CHINA, GUNS OR BUTTER?

Over the past month, the World has been focused on the missing Flight 370 and the Russian Troop Build-up on the Ukraine boarder. In the interim, China has continued to flex its muscles, claiming territorial rights over several small island groups, in the East China and South China Seas.  In doing so, it has been particularly trying to intimidate Japan and the Philippines (among other countries), both of which have Defense Agreements with the U. S.

Over the past week, Defense Secretary Chuck Hagel has been visiting China and two things were made perfectly clear to him: China has Military Might and it does not intend to relinquish its claims over these island groups.  In making these territorial claims, China appears to be trying to control vital sea passages around Asia.

During Secretary Hagel’s visit, the Chinese gave him a ride on the one Chinese aircraft carrier, the Liaoning.  It is a Soviet vintage carrier which was first launched in 1988, and was purchased from Ukraine in 1998.  Something new was demonstrated, however, in that it can now launch aircraft, and it will presently serve as a training vessel.

No one questions the significant military manpower that China can provide; but, they are currently a regional power, at best.  In the past, the Government has been focused more on necessary economic infrastructure and, accordingly, their military technology is behind that of even some of the smaller countries which it is now contending with.

So, it looks like China is in what economists would call a Guns or Butter crossroads.  Does the Beijing Government continue trying to expand its economy, and let its military fall further behind, or does it shift important resources to raise its military stature, while falling behind economically?  It is questionable as to whether China can grow both its Economy and its Military.  Perhaps it may fail miserably if it tries to do both at once.

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