Interesting - China putting new restrictions on exports of rare earth minerals - heard explanation for this that I hadn't heard before and is the one that seems to make the most sense - they want to force companies who depend on these metals to locate their production facilities in China - suggestion made that this motivation behind recent mega deal GE just made with China - it's a startling and disturbing dynamic - since all companies who deal in rare earth metals are high tech not only does China manage to add to its soaring industrial base but it also, probably more importantly, gains access to coveted technology. I know people like to think or imagine or fool themselves into believing that these shifting currents may rock a few boats but need not send anyone hurdling overboard into dark and deadly waters - but I just don't see it - not that I can put this foreboding into any concrete terms at the moment - it's really just a feeling in the bones - but this massive and, in relative terms, precipitous transfer of wealth and technology and jobs from the democratic West to the autocratic East, that at best is simply a function of neo-mercantilism and greed operating beyond the purview of the voting public and potentially against their best interests or at worst a devious plot to undermine US power - tell me, how on earth does this possibly not lead eventually to either confrontation or appeasement or outright surrender?
Related - China has rolled out prototype of fifth generation fighter. Just in the last month it has been revealed that China has developed a new ballistic missile with much improved guidance system, have started work on a second aircraft carrier, and now have a fifth generation fighter [or, given its size, possibly a bomber] in the pipeline. None of these developments were mentioned in recent Pentagon analysis of current state of China's military. Reminds me of an argument I had recently with a liberal trying to make case that since relative to US China's defense expenditures are quite modest ours should accordingly be significantly trimmed - I countered that: one, the particulars and fundamentals of our long term strategic goals are different from theirs and therefore you can't measure capabilities strictly in terms of dollars and cents; two, how does one quantify what 50 billion buys you in China versus what it gets you in the US when it comes to military capacities; and, three, regardless of that we have absolutely no idea what China actually spends on the military - all we know for sure is that what they say they spend is a lie. On that last point at least seems I was right.
Watch to see if Russia ends up supplying the engine for this J-20 stealth fighter - if so would mean they have given up trying to compete with China as the go to source for America's enemies of military technology and are just going to get what cash they can out of the mugging - since they know what ever engine they supply is simply going to be reverse engineered and then replaced - or it could mean they've entered into an interesting partnership with China that will almost certainly complicated American interests down the road.
update: WSJ has article up about the huge GE deal - no mention of role played by access to rare earth metals - but skinny is that GE has essentially handed all of its civilian aviation technology and manufacturing expertise over to the Chinese in a joint venture with China's new commercial jet company in the hopes that this will give them access to the Chinese market and all the other markets China has influence over [all those places that hate America]. Essentially, GE has sold its soul to China Inc for a boat load of cash, access to vast amounts of easy credit and the hope that China Inc will not completely screw them over a few years down the road once they've mastered the technology and manufacturing techniques. Boeing must be just thrilled by this because you know sure as shit once China has a reputable commercial jet, subsidized by the gov't, that can be manufactured at a fraction of Boeing's costs, that not only will Boeing never have equal access to the Chinese market but they will also start to be squeezed out of markets across the globe.
Look, I don't know nearly enough about business on this massive scale to pass judgement on how sound or unsound the deal is - but, c'mon, does anyone really believe that this is about anything other than GE, no doubt worried about a competitor making this deal if they don't, taking the short term benefit of the upfront cash and then embracing the long term delusion that China Inc can be trusted not to screw them over? Haven't they just sold China a pretty new knife and now get to wake up every morning hoping it won't be turned on them or every other American business that stands to lose from deals like this? Do we now see Boeing and Airbus make similar deals thinking, we don't trust them but if they develop a viable commercial jet company we're screwed no matter what so might as well take a chance and hope it pays off? Worst case scenario, what happens to the advantage America has and is completely dependent on in defense technology if cheap Chinese jetliners do to Boeing and related high tech industries what cheap Japanese cars did to GM and Ford? And take the military factor a step further: why should America continue to spend billions on a powerful military stretched across the globe to ostensibly serve and defend its interests if the chief beneficiary of this largesse and sacrifice turns out to be China? And if they conclude that indeed it makes no sense, what happens then? Can anyone actually see China stepping up and filling the role America holds now on the international stage? And even if they do, to what end and for the benefit of whom? America? Or petty dictatorships in Africa, the Middle East, South America, Eurasia? The bargain the world made or was asked to make with America was: embrace freedom, democracy, open markets and as we prosper, you'll prosper too [yes, the actual arrangement was a wee bit messier than that, but the underlying principle still promised far more positives than negatives over all]. What message is China sending to the rest of the world that is in any way comparable to that? The message China is sending is: if you're an autocracy and have a large pool of poor to draw cheap labour from, here's a way you can get rich - but wait, on second thought, we still have one hell of a lot of poor here in China that need something to do... and the decadent West can only buy so much crap... so why don't all you autocratic pricks out there just sit tight and in exchange for the buckets of cash we'll send your way you'll give us your natural resources and promise to keep your mouths shut.
Naw, I'm not liking any of this.
