Myths about China and the United States

I like when Foreign Policy Magazine sets out to debunk conventional wisdom on topics. They do a pretty good job of tearing down myths about China:

My favourite

China is America's banker. America cannot anger its banker. In fact, China is more like a depositor. It deposits money in U.S. Treasurys because its economy does not allow investors to put money elsewhere. There is nothing else it can do with its surpluses unless it changes its financial system radically (see above). It makes a pittance on its deposits. If the United States starts to bring down its debts and deficits, China will have even fewer options. China is desperate for U.S. investment, U.S. Treasurys, and the U.S. market. The balance of leverage leans toward the United States.

One point that the article does not bring up is the argument that China's rise is bad for the west. This is only true, in my opinion, if you consider power in relative terms. Military power, for example, tends to be relative. But economically, the rise of China is good thing. More people buying and selling things, more trade, more ideas etc.. this makes us better off as well. Trade and innovation are the engines of growth and prosperity, and it's better of us all to have a billion extra people in the mix.

The FP article makes a good point along these lines.

China's decline will make our lives easier. China's decline may make the challenge for the United States more difficult for at least a generation. It could play out for a long time, even as China grows more aggressive with more lethal weaponry (e.g., what to do with surplus males?). Arguably, both Germany and imperial Japan declined beginning after World War I and continuing through the disaster of World War II. Russia is in decline by all useful metrics. Even so, it invaded a neighbor not too long ago. A declining, nuclear-armed nation with a powerful military can be more problematic than a rising, confident nation.