"CHINA TIMES" COMMENTARY DISCUSSES THE

UNCLAS SECTION 01 OF 02 TAIPEI 002690

SIPDIS

DEPARTMENT FOR EAP/RSP/TC, EAP/PA, EAP/PD - ROBERT
PALLADINO
DEPARTMENT PASS AIT/WASHINGTON

E.O. 12958: N/A
TAGS: PREL KPAO TW
SUBJECT: "CHINA TIMES" COMMENTARY DISCUSSES THE
PEACEFUL DECLINE OF THE UNITED STATES


Summary: The centrist newspaper "China Times" carried a
commentary June 20 by Professor Chu Yun-han of the
National Taiwan University's Department of Political
Science, in which he discussed and predicted the
peaceful decline of the United States in the next ten
to fifteen years. An excerpt of the commentary
follows.

"Peaceful Decline of the United States"

Professor Chu Yun-han wrote in the "Weekly Commentary"
of the centrist, pro-status quo "China Times"
[circulation: 600,000] (6/20):

". This deteriorating state of the huge trade imbalance
[in the United States] did not merely reflect the
constant weakening of the United States' export
competitiveness; nor did it simply indicate the United
States' worsening problems of excessive consumption and
insufficient saving or imply that the U.S. exchange
rate has been severely overestimated due to the offset
of short-term cash flow. The deeper significance of
the United States' huge deficit of balance of payments
shows that the economic, political and military
foundations of the U.S. hegemony are weakening and that
the global order established by the United States
single-handedly after the war [in Iraq] will face a
series of tremor and adjustment. Such a process of
order re-organization will certainly not be smooth or
peaceful.

"The four major pillars that support the United States'
exclusive superpower position are: the United States'
particular wealth in territory, natural resources and
economic size; its long-term leadership regarding
productivity and its international competitive edge;
its superiority in legitimacy and ideological
structures; and its absolute supremacy in military and
security areas. These four pillars have propped up the
United States' dominant position over global affairs
and the greenback's status as the international reserve
currency. Over the past few years, the phenomenon that
these four pillars are sinking day by day has been
getting clearer and clearer. Among the four pillars,
[the one consisting relating to] productivity and
international competitiveness is the one that has lost
its leading edges the quickest, and it happens to be
the most critical cornerstone holding up the U.S.
hegemony. .

"The rapid swelling of U.S. expenses related to arms
procurements over the past few years has put the whole
new weapon research and development mechanism on the
brink of decomposition. Part of the reason is because
of man-made errors - the problem that certain interest
groups have manipulated the Pentagon's weapon
procurement process is getting more and more serious.
Part of the reason is due to the fact that the U.S.
defense industry is lacking a solid and broad daily
necessities industry to back it up. .

"What is even more worrisome is that the United States'
democracy seems to have gradually lost its capability
to respond to challenges. During the five-year term of
the Bush administration, serious errors occurred in the
administrative objectives and distribution of national
resources. Over the past five years, the United
States' accumulated national defense expenses have
reached USD1940 billion, and its accumulated national
debts have also soared to the benchmark 75 percent of
its GDP. In the meantime, the gap between the rich and
the poor inside the United States is widening; social
security protection for middle- and low-income families
has shrunk greatly; and [incidents of] social discord
and conflicts are increasing. The unprecedented
humongous military expenses, however, has failed to
help the United States to get obtain better security
protection, nor has it helped the United States redeem
its international image and prestige of leadership that
have both hit rock bottom. .

"In the face of the rapid rising of China and India,
however, conscientious policy debates are hardly heard
in the U.S. Congress; instead, it is filled with
populist appeals that attempt to find a scapegoat for
the aged economic problems or with corny statements
that fostered the protectionism sentiments. When
facing the industrial hollowness, an imbalanced trade
structure, out-of-controlled financial deficit and the
United States' heavy dependence on the capital input of
the Asia central bank, the attitude of the executive
and legislative branches are basically procrastinating.
Even the usually wise Federal Reserve can only maintain
a highly loose currency policy to barely support the
U.S. economic prosperity.

"All these indicated that in a short period of time
(three to five years) the world economics will undergo
an exchange rate storm that will be more serious than
the `Nixon shock' in 1971. In the mid-range period of
time (five to ten years),the accelerating process of
global production bases shifting will lead to
deteriorating bilateral trade conflicts or even
endanger the global free trade system. In a certain
period of time (ten to fifteen years),the United
States' dominance over the global affairs will markedly
decline. This severe structural adjustment process
will definitely not come quietly; we can only pray that
at the least the process will be peaceful. For the
international community, whether China can `rise
peacefully' and whether the United States can `decline
peacefully' are in fact a pair of questions that are
closely linked."

PAAL