Daniel Larison further analyzes Michael Auslin's contention that any reduction in American defense spending will cause a cascade of failures across the international system:
Auslin had warned that Chinese military build-up, Russian influence in post-Soviet space and an Iranian bomb would lead to a situation in which â??global trade flows will be stressed, the free flow of capital will be constrained, and foreign governments will expand their regulatory and confiscatory powers against their domestic economies in order to fund their own military expansions.â?One of the reasons I didnâ??t originally address these concerns is that I donâ??t find these to be the likely consequences of Chinaâ??s continued rise, Russian resurgence in its own neighborhood and Iranian membership in the nuclear club. Why will global trade flows be stressed? China is heavily dependent on its export trade to sustain economic growth at home. It has no incentive to disrupt or â??stressâ? trade flows or to embark on policies abroad that would lead to this. At present we see increasing economic integration of Taiwan with the mainland, and the Hatoyama government has held out the possibility, however remote it is at the moment, of forming an East Asian economic community modeled on the European Union. China is investing in (and exploiting) markets all over the world in states where Western companies typically do not go or where they are not allowed to go. So why will the free flow of capital be constrained if China continues to increase its military power? Are we not instead seeing increased trade carried out by and among the BRIC nations? Arenâ??t emerging-market countries, including China, engaging in noticeable economic innovation?
In this vein it's worth reading Anthony Bubalo & Malcolm Cook's piece in the American Interest (sub required), documenting the rise in investment between China, Russia, and India and all across Asia and the Middle East. The reason Asia is growing in economic might is because of a growing trading network. They're participating in the global economy in ways that benefit them and trying to close it off to the U.S. or create an autarkic regional bloc doesn't appear to be the goal. And if it was, one way to breach it would be to get more trade deals through Congress and move to patch things up with India.
