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1. Unno School
Global Negotiator Development Program
Swingby Corporation
April 6th, 2016
U.S. Competitiveness and the Chinese Challenge
Clyde Unno

2. Swingby
Points of Argument
2
18:30 20:30
U.S. Competitiveness & The Chinese Challenge
 Prime Data Comparison Between US & China
 US & China Relationship
 Economy of the US & China (GDP Growth)
 Economy: Average Salaries
 Economy: Wealthy Oversea Immigrant Investors
 Economy: The Chinese Concession in LA
 Economy: US Treasury Securities Holders
 Economy: Chinese Outward Foreign Direct Investments
(OFDI)
 Economy: EB-5 Immigrant Investors
 Economy: Chinese Firms' Large Contributions to Local
US Economies
 Economy: Global Cross-Border Mergers and
Acquisitions
 Economy: China’s Cross Border M&A Case Studies
 Healthcare & Education: US vs. China
 Energy: US vs. China
 Military Strengths of the US & China
 Military: Defense Budgets
 Military: Defense Budget Transactions in China & US
 Military: Missile Launch Sites & Number of US-Aimed
Missiles
 Military: China’s Naval Modernization Long Term Goals
 American-Chinese Issues
 China’s Cyber Attacks
 US’ NSA China Spying
 US Military Air Sea Battle Against China
 China’s First and Second Chain Islands
 North Korean Issues
 China’s Human Rights Issues
 Constructive Relationship Between USA & China
 Stance on Climate Change
 The Future of US-China Relations

3. Swingby3
United States of America People’s Republic of China
Population 303,241,000 1,321,851,888
Area 9,372,615 km² 9,640,821 km²
Population Density 31 people per km² (80/sq mi) 140 people per km² (363/sq mi)
Urban Population
% of Total Population 82 47
Capital Washington D.C. Beijing
Government
Federal and presidential system,
Constitutionalism, Republicanism
Dominant-party system,
Chinese Communist Party
Races
White American (European American, Arabic
American), Hispanic and Latin American (All
races), African American, Asian American, Native
American, Pacific American
Han race, Tibetan, Mongolian, Manchurian, Other races
GDP Growth 2.2% 7.0%
GDP, Nominal 2014 $17.42 trillion USD $10.38 trillion USD
GDP Per Capita $54,597 $7,598
Military Budget $640.2 billion USD $131.6 billion USD （ 2014 ）
Military Expenditure
(% of GDP) 4.6 2.6
Prime Data Comparison Between US and China

4. Swingby4
Where They Excel: USA vs. China
Source: CIA World Factbook
China Wins In:
GDP Growth: 7.8% (July 2013, US 2.2%)
Exports: $2.05T (2012, US $1.61T)
Air Pollution: 98mg/m3 (2009, US
18mg/m3)
Population: 1.38B (2016, US 323M)
USA Wins In:
Account Balance: $487B (China $214B)
Literacy Rate: 99% (2003 US, 2007
China 92%)
Military Expenditure % of GDP: 4.6%
(2010, 2012 China 2.6%)
Market Capitalism % of GDP: 104.3%
(2011, China 46.3%)
GDP Per Capita: $55,900 (2014, China
$7,600)

5. Swingby5
Developed & Emerging GDP: USA vs. China
Source: World Bank
Developed and Emerging Market GDPs, 2010-2050

6. Swingby6
Developed & Emerging GDP: USA vs. China
Source: World Bank
By 2020, China would have already
surpassed the US in GDP, with cross-
over between US and China to occur as
early as 2018.

7. Swingby7
China Is Back On Top
China is back on top as one of the 3 largest economies, based on its purchasing
power parity.

