The Economic Impact of a War Between Japan & China

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“The United States believes that the establishment of diplomatic relations with the People’s Republic will contribute to the welfare of the American people, to the stability of Asia where the United States has major security and economic interest, and to the peace of the entire world.”

President Jimmy Carter
The American Presidency Project. December 15, 1978

 

Unfortunately, this is not a conspiracy theory.  2013 is a decisive year to deter the escalation of a war between Japan & the People’s Republic of China.  Who can stop it? According to this impressive video, the United States of America has a decisive role to play in this global arena.

A major conflict between the region’s two largest economies would not only impose a harsh dilemma on U.S. diplomats, but also have a significant impact on the entire global economy. It is in every nation’s best interest that the Chinese and Japanese settle their territorial dispute peacefully.

The team at One Minute MBA explains that

“The conflict between China and Japan has put the United States in a precarious position: if a full-scale war were to erupt, the U.S. would be forced to choose between a long-time ally (Japan) and its largest economic lender (China). Last year, China’s holdings in U.S. securities reached $1.73 trillion and goods exported from the U.S. to China exceeded $100 billion. The two countries also share strong economic ties due to the large number of American companies that outsource jobs to China.

However, the U.S. government may be legally obligated to defend Japan. In November, the U.S. Senate added an amendment to the National Defense Authorization Act that officially recognizes Japan’s claims to the disputed islands; the U.S. and Japan are also committed to a mutual defense treaty that requires either country to step in and defend the other when international disputes occur. Not honoring this treaty could very easily tarnish America’s diplomatic image.

The countries of the Asia-Pacific region are collectively responsible for 55 percent of the global GDP and 44 percent of the world’s trade. A major conflict between the region’s two largest economies would not only impose a harsh dilemma on U.S. diplomats, but also have a significant impact on the entire global economy. It is in every nation’s best interest that the Chinese and Japanese settle their territorial dispute peacefully.”

To read the entire video transcript please visit this link.

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For All the Tea in China

22 February, 1784: The first American trade ship to China weighs anchor in New York City. The history of trade between China and the West is fraught with conflict and cultural complications, as demonstrated by the audacious 19th-century attempt by the British to steal China’s tea crop and transplant it to its own plantations in India. The caper is recounted in Sarah Rose‘s FOR ALL THE TEA IN CHINA.

In the dramatic story of one of the greatest acts of corporate espionage ever committed, Sarah Rose recounts the fascinating, unlikely circumstances surrounding a turning point in economic history. By the middle of the nineteenth century, the British East India Company faced the loss of its monopoly on the fantastically lucrative tea trade with China, forcing it to make the drastic decision of sending Scottish botanist Robert Fortune to steal the crop from deep within China and bring it back to British plantations in India. Fortune’s danger-filled odyssey, magnificently recounted here, reads like adventure fiction, revealing a long-forgotten chapter of the past and the wondrous origins of a seemingly ordinary beverage.

22 February, 1784: The first American trade ship to China weighs anchor in New York City. The history of trade between China and the West is fraught with conflict and cultural complications, as demonstrated by the audacious 19th-century attempt by the British to steal China's tea crop and transplant it to its own plantations in India. The caper is recounted in Sarah Rose's FOR ALL THE TEA IN CHINA: http://bit.ly/Zn5SltIn the dramatic story of one of the greatest acts of corporate espionage ever committed, Sarah Rose recounts the fascinating, unlikely circumstances surrounding a turning point in economic history. By the middle of the nineteenth century, the British East India Company faced the loss of its monopoly on the fantastically lucrative tea trade with China, forcing it to make the drastic decision of sending Scottish botanist Robert Fortune to steal the crop from deep within China and bring it back to British plantations in India. Fortune's danger-filled odyssey, magnificently recounted here, reads like adventure fiction, revealing a long-forgotten chapter of the past and the wondrous origins of a seemingly ordinary beverage.

