Rather than posting glib comments posing as reasoned answers you should look to the honesty and accuracy of the Chinese poster Saddenchinese:

http://www.danwei.org/net_nanny_follies/youtube_blocked_in_china_1.php#comments

[Ed Note: Scroll down to the last few comments on the thread.]

I finally installed Chinese reading software on my new laptop today. Thanks for your compliment on my research. As Sun Tze say

“know your enemies and know yourself, you will emerge victories 100 times out 100 battles”

Not I am saying India or US are enemies, of course.

I rather have life of Shah Jahan, surrounded by a huge harem of Indian and Persian beauties.

So, I lied. I’m back already. I just got back from a bar and I don’t feel ready to sleep yet.

I have no ‘bubbles’ of hope or delusion to burst. I wasn’t saying what I want to happen in terms of the relative US/China economic status; only what I think will happen, based on everything I’ve heard and read in the last few years (which comes not only from the financial press but off-the-record briefings from leading economists, etc.).

China’s major goal, in order to develop a more balanced economy and enable more sustainable growth, is certainly to increase domestic consumption; but that can only be achieved with several more years of high GDP growth, and for that you need continuing high levels of foreign investment. After all, 10% annual growth this year requires a hell of a lot more fresh capital input than 10% growth in 1990 did.

The desert island analogy is fun, but not really on point at the moment, I think. The Asian castaways are becoming stronger and more independent, and might have a growing tendency to band together because of their common Asian heritage – but the American isn’t just a freeloader; at present, they still need him as much as or more than he needs them. It may be changing, but the big Yank ain’t superfluous yet.

I really don’t like talking about war scenarios too much. Too scary, too depressing. My point was that I could well understand why a country might want to use tactical nukes if facing a sudden massive conventional threat, but….. well, you’d probably get completely annihilated by the strategic nuclear response. My favourite line about nukes comes from the Danny De Vito film ‘Other People’s Money’ where he plays a ruthless M&A buccaneer. His view: “Lawyers are like nuclear weapons. I have to have them because the other guy has them – but as soon as anybody uses them, everything gets fucked up.”

It does concern me that so many people I meet in China do still seem to find these war scenarios a pressing concern, that they feel genuinely under threat from Russia, the US, India, even Japan. Wars between major powers today (even if you could disengage the nuclear option) are unwinnable, unthinkable. And none of China’s neighbours or economic rivals really bears it any ill will. The increasing integration of the globalized economy – and the globalized diplomatic community – creates an increasingly fraternal relationship between nations. We all depend on each other. A strong, prosperous, and stable China is good news for every other country in the world; the opposite is very bad news. So, when foreigners get concerned about China fucking something up (Tibet, the environment, whatever), our advice and criticism is not intended to humiliate or undermine the country; we really want to help; because what’s good for China is good for us too. It’s sad that so many Chinese, both the Party leadership and the ordinary populace, are still disbelieving of this simple truth.

I will accept your unilateral declaration of ceasefire. Here is my parting shots.

You seem a well read, highly intelligent fellow who I gather probably has many more years of experience than me (yes, you dated yourself with the 94 visit thing). But dude, where are you getting your financial info, man?

IMO, there are only two Western papers worth their ink, Wall Street Journals and to lesser degree Financial Times. The rest of them are just criminal enterprise against community of trees.

Your faith in America is admirable, and I must say not entirely misplaced. American will be richer and better off than they are today, in the long run. However relative power of US in the world is declining and will continue to do so vs China. A tectonic plate shift in geopolitical alignment is taking place, with a massive transfer of wealth and its attendant power from the West to the East.

Peter Schiff makes this analogy to the world trading system:

6 people are stranded on an island. Group consist of one American and 5 Asians. They immediately divided up the tasks.

The American is assigned the job of eating while Asians are set to fish, tend the fire and gather coconuts.

During each meal, the American will leave just enough crumbs that Asians won’t starve to death

An economist will look at the picture and declare that the American is vital to the island economy. He is providing jobs for the rest of the island.

The truth is that Asians would have been better off kicking the American off the island and enjoy the fruits of their own labor. Then they might even get to enjoy life more like spending time sun tanning.

Our huge trade surplus with US means we Chinese are sending goods to US while receiving bunch of IOUs (american dollars) in return.

These IOUs are increasingly worthless cuz Helicopter Ben is making more and more of them meanwhile Chinese is prevented from cashing them in like the purchase of Unocal.

I am sorry to burst your bubbles, Froog. But at this stage, West is much less important to China’s development strategy than before. Please don’t take it too hard, it has nothing to do with your ego and it’s not personal, it just is. Our task is to figure out how to consume the goods that we produce ourself. 40% saving rate of Chinese household over last 30 years means we have more than enough domestic capital.

What we need is a more efficient capital market to allocate that capital. God knows local government officials are not to be trusted. I know Western financial institions are more complex , and I am also glad CITIC’s would be $1 billion investment in Bear Stern last year was blocked by our regulators.

As for “no first use” policy, if China wake up to lot of American carriers did suddenly line up in hostile stance off the Chinese coast, we would be stupid not to use “tactical” nuclear weapon.

This is like a schoolyard match up where the much bigger bully calls out a smaller guy for a fight. Smaller dude whips out a baseball bat and whacks the bully in the head and proceed to beat him silly. The former bully crys foul and complains that the little guy fights unfair, it’s just suppose to be a fist fight. Right.

It’s called asymmetrical warfare, buddy. To meet American carrier force head on in a conventional match up right now would be foolhardy. We Chinese are mostly not Shias, our goal is not to martyr ourself, we martyr our enemies.

I see you are still sensitive about your history, so I will leave that alone.

You know and see yourselves very well, and what you see is sometimes frightening.

Many of us foreigners among you can see too, we understand and see very clearly.