8. Swingby8
US’ Global Standing
Economy Sizes In Terms of World GDP Share (2014) Global Military Spending (2014)
7.4% 2.4% 1.6%
2014 GDP Growth Rate In China, US & Japan 2014 Military Spending Growth Rate In China, US &
Japan
-6.5%9.7% 2.9%
Source: IMF SIPRI

9. Swingby9
Salaries: USA vs. China
Source: http://www.visualcapitalist.com/china-vs-united-states-a-tale-of-two-economies/
Average Annual Salary
Japan, China, USA (2014,
PPP)
Japan $35,672
Source: Wikipedia
$46,482
US social security authorities put
the national average wage (PPP)
for American workers in 2014 at
$57,139 USD
Salary levels in China have made major gains over the last decade.
In 2014, Chinese workers enjoyed the highest annual salaries, at
about $7,872 USD on average, Beijing at $17,143 USD
and Hong Kong at $18,540 USD.
$7,872
$57,139

10. Swingby10
China’s Rising U.S. Real Estate Investments
 China has an 8% share of total cross-border investments in the US commercial real estate
arena (CRE). The most amount of CRE is from Canada, and second is China. Chinese
investors are buying commercial and residential real estate in California, New York, and
other regions with significant Chinese presence. Popular real estate in New York include
office property, while a majority of Los Angeles/New York properties are hotels.
From January 2005
to March 2014,
$8.5 billion
Chinese Investment in U.S. CRE Chinese Investment in U.S. CRE by State
(January 2005-March2014)
Source: http://deloitte.wsj.com/

11. Swingby11
Chinese Moving to the US: Why Is This Happening?
Why are Chinese moving to the United States instead of staying in China?
•With a $1.5 million USD palatial residence with 5 bedrooms, noodle soup would cost $4
at restaurants in the vicinity.
•In contrast, the same $1.5 million USD mansion (100 ㎡ ) in Shanghai, the nearby
restaurants would charge much more than $4 that one would find in LA.
•LA supermarkets are 4 times as large, and cheaper than Shanghai supermarkets.
•Outlet malls are now crowded with Chinese. Chinese Christians donate 10% of their
income to American churches.
5 Bedroom house
purchased at $1.5
million USD
Can see the
mountains of Los
Angeles from the
home
Chinese churches are
prevalent in Los Angeles
Outlet Malls'
Shoppers are mostly
Chinese

12. Swingby12
Major Foreign Holders of US Treasury Securities
Japan is the largest foreign holder of US debt, and China is second. China is trying to reduce
its interdependence on the US by focusing on European market and trade expansion to
developing countries. China still may hold the most US securities portfolio even in the future.
China is increasing its
Eurodollar bond
investments in order
to balance the US
dollar bonds it holds.
An expert in the
Brookings Institution
stated that the “US
dollar holdings have
become a smaller
share of China’s total
foreign-exchange
reserves.”
Source: Quartz, FactSet

13. Swingby13
Inbound (into China) Foreign Direct Investments (FDI)
Source: BEA, MOFCOM
Top Destinations Of Foreign Direct Investments (2014) Unit: $ billion
The trend in increased foreign investments into China show that investments are being put
into developing, rather than developed economies. Foreign businesses have invested more in
China: in 2014 $127.6 billion, compared to 2013 $123.9 billion. FDI into US companies is
dropping from $230.8 billion (2013) to $86 billion (2014). China shares have also doubled in
comparison to the 2008 financial crisis values.

14. Swingby14
Inbound (into China) Foreign Direct Investments (FDI)
Source: WSJ

15. Swingby15
Outbound Chinese Foreign Direct Investments (FDI)
The US still remains the largest target of Chinese outbound investments with deals worth a
total of $12 billion being completed in 2014. M&A transactions reached a new high in 2014,
an accumulation of increased small deals and increasing financial stakes in Chinese
companies.

16. Swingby16
Group Discussion
1. Many sources state that China's GDP will soon surpass US' GDP in 2020.
Do you think this will be the case?
2. Which sectors in China have the ability to surpass the US?
3. Which sectors in China still lag behind?