Is Globalization finally saying “STOP!” to the Catholic Church?

https://i1.wp.com/www.catholicworldreport.com/Content/Site140/Articles/05_01_2009/724PopeBenedict_00000000427.jpgAfter only seven years as Head of the Catholic Church, the resignation of Pope Benedict XVI is an astonishing news.  This may be a message on how Globalization affects such global organization.  The election of Pope Benedict XVI followed all the rules of the Church but did not listen to the “new” rules imposed by globalization: which include good advertisement, global awareness, and above all intercultural appealing to standards of ‘universal friendliness and empathy’, among others.  I wrote an article titled “Parishes Fail to Market Catholicism to Hispanics (pdf available here)” (National Catholic Reporter, Vol. 43, No. 12 2007) discussing how the Catholic Church has failed to Market Catholicism among Hispanics.

Benedict XVI was elected on 19 April 2005 in a papal conclave, celebrated his Papal Inauguration Mass on 24 April 2005, and took possession of his cathedral, the Archbasilica of St. John Lateran, on 7 May 2005. Today, February 11, 2013, Benedict announced that he would resign the papacy, effective February 28, due to age and ill health.

His health may be have been an issue.  However, it seems to me that the real problem started when the Papal conclave of 2005 elected him above the other contestants for the Pope position without taking notice of all the changes that institution has gone through centuries.

Currently, Catholics are 17.77% of the total population in Africa, 63.10% in the Americas, 3.05% in Asia, 39.97% in Europe, 26.21% in Oceania and 17.09% of the world population. (Further information: Catholicism by country)

Distribution of Catholics by World Region, 2004, 2025, and 2050
Note: Percentages may not add to 100% due to rounding.
Source: Author’s calculations based on data from PRB’s World Population Data Sheet 2004 and accessed at http://www.catholic-hierarchy.org.

Globalization is slowly forcing them to adapt to this new demographics and the election of a Latin American (a Mediterranean look would suffice) or African Pope could bring some new Fresh air to this archaic institution.  The Latin America region already represents 42 percent of the world’s 1.2 billion-strong Catholic population, the largest single block in the Church, compared to 25 percent in its European heartland.

In 2005 among the “popeable” (one who might become pope) where also the cardinals Carlo Maria Martini, who died last year and obtained 40 votes in the first ballot versus the popular Italian cardinal Camillo Ruini who also was a contestant for the position in that initial ballot.  Cardinal Ruini has been very active in the mass media and was one of the cardinals who most often appeared on Italian television, newspapers and magazines.  I would suppose that his election as a new Pope in the Conclave of cardinals that will choose the next pope in mid-March is very high.  Camilo Ruini is very popular among the “Reformer” side of the Catholic Church as the news inform (he is also more photogenic and could appeal to the Hispanic followers easily).

Lets see what happens in March, 2013 with the new Papal Conclave.  Meanwhile, I share with you a documentary on the new face of this Eurocentric organization that is finally (slowly) changing its own look!

The Catholic Church and Africa

A Satellite’s View of Ship Pollution and globalization

Cargo-Ship650The geographical hotspots of the world are all related to economic trade and global exchange of political interests. Places such as the Panama and Suez Canals have always been in the Western media. However, from an economic and strategic perspective, the Strait of Malacca is one of the most important shipping lanes in the world in the 21st Century. The history of this Strait’s geopolitical relevance goes as back as 400 years of history.

For centuries the strait has been the main shipping channel between the Indian Ocean and the Pacific Ocean. It has been controlled by the major regional powers and also by the mayor global power during different historical periods. In 2011 hundreds of thousands of containers in more than 60,000 vessels crossed its waters carrying about one-quarter of the world’s traded goods including oil, Chinese manufactures, and Indonesian coffee.

In order to understand which is the geopolitical importance of the Strait of Malacca for the Chinese government we need to overview the current geopolitical dynamics and economic investments in the region.

The following image from NASA clearly depicts what are some of the IMPRESSIVE negative externalities caused by the transport of global goods in the region and opens the door for discussing

  • How can we fix this?
  • Who should fix it?
  • Can it be fixed?
  • Can we reduce the future impacts in the area?
  • What solutions are available?
A Satellite’s View of Ship Pollution

Color bar for A Satellite’s View of Ship Pollution
acquired 2005 – 2012 download large image (2 MB, JPEG, 1800×1800)

Elevated levels of nitrogen dioxide pop out over certain shipping lanes in observations made by the Aura satellite between 2005-2012. The signal was the strongest over the northeastern Indian Ocean.

