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.

China & Global Oil

I am currently enrolled in the course “Oil, Power and Climate – A Global Perspective” with Dr. habil. Peter Gärtner who is an specialist in Global Studies, North-South relations, democratization, development theory and policy, law and globalization with a regional focus in Latin America.

As part of our initial discussions we were required to present a review of the current status of the main importers and exporters of oil.  My selection was China and its raising demand of energy resources in order to continue providing for the world the largest amount of goods ever made in history.  Indeed, the numbers I found of China were astounding and the forecast of its increase for the next ten years is even more astonishing.    As forecasts show, the United States is soon to lose its hegemonic position in the world as the largest economy due to the fact that since 2010 it was China the world’s largest energy consumer (and its growth continues to further grow).

For the last six months I have been paying much attention to literature in the Asia region and I have started to draw a new world map that has South East Asia and the Pacific at its core. I foresee a semester full of Asia related topics and I will most certainly enjoy focusing in that area.

I share with you the handout with the latest figures and updates on China that I prepared for a discussion.  The file is accessible online and can be downloaded as a PDF: http://issuu.com/condottiero/docs/oil-china-lgpr