17. Swingby17
Source: http://www.visualcapitalist.com/china-vs-united-states-a-tale-of-two-economies/
Healthcare & Education: USA vs. China
Education
Thirty percent of US adults aged 25+ had at least a bachelor’s degree in 2011. (Japan’s is
40%) The Chinese government has begun to finance education more heavily with about
4% of total GDP now invested in education. The number of enrolled college students was
close to 24 million in 2012.
Health Care
Health care has long been an issue in the US. In 2010 the Patient Protection and
Affordable Care Act, also known as ObamaCare, was enacted.
Why so expensive?

18. Swingby18
Source: http://www.theatlantic.com/business/archive/2013/03/why-is-american-health-care-so-ridiculously-expensive/274425/
Healthcare: USA
Why does it cost so much for health care in the United States compared
to other countries?
US doctor salaries are ~3x more than German family practitioner (high US education costs contribute)
 (2006) Specialist Doctor: US $230,000 & Germany $77,000
US government don’t manage prices; healthcare is a for-profit system, adding to costs
Insurance companies manage essential and elective care, with most costs going to marketing, profit,
and administration of for-profit companies involved in the health/insurance industries
Large amount of administrative middlemen for different health care systems drive up costs
2010 Health Spending (% of GDP)
(Japan’s is 10.3%)

19. Swingby19
Source: Congressional Research Service (CRS) analysis of Remuneration of Health Professions, Organization for Economic
Co-operation and Development (OECD) Health Data 2006, October 2006.
Healthcare: USA
Average Salary of Doctors in Germany & USA
Japan $100,000

20. Swingby20
Energy: USA vs. China
Source: http://www.visualcapitalist.com/china-vs-united-states-a-tale-of-two-economies/
2014

21. Swingby21
Number Of Foreign Students Among China, US & Japan
81,884 (2013)
17,961 (2011)
2,083(2011)
19,568
(2012)
92,855
(2013)
235,597
(2012)
Source ： JASSO( 日本学生支援機構 ) People’s Daily Overseas Edition
Unit: People

22. Swingby22
Scholarships Promote Youth Exchange Programs
Announced the $300 million Schwarzman
Scholars Program ( 苏世民学者 ) set up to send
200 US students per year, to study one year of
graduate school in Beijing's Tsinghua University,
alma mater of President Xi Jinping. A total of
10,000 students will be funded with this 50 year
long program.
Schwarzman believes this program will be
advantageous to the US and China for developing
strong relationships between these scholars and
Chinese officials, as program will include meeting
senior government officials and creation
connections.
Stephen A. Schwarzman,
Blackstone Group
Chairman
They signed a gift of $15
million to Harvard
University.
Next target is Yale
In 2010, Zhang Lei ( 张磊 ), a Chinese fund
manager who graduated from Yale’s School of
Management, donated $8.9 million to Yale. This
was the largest alumni gift Yale has ever received
(until 2010).
Source: Forbes WSJ Economist
Established the SOHO China Scholarships in 2014
to endow $100 million USD in financial aid
scholarships for Chinese students to obtain
undergraduate education at the world's top
universities.
Chinese real-estate magnates,
Zhang Xin ( 張 欣 ) and her
husband Pan Shiyi ( 潘石屹 ).

23. Swingby23
College Graduates Around The World
Japanese graduates are
700,000 which is one tenth of
China

24. Swingby24
China’s ‘Soft Power’
Source: Economist
China opened the government-funded Confucius Institute in schools and universities abroad,
intended to boost China’s “soft power”. China’s funding for Confucius Institutes amounts to
about $100,000-200,000 a year on many campuses. There are plans to open 60 more
institutes, and to have 350 more classrooms opened worldwide by the end of 2015.
By the end of 2013
Institutes
Classrooms
Registered
Students
Countries
440
646
850,000
100+
Liu Yunshan ( 劉雲山 ),
Responsible for the Communist Party’s propaganda apparatus
As a “spiritual high-speed rail”, Confucius Institutes promotes friendship by
connecting Chinese dreams to the rest of the world.
America criticism has
recently grown stronger
 “Function as an arm of the Chinese
state and you are allowed to ignore
academic freedom”
 Confucius Institutes were
compromising academic integrity.
The political dividends
of China’s soft-power
spending are far from
obvious.

