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Those Wonderful Sea Lines of Communication

I wanted to highlight some economic data out of China. Why? Because as an influential part of the international security brain trust in Washington focuses anew on China (see AirSea Battle), it’s important to keep in mind that competition at the grand strategic level is not simply a matter of bean counting military hardware and comparing competing war plans. In the 21st century, great power rivalry will be played out on the economic field; we should worry more about the U.S. ability to compete on that field than the battlefield.

So, just to highlight some interesting data points from this Bloomberg story that reports Chinese exports jumping 46 percent in February from a year ago. China, big exporter, right we know that; last year China surpassed Germany as the world’s largest exporter.

The interesting bit of info in this story is that Chinese imports in February also jumped by 45 percent over last year. The conventional wisdom has long been that China will remain an export dependent economy. Chinese domestic demand looks like it might become as/more important than external demand. An example: last year China overtook the U.S. as the biggest auto market.

China is poised to surpass Japan this year as the world’s second largest economy; its GDP grew by 10.7 percent in the fourth quarter. It’s projected to contribute more than a third of global growth in 2010.

In great power rivalry terms, a voracious demand for imports sets one up to potential pain points if the competition shifts to less than peaceful means. There's lots of worry in some circles about China threatening U.S. sea lines of communication; yet, constantly feeding Chinese domestic demand requires a steady flow of mostly maritime trade. During World War II, the U.S. Navy, and particularly the “Silent Service,” proved masterful at maintaining an economic chokehold on opponents.

-- Greg

Photo credit: Atlantic Council

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