The US trade deficit (the value of goods bought from China versus what was sold to them) reached $162 billion. That amount accounts for over twenty percent of China’s GDP (total economic activity.) This has serious military implications. If China goes to war with the United States, the first impact would not be bombs, but an end to exports to the United States. Putting over a hundred million Chinese out of work would have a larger impact than any bombing campaign.
This will deter the Chinese, if they’re rational.
UPDATE: Jim Bennett emails: “True. plus, the more foreign oil they import, the more vulnerable they would be to the US Navy cutting off their supplies. Worked wonders on Japan in WWII. Of course, they said all of this about Germany before WWI.” Yes, that’s the problem with the rational-actor assumption.
ANOTHER UPDATE: China is building its military faster than expected:
Reports, and digital photos, getting out of China via the Internet, indicate that the modernization of the Chinese armed forces is some two years ahead of the schedules cited by most Western experts. New aircraft, ships and tanks are showing up sooner than expected, and China is spending money on more training for pilots and ship crews. Not as much training as Western forces get, but more than in the past for China. It appears that the Chinese defense budget will go up another 10-15 percent next year. This is only about half of what Japan spends, but the Japanese pay much more for personnel and equipment. This gives Japan a qualitative edge that the Chinese are trying to close.
China also expects Europe to drop its arms embargo this Summer. This would enable China to more quickly, and cheaply, upgrade warplanes, ships and tanks with more modern, and effective, French and German electronics and weapons.
Oh, goody. Thanks, Jacques! Thanks, Gerhard! We’ll remember the favor, if this comes about . . . .