25. Swingby25
Transaction Of Chinese Students In The United States
From 2012-2013, 28.7% of the total number of foreign students studying in the US were
Chinese (= 235,597 Chinese students). Number of American students studying in China is
steadily increasing year by year.
Source: IIE “Open Doors” Institute of International Education
（国別留学生数）
（人）
Chinese, Indian, Korean, Taiwanese, Japanese Students in the U.S.

26. Swingby26
America’s Position As Military ‘Leader’ Is Slipping
Despite it's decreased spending on military (decreased to 35% of global military spending),
America is still dominating in this arena. US' allies account for another 25% of global military
spending. Even with the combined spending of China and Russia, they still do not meet half
of America's costs.
No Other Country Comes Close to America’s
The US military equipment and forces are better than China's
China’s military commanders believe they will only beat
America's power in 2050, at earliest.
American's strengths lie in having allies everywhere, while
China and Russia have only neighboring allies.
US’ Position In Lead Is Slipping
Inconclusive and ineffective Iraq and Afghanistan wars have
been a sore on America's history and reputation
They have wasted more cash from the war, which could instead
have been invested in ramping up technology
Financial constraints make it difficult to heal from the 12 years
of war
Pentagon is receiving less for the same amount of money as in
the past
Source: Economist

27. Swingby27
Transaction Of Defense Budget In China And US
2004
$464.7
2013
$684.8
2004
$40
2013 $167.7
In billions of US dollars
Military spending as a share of gross domestic product
In terms of number of troops, China is considered the largest military
power; however, in terms of world's largest spender on the military, the
US ranks 1st, then China in 2nd. In 2014, China spend $137 billion USD
on defense, which was a 12.2% increase from the previous year.
Barack Obama has just requested $585 billion USD in military spending
for the 2016 budget. (Figures are official budget rather than SIPRI)
SIPRI: Stockholm International Peace Research Institute

28. Swingby28
Comparison of US and China Military Forces
Within 30 years, over half of China's standard military submarines will be outdated. America
has both higher-quality, stronger, and more quantities of aircraft carriers and surface forces
than China, and in the near future, the US will cooperate with Japan and enhance
amphibious military capabilities with new submarines and planes (“P1” patrol 哨戒機 ) and
19,000-ton-level helicopter carriers.
Source: Stockholm International Peace Research Institute (2015) PCC: Patrol Coastal Combatants

29. Swingby29
Comparison of US and China Military Forces
Source: Stockholm International Peace Research Institute (2015)
Arms Trade & Export
*Figures are in millions
Unit is based on
average known
production cost value
(average of certain
weapons only)

30. Swingby30
Missile Launch Sites & Number of US-Aimed Missiles
America's Asian bases are being threatened by the Chinese firepower, says the the Center
for Strategic and Budgetary Assessments (CSBA 米国戦略予算評価センター ). Until now,
these American bases have been safe from nuclear attacks. With China's missiles, these
bases could be destroyed, including the runways and fighter equipment and ships.
Source: Economist

31. Swingby31
Missile Launch Sites & US-Aimed Missiles
① China has created what the Pentagon calls “the most active land-based ballistic and
cruise-missile program in the world”.
② China has transformed and enlarged its submarine fleet, which can now berth in the
newly completed Hainan Island base, just off of China's southern coast.
③ China has concentrated on what it calls “informa-tization”, which describes how the
PLA needs to function as one force, using sensors, communications and electronic and
cyber-warfare. China has also been working on anti-satellite weapons.
Source: Economist
Three Areas of the PLA's
Modernization Stand Out

