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« Machines From Molecules | Main | Nanotech Dangers Seen »

October 11, 2005

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Dave Slutzkin

Ethan Zuckermann's recently been posting on a related topic, here: http://www.ethanzuckerman.com/blog/?p=203 and here: http://www.ethanzuckerman.com/blog/?p=204. Taishi, a village in southern China, has been embroiled in conflict between soldiers and villagers, with implications for democracy at the village level.

Michael Anissimov

Splendid analysis! Tell me, Michael or Chris, aside from Russia, China, or the US, which countries do you think are the 4th and 5th most likely to acquire MNT first? India and Japan, I suppose?

Brian Wang

I agree that a straight currency conversion rate analysis of economic size can be misleading. However, I think PPP can also be inaccurate, because you cannot trade the assets in China for the equivalent elsewhere. I also think that many PPP analysis are inaccurate.

Brian Wang

The analysis of comparing military and economic spending growth over 45-75 years is nuts. They are talking about a big deficit in 2050-2080 assuming higher than US per capita PPP growth in the Chinese economy for 75 years. To illustrate the absurdity of this, if we project that Google keeps growing at a higher rate trailing off slowly from 95% per quarter starting from $1.1B in Q1 2005, we can see that Google will nearly double every quarter and own both the USA and China in 2010 in the high growth scenario and 2012 in the slow growth and 2015 in the low growth. Thus Google will own both the US and Chinese military by 2015 and we will have pax Google.

On a slightly more analytical level, China is currently buying a lot of Russia gear and I think they are trying to buy stuff from France. That portion of the Chinese military budget has to be GDP based because they are using hard currency to buy subs and fighters. Similarly oil for the military has to be GDP based.

A pure PPP only makes any kind of sense if China had a fully indigineous military development capability. As China gets richer, PPP and GDP will come together.

I am a China optimist but even I do not think its growth will race ahead of the USA for 75 years. Plus just catching economy and budget wise, China has to overcome the fixed military assets of the USA. The USA has more advanced submarines and aircraft carriers that they bought from previous years. That capability still will exist in the future.

Think of it this way. I am twenty times poorer than my gun collecting survivalist friend. I live in Missouri and he lives in California. My house would be 2/3 of the value of his house if my house was in California. If over thirty years I catch up with his salary on a purchasing power basis (I could buy the same stuff in Missouri that he can buy in California). It will still take me a long time to spend 10% of my money and build my own guns and fertilizer bombs to equal his collection even as my 7% salary increases continue to exceed his 3.5%.

Brian Wang

btw: the joint Russia and China military exercises is more a by product of the US going into Afghanistan and Iraq and initially kicking butt and the Bush doctrine of pre-emptive action. Russia and China are both individually and collectively weaker than the USA. Plus the USA can always draw closer to NATO.

Capitalism won in China. Russia has Klepto-capitalism (Enron * 100 and running the show).

In place of chinese communist party, think the inherited power of old farts and the flunkies of old farts. The chinese system of cronyism. At least there is some semblance of meritocracy. The current batch of leaders of 50ish technocrats. If you take away the labels, the degree of difference between China and the USA is not that much.

The cracking down on dissent and free speech is a sign of weakness. That people have more difficulty expressing complaints does not change the fact that most of them have things they do not like and will work to change. Similarly it is not how vocally people in the USA can bitch online or in the media it is how much they work to create real change (which also may not be voting out one set of bums for another).

Mike Deering

If you look at the research results, I think you will see that it is a two horse race to MM between the USA and Japan. I think "who can get the job done" is more important than how much money or effort is being spent. I wouldn't count out the brits either but from a security viewpoint they are merely a colony of the USA.

Tom Craver

China's export-based economy will boom, over-shoot, bust. Probably they're already into overshoot, and will hit 'bust' within 5 years (accelerated by oil price/supply issues).

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