Data from the Dutch and Finnish-built Ozone Monitoring Instrument (OMI) on NASA’s Aura satellite show long tracks of elevated nitrogen dioxide (NO2) levels along certain shipping routes. NO2, is among a group of highly-reactive oxides of nitrogen, known as NOx, that can lead to the production of fine particles and ozone that damage the human cardiovascular and respiratory systems. Combustion engines, such as those that propel ships and motor vehicles, are a major source of NO2 pollution.

To learn some more on the importance of the Strait of Malacca and the value of this shipping lane you can read the essay I wrote titled “The Strait of Malacca as one of the most important geopolitical regions for the People’s Republic of China. Download (.pdf)

Terracotta vase in the form of a lobster claw

Visiting history museums is one of my favorite activities.  There, one of the things that I appreciate the most is learning about the paintings they have in vases and other pottery utensils from Ancient Greece. Why? Because of its relative durability, pottery comprises a large part of the archaeological record of Ancient Greece, and since there is so much of it (some 100,000 vases are recorded in the Corpus vasorum antiquorum), it has exerted a disproportionately large influence on our understanding of Greek society.

Take a look to this wooooonderful work that I found in the website of The Metropolitan Museum of Art.

Terracotta vase in the form of a lobster claw
Attributed to the Class of Seven Lobster-Claws

Period: Classical
Date: ca. 460 B.C.
Culture: Greek, Attic
Medium: Terracotta
Dimensions: Overall: 2 3/4 x 2 7/8 in. (7 x 7.3 cm)
Other: 6 1/4in. (15.9cm)
Classification: Vases
Credit Line: Rogers Fund, 1923
Accession Number: 23.160.57

Satellite images of negative externalities caused by Globalization

I always keep track of the images from space taken by NASA.  They usually have impressive “natural hazards” photographed with the highest technology available.  However, sometimes the natural hazards to humanity are not caused by the natural cycles of Earth.  In those cases, it is humans who have created hazards for themselves and people die.  Now, why would we create things that harm us so much? Why would we support and contribute to such terrible things?  A good explanation is the one given by economists with the complex and difficult term negative externalities.

A negative externality is a spillover of an economic transaction that negatively impacts a party that is not directly involved in the transaction. The first party bears no costs for their impact on society while the second party receives no benefits from being impacted. This occurs when marginal social cost is greater than marginal private cost (MSC > MPC).

The case of pollution in China elucidates very well how the market-driven approach to correcting externalities by “internalizing” third party costs and benefits fails to work in a globalized economy.  For example, by requiring a polluter to repair any damage caused. But, in many cases internalizing costs or benefits is not feasible, especially if the true monetary values cannot be determined.  In fact, our technological gadgets and thousands of products imported from China are the cause of the hazardous health conditions in that country.  We as consumers are part of this chain by buying the products. How can we do something?

I would suggest that the best way to participate in a positive way is to continue creating awareness of the failure of the government of China to protect the lives of the Chinese people.  It is at the end of the day the responsibility of that government to protect the life and property of its citizens, not ours.  We as consumers can only morally sanction them and stop consuming their products whenever possible.

This is a good (and very unfortunate) example of how globalization without an objective code of values becomes a zero sum game.  I share with you the information regarding how dangerous has become the air in the surroundings of Beijing and Tianjin,

—-

Air Quality Suffering in China

acquired January 14, 2013download large image (7 MB, JPEG, 5000×6400)
acquired January 14, 2013download GeoTIFF file (47 MB, TIFF)
Air Quality Suffering in China

acquired January 3, 2013download large image (8 MB, JPEG, 5000×6400)
acquired January 3, 2013download GeoTIFF file (51 MB, TIFF)
acquired January 3 – 14, 2013download Google Earth file (KMZ)

Residents of Beijing and many other cities in China were warned to stay inside in mid-January 2013 as the nation faced one of the worst periods of air quality in recent history. The Chinese government ordered factories to scale back emissions, while hospitals saw spikes of more than 20 to 30 percent in patients complaining of respiratory issues, according to news reports.