32. Swingby32
China’s Naval Modernization
Source: http://origin.www.uscc.gov/
Select Elements of China’s Naval Modernization
C4ISR refers to command, control, communications,
computers, intelligence, surveillance, and reconnaissance.
C4ISR
Antiship Ballistic
Missiles
Cruise Missiles
Submarine and
Surface Forces
Nuclear Ballistic
Missile Submarines
Aircraft Carriers
Maritime Law
Enforcement Ships
Personnel and
Training Reforms
Implications for the United States
 Building up stronger bilateral ties and
relationships between the 2 militaries - China and
US by supporting maritime cooperation
 Recent China sea activities are restricting US'
range of activities in the region, and could
undermine military, security, and overall US
interests
 Protesting Beijing's claims in the East and South
China Seas by confidently challenging any
provocation from China
The naval modernization mission, referred to as the Offshore Defense ( 近海防御 jinhai
fangyu) by Chinese documents, are guided by a careful strategy formulated by China's
defense. The government has put numerous efforts into the overarching strategy through
research and development, ship-building, and will continue into 2020.

33. Swingby33
American-Chinese Issues
 Trade Balance
 Iranian Issues
 North Korean Issues
 Taiwanese Issues
 Climate Change
 Foreign Exchange
 China’s Violation Of Human Rights
 Cyber Attack
 Allied Relationship In The Asia-Pacific Region
Kevin Rudd: Are China and the US doomed to conflict?
https://www.youtube.com/watch?v=8XQ1onjXJK0
Video

34. Swingby34
China Enjoys Various Asymmetric Advantages
Source: Economist
As a result, it can create a divide
between America and its allies in the
region, with the use of force on Asian
countries
US can dominate the area with sea
and air operations, but if Chinese anti-
ship missiles intervene, US will be less
influential in Asia. US should develop
its navy be able to better defend.
America, trying to avoid war in the
area, is unlikely to go to war over
defense of an uninhabited rock island,
which is of no strategic benefit. In the
end, they may talk but avoid the walk
(of going to war).
Japanese people are also shaped by
propaganda, but only focus on
domestic propaganda. China, on the
other hand, have legitimate concern to
shape both domestic and international
audiences.
China's armed forces are weaker
compared to the US’. China enjoys
enforcing dominance in the Asia region
China promotes propaganda to its Chinese
people, but also spreads its nationalism to
the rest of the world
China is an autonomous power and tries
to divide US and US allies
China believes there is asymmetry in
power

35. Swingby35
Cyber War Between The US & China
Mandiant, a computer security
company in the United States,
were able to pinpoint the security
hacks to a secretive Chinese
military unit called Unit 61398.
While Mandiant claims source of
hacking is to a Chinese defense
unit, but the Chinese government
has denied any connection to the
security breaches into over 100
companies around the world.
Source: Reuters

36. Swingby36
Cyber War Between The US & China
Source: Reuters
Unit 61398, the 2nd
Bureau brand of the Communist Party of China, employees anywhere
between several hundreds to thousands of employees who are professionally trained in
digital signal processing, technologies, web security, etc.
It is located in a 12-story building and is supplied with high-tech communications
infrastructure, working with the Chinese national defense.

37. Swingby37
America’s NSA Spied On The Chinese
Source: WSJ
The American government conducted a major intelligence offensive against China, with
targets including the Chinese government and networking company Huawei, according to
documents from former NSA worker Edward Snowden that have been viewed by SPIEGEL.
US intelligence agency's special unit infiltrated Huawei's network and copied 1,400
customer files and internal engineer training documents used for Huawei's products.
"Shot Giant", an extensive NSA operation was
started against the company, a major competitor
to US Cisco.
The American intelligence service's targets were
former Chinese President Hu Jintao, the Chinese
Trade Ministry, banks, as well as
telecommunications companies.
NSA ： National Security Agency 国家安全保障局

