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.

The Global Politics of the Diaoyu Islands

By Bryant Arnold. via:http://www.cartoonaday.com/china-vs-japan-at-sea/

As The Japanese government’s moved to purchase the Diaoyu Islands (also known as Senkaku Islands) three days ago the government of the People’s Republic of China reacted energetically.  Initially, Chinese media reporters influenced mediatic understanding of the situation by emphasizing the nationalization of the islands by Japan (ringing the history bells to Chinese people on how Japan had previously nationalized Manchuria and renamed it as the puppet state of Manchukuo during the WW2 period).  And later, by making strong diplomatic statements on how Chinese sovereignty and control of the islands had been violated by the Japanese purchase.

The purchase of the islands is of relevance regionally and globally.  Why China, Japan, and S. Korea aren’t backing down on this islands should be understood by taking a look at the map and see how the position of the islands is central for the passage of containers and oil that comes all the way from Middle East via the Strait of Malacca.  A route that is of priority importance for China and which I explored in the essay “The Strait of Malacca as one of the most important geopolitical regions for the People’s Republic of China” which ca be read in pdf at Academia.edu for free.

Locally, the geography of the islands is meaningless. The island group consists of five uninhabited islets and three barren rocks which zooming out are located approximately 120 nautical miles northeast of Taiwan, 200 nautical miles east of the Chinese mainland and 200 nautical miles southwest of the Japanese island of Okinawa. And which zooming out are in the center of the route of all the containers that go to the ports of East and North East China, of which the most important is Shangai.

The Japanese central government formally annexed the islets on 14 January 1895. And after WW2 they were occupied by the United States. The islets were later returned to Japan during the 70s and it was only until the last two decades that they became of relevance as the People’s Republic of China started to project is New Economic and Global Plans for economic sustainable expansion.  Plans in which they have invested billions of  dollars in military expansion, naval trade/military shipbuilding, regional economic investment via state-owned companies and diplomatic sovereignty claims all over the region.

The islands are officially Japanese territory, but as Chinese official statements continue being broadcasted they claim a violation of sovereignty that could takes decades to be resolved via a diplomatic arbitrage and/or scalate to more direct military statements and naval occupations of the beaches of the islets.

Whoever said that trade is the most (or only) pacific way of organizing society should reconsider this evaluations when thinking about how global trade works and on how diplomatic and economic control of trade routes is sometimes more powerful and dangerous than a bunch of battleships.

Global integration of trade

National Geographic is running a wonderful website on Globalization, the international exchange of goods, services, cultures, ideas, has brought increased wealth for many and transformed forever the way humans interact. But while its roots may be in commerce, globalization‘s effects can be very personal.

Advances in communication and transportation have created a rich, unprecedented mixing of cultures throughout the world. But there is a drawback. As international travel, economic migration, and the global spread of music, films, and literature bring more people than ever into intimate contact, human diversity is vanishing.

A shared language is perhaps the most profound expression of group identity and a critical tool for passing cultural knowledge from one generation to the next. But globalization is about integration. Whether by choice, by circumstance, or under duress, thousands of cultural and linguistic traditions are disappearing as their new generations adopt dominant national and global languages.

Workers, from wealthy consultants to unskilled laborers, are also on the move as never before. Some migrants are encouraged by host countries or regional agreements; others avoid official avenues and often live a shadowy, parallel existence once they arrive. Immigration is high, but it is economic migrants—seeking work more than a new homeland—who define our age.

Read more from them here: EarthPulse by National Geographic