value of the dollar that could help knock the U.S. off its perch, Cronje argues. "The U.S. dollar is in danger of losing its status as a safe haven for investors," Cronje says. "It's been in a long term bear market against hard assets like gold, and that decline reflects a decline in economic power." If the U.S. did lose its number one position, that would have global implications, according to Northeastern University's Dadkhah. "For the U.S., it would mean a lower standard of living and less power to influence international events," Dadkhah explains. "And America is the pole holding up the tent of international finance. It the pole falls, we'd have a period of uncertainty and upheaval on a worldwide scale." But what currently ails the U.S. is also hitting the rest of the world, according to analysts. Nations that for now seem to be riding a faster economic track will have likely have troubles of their own, says Roger Scher, professor of international political economy at Seton Hall University. "History has shown us that economic success stories turn sour," explains Scher. "Witness poorly growing Brazil and Peru, and Europe's bust in recent years. And watch out for China's potential property price bubble. It's huge and brings considerable political risk." As tempting as it may be to gloat over other countries' economic declines, analysts say the U.S. has plenty of work to do in order to remain a viable leader. "We need long-term plans to cut the deficit and reduce entitlement and defense spending," says Seton Hall University's Scher. "At the same time, we need to invest in education and infrastructure, and cut tax loopholes." In the end, say analysts, the U.S. should ultimately focus on its own economy and leave the question of who's number one to history. "It's always trendy to speak about the decline of the U.S.," says Sizemore Investment Letter's Sizemore. "I'm not sure it really matters that much. Other countries are beating us with faster growth, but they're starting at a lower base."

Competitiveness prevents great power nuclear war.

Khalilzad, former United States ambassador to Afghanistan, Iraq, and the United Nations and the director of policy planning at the Defense Department from 1990 to 1992, 11

[Zalmay Khalilzad was, “ The Economy and National Security”, 2-8-11, http://www.nationalreview.com/articles/print/259024]bg

We face this domestic challenge while other major powers are experiencing rapid economic growth. Even though countries such as China, India, and Brazil have profound political, social, demographic, and economic problems, their economies are growing faster than ours, and this could alter the global distribution of power. These trends could in the long term produce a multi-polar world. If U.S. policymakers fail to act and other powers continue to grow, it is not a question of whether but when a new international order will emerge. The closing of the gap between the United States and its rivals could intensify geopolitical competition among major powers, increase incentives for local powers to play major powers against one another, and undercut our will to preclude or respond to international crises because of the higher risk of escalation. The stakes are high. In modern history, the longest period of peace among the great powers has been the era of U.S. leadership. By contrast, multi-polar systems have been unstable, with their competitive dynamics resulting in frequent crises and major wars among the great powers. Failures of multi-polar international systems produced both world wars. American retrenchment could have devastating consequences. Without an American security blanket, regional powers could rearm in an attempt to balance against emerging threats. Under this scenario, there would be a heightened possibility of arms races, miscalculation, or other crises spiraling into all-out conflict. Alternatively, in seeking to accommodate the stronger powers, weaker powers may shift their geopolitical posture away from the United States. Either way, hostile states would be emboldened to make aggressive moves in their regions. As rival powers rise, Asia in particular is likely to emerge as a zone of great-power competition. Beijing’s economic rise has enabled a dramatic military buildup focused on acquisitions of naval, cruise, and ballistic missiles, long-range stealth aircraft, and anti-satellite capabilities. China’s strategic modernization is aimed, ultimately, at denying the United States access to the seas around China. Even as cooperative economic ties in the region have grown, China’s expansive territorial claims — and provocative statements and actions following crises in Korea and incidents at sea — have roiled its relations with South Korea, Japan, India, and Southeast Asian states. Still, the United States is the most significant barrier facing Chinese hegemony and aggression. Given the risks, the United States must focus on restoring its economic and fiscal condition while checking and managing the rise of potential adversarial regional powers such as China. While we face significant challenges, the U.S. economy still accounts for over 20 percent of the world’s GDP. American institutions — particularly those providing enforceable rule of law — set it apart from all the rising powers. Social cohesion underwrites political stability. U.S. demographic trends are healthier than those of any other developed country. A culture of innovation, excellent institutions of higher education, and a vital sector of small and medium-sized enterprises propel the U.S. economy in ways difficult to quantify. Historically, Americans have responded pragmatically, and sometimes through trial and error, to work our way through the kind of crisis that we face today.

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