38. Swingby38
US Military Strategy Against China – AirSea Battle
Andrew Marshall: The director of the U.S.
Dept. of Defense’s Office of Net Assessment.
Appointed in 1973 by President Nixon,
Marshall has been re-appointed by every
President thereafter: Ford, Carter, Regan,
Bush, Clinton, Bush Jr., and Obama.
AirSea Battle
The Joint Force Strategic missions signed in 2010
calls for sustaining operations in the Global
Commons( 国際公共財 ), and to project power
against China.
① ASB exists to deter war with China
and to crush the intention of China's
dominance around the regions.
Source: The Diplomat
② The overarching objective of the Air
Sea Battle Concept is to “gain and
maintain freedom of action in the Global
Commons.”
Source: The National Interest
Note ： JASBC (Joint Air Sea Battle Concept)
The Office of Net Assessment, led by 93-year-old Andrew Marshall, was created in 1973 by Richard Nixon to serve as the Pentagon’s
internal think tank that looks into the military’s future.
Source ： http://www.mod.go.jp/msdf/navcol/SSG/review/1-2/1-2-8.pdf
Objective of Air Sea Battle

39. Swingby39
China’s Front and Secondary Defense Lines
The Front and Secondary Lines of defense are China’s
conceptual military strategic framework against the US.
Senkaku Islands are on the Front Line of defense. If China
takes possession of Senkaku, it will overcome the Front
Line of defense, which would enable the deployment of
Chinese naval forces into the Pacific Ocean.
A2: Anti-Access; The Secondary Line connecting Japan, Guam and New Guinea. A military tactic for
disallowing US military activities. AD: Area Denial; The Front Line connecting Japan, Taiwan and the
Philippines. Its operation aims to restrict US’ freedom of action in a more narrow confine under the China’s
direct control. A2 and AD were defined by Deng Xiao Ping in 1982.
Front Line
Secondary Line
Senkaku Island

40. Swingby40
China’s Front and Secondary Defense Lines
Since Mr. Xi came to power, there has been a strong push in demands within the South
China Sea, having had an assertive stance for the past few decades. Recent moves by
China to dominate the area around the chain islands (from Okinawa, Taiwan, to Spratly
Islands) has alienated China from its neighbors.
Motivations to dominate the
area come from greed in
wanting to control the sea
bed resources.
China declared a large portion
of the international airspace
above the East China Sea on
November 23rd, 2013 as part
of the Air Defense
Identification Zone (ADIZ).
This declaration angered
Japan and its other neighbors.
Source: Economist

41. Swingby41
North Korean Issues
China’s trade with North Korea is up.. ..as it invests more there.
China’s foreign direct investment
in North Korea, total amount
From China into North Korea
From North Korea into China
$4.0 billion $400 million
If North Korea ever creates problems, North Korea’ ally, China, also gets blamed. North
Korea is acting more erratic, driving China and US closer. North Korea is acting like a
buffer between the US and China, stated in a Communist Party newspaper by Zhu
Zhangping.
Source: Economist WSJ
2007 08 09 10 112007 08 09 10 11 12
China is the power provider of North Korea with fuel,
food, trade, aid, and diplomatic protection.
China worries about
the country’s collapse.
America worries about
a nuclear-armed North
Korea.
Neither America
nor China wants
a war.
If North Korea were to
collapse, the US would be
at China's front door, and a
large torrent of refugees will
flood over the Chinese
border.

