Morning Bell: Getting Our China Priorities Straight
Conn Carroll /
Last week, the establishment media played up reports that China surpassed Japan as the world’s second largest economy as measured by gross domestic product (GDP). Contrary to the amount of attention it received, the development is not as important as it was made to sound. First of all, if the PRC reported its economic data accurately, China probably passed Japan several years ago. Second, after adjusting for different prices within economies —known as purchasing power parity— China actually passed Japan way back in 1995. In other words, this is old news. Lost in these GDP measures, however, is any measure of personal income or wealth. And by that measure the average Japanese citizen is roughly in 40th place in the world, behind the average citizen of Mississippi. China’s GDP per capita, by comparison, is still only about 15 percent of the U.S. level, about the same as El Salvador.
This is not to say the United States should be turning a blind eye to China’s rise. In another development from last week, this one virtually ignored by the establishment media, the Department of Defense released its annual Military and Security Developments Involving the People’s Republic of China. According to the report, the People’s Liberation Army (PLA) official budget, which has enjoyed double-digit annual increases for two decades, grew again by nearly 8 percent. This is compared to the reductions in defense spending called for in President Barack Obama’s budget, which reduced defense spending from 4.9% of GDP today to 3.01% by 2019. So while the Obama administration is cutting our missile defenses and giving the Navy the cold shoulder, the PLA is developing anti-ship ballistic missiles, building up its military industrial complex and achieving an anti-access, area-denial capacity that will further limit American commanders’ options in Asia. (more…)