Watch out, George, Here comes China

Tonight, George W Bush delivers his annual State of the Union Address. Amongst the topics he will no doubt dwell at length upon, will be the problem of China. For the US, China really is becoming a problem.

Based on statistics for 1993-2002, during which time China’s exports increased at an annual rate of just over 17%, the country will exceed US exports by 2010. You can bet your bottom dollar the panic button was pressed in the US some time ago.

In the opening of his book Being is Enough: Collective Self-Help for a Sustainable World , Doug Brown (Professor of Economics at North Arizona University) writes:

“…the Chinese are doing a pretty remarkable job of growing their way to American affluence. But it’s not sustainable. For their 1.3 billion citizens to live like the average North American would require the carrying capacity of about four more planets.”

I was reminded of this poignant quote when reading a lengthy piece tucked away inside The Guardian’s Society supplement last week. Lester R Brown, president of the Earth Policy Institute examined the consequences of China’s population devouring at the rate of their American counterparts.

Lester Brown writes: “China has now overtaken America as the world's leading resource consumer. Among the basic commodities - grain and meat in the food sector, oil and coal in the energy sector and steel in the industrial sector - China now consumes more of each of these than the US except for oil. It consumes nearly twice as much meat - 67m tonnes compared with 39m tonnes in the US; and more than twice as much steel - 258m tonnes to 104m.”

China also, incidentally consumed 31% per cent of the world’s coal in 2003, and accounted for a 40 per cent increase in world oil demand in 2004. In the past 10 year’s its consumption of aluminium, copper and nickel has doubled to 20 per cent of the world total.

It is reckoned that China will have the same oil demands as the US within 20 years and India will not be far behind.

Lester Brown notes: “If China were to have three cars for every four people – as in the US – it would use 99 million barrels a day. The world currently produces only 84 million Barrel’s a day.”
Lester Brown further sees the important questions as “…what if China's consumption per person of these resources reaches the current US level, and how long will it take for China's income per person to reach the US level?”

Indeed, Lester, a mega-problem of global sustainability to boot; but consider also that China’s foreign exchange reserves last year were in excess of $750 billion and are estimated to hit the $1 trillion mark by mid 2006. What is preventing the collapse of the US dollar and the rise in US interest rates is China’s purchase of US treasury bonds.

Chomsky notes: "China is already establishing relations with Iran -- and even with Saudi Arabia, both military and economic. There is an Asian energy security grid, based on China and Russia, but probably bringing in India, Korea and others. If Iran moves in that direction, it can become the lynchpin of that power grid."

There is another important question – just how long will the US tolerate such a powerful economic competitor threatening the profits of corporate America, a competitor who could collapse the US dollar and a competitor on real cosy terms with the anti-American leadership in Iran and Venezuela?

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