42. Swingby42
Group Discussion
1. Why has the US considered the Air Sea Battle as its strategy for the past 6 years?

43. Swingby43
China’s Human Rights Issues
America is accepting China‘s democratic and human rights activists seeking protection, as
many groups in US criticize the government as practicing a restraint on human rights. These
groups maintain a fund for dissident activity and supporting activist dissidents, the oldest is
Wei Jingsheng ( 魏京生 ) Foundation. Wei Jingsheng was forced to exile in the US after
spending 17 years in a Chinese prison. As a result, the foundation was established in New
York City in 1998.
Source: WSJ Wikipedia
Chen Guangcheng ( 陳光
誠 ),
Blind Chinese Human Rights
Activist & Law counselor
 Chen was a law counselor for rural area in
Shandong, China.
 In June 2005, he filed a class-action
lawsuit against Chinese government on
forced abortions and sterilizations. As a
result, he was put under house arrest.
 In May 2012, after 6 days of protection in
the Beijing US Embassy, he went to the
US.
May 4, 2012
Accepted as Visiting Scholar University of New York.
June 14, 2013
Chen has said that NYU cut off his fellowship after
pressure from the Chines government.
June 24, 2013
Chen’s trip to Taiwan was part of his efforts to
enhance freedoms and human rights for his fellow
Chinese.
November 4, 2013
Chen made the remarks of Chinese dissident at UN.
He said the reason why China should not be elected to
the UN Rights Council.

44. Swingby44
Byzantine Relationship Between The US & China
Economically, US is anticipating the business transactions between China, while publically
denouncing China on human rights issues, the devaluation of the Chinese RMB, and their efforts to
encourage US companies accessing the Chinese market.
Economy
Politics
Diplomacy
& Military Affairs
$500 billion US-Chinese economic transaction is currently in place.
US seeks to join hands with China.
US is highly sensitive about South China sea dispute.
Pivot Strategy for preventing China’s supremacy in the Asia-Pacific region is in place.

45. Swingby45
TPP vs FTAAP
TPP
Trans-Pacific Partnership
Japan
Vietnam
Malaysia
Singapore
Brunei
Australia
New Zealand
Mexico
Canada
United
States
Peru
Chile
FTAAP
• China
• Russia
• Taipei
• Hong Kong
• South Korea
America's goal to propel TPP is to change china with the use of foreign trade pressures. The
TPP can reform Chinese trade to be more open. In the APEC summit, Xi Jinping garnered
support from other members to push for the Free Trade Area of the Asia Pacific (FTAAP),
strongly supported by Beijing, which would allow a more liberalized trade.
Obama considers the TPP to be of
pivotal importance, and believes it to be
an economic pillar to the “rebalancing of
Asia”.
China is trying to enhance
initiatives of wide regional
economies in hopes of
overshadowing the TPP.
• Thailand
• Philippines
• Indonesia
• Papua New Guinea

46. Swingby46
China’s Silk Road Plan
China is trying to connect more than 20 countries along the
ancient Silk Road under a grandiose program christened
“One Belt, One Road.” But the more than $140 billion
program is facing challenges in many places over wars,
territorial disputes and domestic unrest.
Source: VOANews.com
If the territorial dispute
cannot be solved, it is bad
for the One Belt One Road
program. If two neighbors
are in conflict, there is no
progress

47. Swingby47
U.S. and China reach historic climate change deal
Source: WSJ
President Barack Obama
spoke during the Climate
Summit at the U.N. on
September 23rd
, 2014.
The two largest carbon monoxide
emitters are the US and China. In a new
effort to reduce CO2 emissions, Zhang
Gaoli recruited many nations to
unilaterally combat climate change.
China’s Vice Premier,
Zhang Gaoli ( 張高麗 )
After Obama's speech, Zhang followed up
to say that China would "make an even
greater effort to address climate change
and take on international responsibilities
that are commensurate with our national
conditions."
United States would cut its 2005 level of carbon emissions by
26% to 28% before 2025. China would peak its carbon
emissions by 2030 and will also aim to get 20% of its energy
from zero-carbon emission sources by the same year.
November 12, 2014

48. Swingby48
$439 billion
$141 billion $116 billion
$173 billion
$126 billion
$181 billion
Source: https://www.census.gov/foreign-trade/balance/c5700.html January 2016
Trade Balance Between The US, China & Japan

