What's funding the military buildup in China?
President Obama began a trip to Asia today with a visit to Tokyo, Japan. We expect to see news about the Trans-Pacific Partnership trade agreement (more on that later). But while the world waits, we caught wind of a recent Bloomberg piece highlighting what much of the president’s trip will be about: China. Writes David J. Lynch:
As China has prospered, it has lavished resources on the military in a manner exceeded only by the U.S., which will spend $572 billion on defense this year. In March, China said it plans to increase the PLA’s budget by 12.2 percent this year to 808.2 billion yuan, about $130 billion.
This rapid military buildup has the Alliance for American Manufacturing asking on question: Where did it get all that money?
In late 2000, the U.S. extended trade relations with Beijing in the hopes that liberalized trade would lead to freer China. But most human rights observers would say evidence of growing Chinese democracy has been scant. And even go as far to say Beijing's wealth has only enhanced its tools of oppression.
So what did we get in return for this deal? A trade deficit with that country that keeps shattering records ($318 billion in 2013), fueled by a glut of artificially cheap imports that are swamping stateside competition. That $318 billion trade deficit is where Beijing got the money to build its military. This buildup has caused neighboring countries to doubt the U.S. commitment to its “Asia pivot.”
AAM knows of one surefire way to attack that growing deficit — end global currency manipulation that saps demand and jobs from the American economy. But, alas, it seems the Obama administration passed on its 11th opportunity to do so last week when the U.S. Treasury Department declined to name China a currency manipulator.
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