China's Industrial Revolution: Still an Opportunity for All

China's Industrial Revolution started in the 20th century, over two centuries behind Europe. Now this new global economic powerhouse is preparing to properly step onto the world stage; with this step, China will soon no longer be "the world's workshop".

China's government is now shifting economic gears from being export- and investment- based economy to one that will be supported by its own domestic population, and at 1.3 billion, it is the largest in the world.

This shift is highlighted by the recent pay increases gained by Chinese workers through labor actions, strikes and protests; in the background, the government has also increased the monthly minimum wage by roughly $30. Many economic forecasters also predict that the Chinese government will allow the yuan to rise against the US dollar. How will this affect the labor market? The increased pay may drive inflation in the already lowing Chinese economy, and a stronger yuan would be problematic for exporters. However, in the long run, the increased wages and stronger currency will benefit both the people and the economy; through increased productivity levels and domestic consumer spending. This will decrease dependence on foreign importers and cause China to become more self reliant as high export rates are delicious for boosting the economy, but only when there are nations that are willing to import. China has benefited from globalization; now that they have a strong economy, they will probably wish to stabilize it. Of course, hopefully China has learned a lesson from American history and they will not allow such a gross imbalance of financial flow.

This situation may also prove beneficial for America. After Reagan's 1980's dismantling of social democracy and the rise of Neoliberalism, globalization became one of the most popular (and controversial) topic for economic policy makers in the last two decades. This has lead the United States to become the world's largest importer; an economy that has lost production output and employment due to a failure to be competitive internationally. Now is the perfect opportunity for the balancing of American global trade and to transfer employment back into the US.

The main principle is, once again, that a balance must be maintained between financial flows going out and coming in; there are costs and risks, but also benefits, to globalization.

South Korea: The UN is Useless

In response to the attack on the Cheonan a North Korean torpedo (a South Korean warship) by (or at least suspected by most countries), South Korea took its case before the UN security council and asks that "some action" be taken. I would like to ask, why?

On the security council, South Korea is backed by the US, but China remains an obstacle (and a potent one at that, being one of the five veto wielding nations). China is in fact North Korea's staunchest, and only, major ally and trading partner on the world stage, and have expressed that they wish to maintain neutrality on the matter and that other nations "remain calm and avoid an escalation of tension" but will not support sanctions against North Korea.

Since China supports an estimated 90% of N. Korea's energy, 80% of its consumer goods, and 45% of all food items, without China's support, any actions taken against North Korea will have its effectiveness decreased significantly; that is why China's cooperation must be gained before any other actions can be taken against the North Korean regime.

There are many reasons why China would wish for a stable North Korea but mainly because North Korea is an important (Communist) buffer state against the militaries of democratic US (almost 20, 000 stationed in South Korea) and its allies South Korea and Japan. A stable North Korea means that China does not have to focus resources on maintaining order, and diverting its attention to other issues (whilst a destabilized North Korea will become a refugee disaster). The US, on the other hand, push for hard sanctions and other "pressure tactics" which the Chinese believe will further push North Korea towards instability; these two opposite viewpoints are the main source of conflict between successful cooperation between China and the US.

The only ways I see China taking sides with the US is if the US make several concessions. They must be willing to decrease their military presence that China sees as threatening, they must forgo their unwillingness to go into bilateral talks with N. Korea without first stopping their enrichment program, and they must ease the economic strangle hold on the small country (even China does not have endless pockets and want economic relations to gain more equality instead of the large imbalance in trade between the two countries; China exports US 2 billion compared to N. Korea compared to importing only US 750 million). And with decreased US pressure, perhaps N. Korea will not feel as much need to "even the playing field" against the threatening powerhouse of the US.

At the very least, other options should be considered to bring about peace; and if N. Korea gets to out of hand (the nuclear tests took China by surprise), even Beijing will be forced to act (I suspect they already have preparations). Slow peace is better than no peace, and even water can wear away stone.