49. Swingby49
China Wants To Build Its Own Global System
Capital: $ 10 billionCapital: $ 100 billionCapital: $ 100 billion
China may bypass the US in becoming the world's biggest economy. The IMF however still
remains under the leadership and exclusive reserve of the US and Western European
countries. China is pushing hard for the BRICS Development Bank, AIIB and Shanghai
Cooperation Organization Development Bank, which should provide Asian leverage.
Strengthen cooperation with Southeast
Asia and the rest of the world
Pushing developing countries to
surpass developed countries
Strengthen cooperation
between Central Asia & Russia
Source: Bloomberg
BRICS
Development
Bank
• Brazil
• Russia
• India
Asian Infrastructure
Investment Bank
• Major countries except US
and Japan
Shanghai Cooperation
Organization
Development Bank
• Russia
• Kazakhstan
• Kyrgyzstan
• Tajikistan
• Uzbekistan
• China
• South Africa

50. Swingby50
China-Led Asia Infrastructure Investment Bank (AIIB)
Western powers control the world via the international banks: Western-dominated Bretton
Woods institutions, the International Monetary Fund (IMF) and the World Bank. Asia
Infrastructure Investment Bank (AIIB), the first Asia-based international bank, was
established. It is considered a competitor to global financial institutions since it runs
independently from the above-mentioned western banks. Only the US and Japan, 2 largest
world economies, rejected its membership.
Source: South China Morning Post
AIIB has officially approved 57 nations as
prospective founding members.

51. Swingby51
Pathway To FTAAP
BRICS Development
Bank
Asian Infrastructure
Investment Bank
Silk Road Fund
Lead to Free Trade Area of the Asia-Pacific (FTAAP)
Silk Road Economic Belt and Maritime Silk Road
Infrastructure
Exports
 Plant
 Technology
 Service
 Machinery
 Pipeline
 High-Tech Goods
Infrastructure
Investment
Steel, non-ferrous metals, building
materials railway, electric power,
chemical, textile and automotive
communications, civil engineering
machinery, aerospace and ocean
development
Trade Promotion
 Making international
trade rules
 Strengthen
cooperation with other
Asian countries
Trade With
Countries Along
the Silk Road
Countries Along
the Silk Road Cross-Border
E-Commerce
Improve
Infrastructure
Sign FTA

52. Swingby52
Group Discussion: Points of Argument
◎ How Americans Develop Strategies
Sun Tzu’s Art of War: Thus the highest form of generalship is to balk the enemy’s plans; the
next best is to prevent the junction of the enemy’s forces; the next in order is to overwhelm
the enemy’s forces in the field; and the worst policy of all is to besiege walled cities. The
rule is not to besiege walled cities if it can possibly be avoided.
上兵は謀を伐つ。其の次は交を伐つ。其の次は兵を伐つ。其の下は城を攻む。城を攻むる
の法は已むを得ざるが為なり。
◎ China's Positivity
Strategy 30: Make the host and the guest exchange places.
Defeat the enemy from within by infiltrating the enemy's camp under the guise of
cooperation, surrender, or peace treaties. In this way you can discover his weakness and
then, when the enemy's guard is relaxed, strike directly at the source of his strength.
客を返して主（あるじ）と為す
◎ Chinese' Weakness
清 · 李宝嘉《文明小史》第四十四回 : ちゃらんぽらん和尚の鐘つき
Irresponsibility.
Strategy 36: If all else fails, retreat. For example, Someone who is corrupt runs away
abroad.
走（に）ぐるを上（じょう）と為（な）す

53. Swingby53
Summary
The Chinese residing in California are making money by doing business with China.
These residents are Chinese American. These strong ties to the motherland are
becoming stronger and more of a reality.
China will some day surpass the US in economic power; however, the money will still be
flowing into the United States. This is not a fact that can be overlooked. Japanese should
be able to build relationships with the population of oversea Chinese in the US.
While some Chinese may be hesitant to believe that China really would economically
surpass the US, in reality, the numbers are showing a different conclusion. It is a very
likely reality that China would beat the US economically. We need to understand the
difference between these to: what the Chinese feel, and what really would happen.