The Moderate Resolution Imaging Spectroradiometer (MODIS) on NASA’s Terra satellite acquired these natural-color images of northeastern China on January 14 (top) and January 3, 2013. The top image shows extensive haze, low clouds, and fog over the region. The brightest areas tend to be clouds or fog, which have a tinge of gray or yellow from the air pollution. Other cloud-free areas have a pall of gray and brown smog that mostly blots out the cities below. In areas where the ground is visible, some of the landscape is covered with lingering snow from storms in recent weeks. (Snow is more prominent in the January 3 image.)

At the time that the January 14 image was taken by satellite, ground-based sensors at the U.S. Embassy in Beijingreported PM2.5 measurements of 291 micrograms per cubic meter of air. Fine, airborne particulate matter (PM) that is smaller than 2.5 microns (about one thirtieth the width of a human hair) is considered dangerous because it is small enough to enter the passages of the human lungs. Most PM2.5 aerosol particles come from the burning of fossil fuels and biomass (wood fires and agricultural burning). The World Health Organization considers PM2.5to be safe when it is below 25.

Also at the time of the image, the air quality index (AQI) in Beijing was 341. An AQI above 300 is considered hazardous to all humans, not just those with heart or lung ailments. AQI below 50 is considered good. On January 12, the peak of the current air crisis, AQI was 775 the U.S Embassy Beijing Air Quality Monitor—off the U.S. Environmental Protection Agency scale—and PM2.5 was 886 micrograms per cubic meter.

  1. Resources

  2. Air Pollution in China: Real-time Air Quality Index Visual Map. Accessed January 14, 2013.
  3. China Air Daily. Accessed January 14, 2013.
  4. U.S Embassy Beijing Air Quality Monitor. Accessed January 14, 2013.
  1. References

  2. Associated Press, via Yahoo News (2013, January 14) Beijing warns residents after off-the-charts smog . Accessed January 14, 2013.
  3. NASA (2010, September 22) New Map Offers a Global View of Health-Sapping Air Pollution.Accessed January 14, 2013.
  4. NASA Earth Observatory (2012, March 23) Satellites Map Fine Aerosol Pollution Over China.
  5. The New York Times (2013, January 14) China allows media to report alarming air pollution crisis. Accessed January 14, 2013.
  6. Yahoo News (2013, January 14) China’s air pollution problem slideshow. Accessed January 14, 2013.

NASA image courtesy Jeff Schmaltz, LANCE MODIS Rapid Response. Caption by Mike Carlowicz.

Conference: Global History of Agrarian Labor Regimes, 1750 to 2000 (Harvard University)

My interest in Agrarian Labor Regimes was first awaken in my research on Opium trade in India. Since then, more readings have made me realize the complex structures behind the history of agrarian labor in a global context.

If you are also interested in the topic, the *Weatherhead Initiative on Global History (WIGH)* at Harvard University is planning a conference for *April 2013* that is focusing on changing labor regimes within global agriculture.

As posted by Blog de la AMHE by Manuel Bautista, they are interested in exploring the diversity of labor regimes, the paths along which they changed, and—most especially—the connections between these changes in different parts of the world. We are interested in work that explores the connected histories of propertied farming, sharecropping, wage labor, slavery, *cultures obligatoires*, and other such forms of labor, and how they have been connected to the spatial and social spread of capitalism.We are seeking proposals from historians, political scientists, economists, sociologists, and anthropologists at all stages of their academic career, including graduate students. We encourage proposals from those in relevant career paths or institutions outside the university. We are particularly interested in forging a global discussion of these topics, and therefore welcome especially contributions from outside North America and Europe.

The conference will try to balance broad comparative papers and revealing case studies. The Weatherhead Initiative on Global History is a newly created center that responds to the growing interest at Harvard in the encompassing study of global history. The Initiative is committed to the systematic scrutiny of developments that have unfolded across national, regional, and continental boundaries as well as to analysis of the interconnections—cultural, economic, ecological and demographic—among world societies. For further information about WIGH as well as the conference, please consult our website at http://wigh.wcfia.harvard.edu.

Proposals should include an abstract of no more than two pages and a brief curriculum vita. Please email your submissions to Jessica Barnard ( jbarnard @ wcfia.harvard.edu ) before *November 30, 2012*. Travel expenses as well as accommodation will be covered.

Holger Droessler hdroessl @ fas.harvard.edu