The China Issue
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All Issues
    The Advent and Establishment of Communism in China
    China’s Economic Miracle
    Central Issues
      Taiwan Issue
      Trade Deficit
      Ownership of American Federal Debts
    Candidates' Positions on China

Taiwan Issue
After the ruling republicans were defeated by communist forces during the Chinese Civil War, its leader, General Chiang Kai-Shek, fled to Taiwan and established the island as the new center of government for the Republic of China. However, before long, the Mao Zedong-led Communist Party renamed the country as the People’s Republic of China, and claimed Taiwan as part of its territory. The Taiwanese government maintained its independence and continued to act as the legitimate government of the country.

Nevertheless, as more and more countries switched their recognition to the People’s Republic of China, the Taiwanese lost their seat in the United Nations. Before long, the United States also switched its recognition to the People’s Republic of China, acknowledging them as the "sole legal government of China." The U.S. decision was mainly caused by the Cold War, and denying recognition to the People’s Republic of China would merely strengthen their relationship with the Soviet Union. In 1979, Congress passed the Taiwan Relations Act to facilitate an unofficial relationship with Taiwan.

Today, neither country acknowledges the sovereignty of the other. However, while the Beijing-based People’s Republic of China still refuses to budge from their “One-China” policy, Taiwan has become more receptive to the idea of “Two Chinas.”

The United States officially supports the “One-China” policy of the mainlanders and does not support Taiwan independence, but “insists on the peaceful resolution of cross-Strait differences” and “opposes unilateral changes to the status quo by either side.”

The People’s Republic of China is the most populous nation in the world, with a population of 1.35 billion. At 3.6 million square miles, China is also the third largest country in the world, just slightly smaller than the continent of Europe. Popularly referred to as ‘The Middle Kingdom’ in classical Chinese literature, the term China is believed to be a corruption of the Sanskrit word ‘Cina’, as seen in the ancient Mauryan era text, Arthaśāstra. The country shares its border with 14 countries and is fenced by the East China Sea, Yellow Sea, South China Sea and Korea Bay.

Politically, China practices a customized brand of communism, socialism and capitalism, a governing model which allows its 22 provinces to co-exist with five autonomous regions (Inner Mongolia, Tibet, Guangxi, Ningxia and Xinjian) and two special administrative regions (Macau and Hong Kong). The nation is effectively governed by the State Council, which is led by the President and Premier, under the watchful eye of the Communist Party of China and the People’s Liberation Army, which incidentally, is the largest active army in the world with 2.33 million servicemen.

China has the second biggest economy in the world with a GDP of approximately $10.9 trillion in 2015. It is also the United States’ second largest trading partner, with trade totaling $ 562.4 billion for the fiscal year 2015.

The Advent and Establishment of Communism in China
For over 4,000 years, China, either in part or totality, was ruled by a succession of royal dynasties. Similar to medieval European monarchies which ruled by the doctrine of the divine right of kings, the Chinese dynasties based their authority over the people of the land on the Mandate of Heaven - granted by god-kings that are credited behind the creation of the universe and the Chinese people.

The dynastic rule ended in 1912 when a weakened Qing Dynasty under Emperor Henry Pu Yi was overthrown during the Xinhai Revolution. A new republic was declared by the victorious rebels, and under the leadership of the newly-elected president, Dr. Sun Yat Sen, the Republic of China was born.

However, continued economic and food crisis, massive unemployment, political infighting, and threats of foreign occupation, along with a myriad of other socioeconomic and political issues, paved the way for the emergence and growth of the communist movement in the country.

Unlike in many other countries, communism did not initially flourish among the intelligentsia, and instead, resonated with the peasant underclass. The Communist Party of China was established in 1921 by Mao Zedong, the son of a farmer. Under the leadership of the future Chairman of the Communist Party of China, the party made great strides all across the nation, and by 1927, they went head on against the beleaguered Republican government in what is now known as the Chinese Civil War.

The communist forces emerged victorious and the People's Republic of China was established on 1 October 1949.

China’s Economic Miracle
China overtook Japan as the world’s second largest economy in 2010 after a furious and almost mechanical three-decade long economic boom. China’s phenomenal economic growth has been credited to its unique blend of socialist-capitalist market reforms initiated by Paramount Leader Deng Xiaoping (1904-1997). The reforms, officially known as Gaige Kaifang, are based on an earlier concept called The Four Modernizations put forth by former Premier Zhou Enlai (1898-1976).

Critics charged that the economic growth has come at the expense of human rights violations, environmental pollution and intellectual property rights. The Chinese government is also accused of using currency manipulation and restrictive trade practices to help the export-oriented local manufacturing industries, often in clear violation of international trade laws.

There are also growing fears that the Chinese economic numbers are being being manipulated. A confidential U.S. diplomatic cable leaked by Wikileaks notes that Li Keqiang, the Premier of the State Council and the second most powerful man in country, believes that the country’s “GDP figures are "man-made" and therefore unreliable.” Due to the size of China’s economy, a correction, whether intentional or otherwise, could massively impact the fragile global economy.

Central Issues

Trade Deficit
The balance of trade between the United States and China has been growing persistently higher in favor of China with each passing year. In 2015 alone, the trade deficit between China and the United States is larger than the GDP of Maryland, the 15th largest economy in the nation.

Critics argue that China gains unfair trade advantages over the United States due to its lowly paid labor, protectionist policies, lax environmental regulations and currency manipulation, and that the trend is costing the local economy jobs and tax incomes as manufacturers migrate overseas in search of cheaper manufacturing locations. Others, however, contend that in the absence of China, the deficit will still be there as the buying power of United States’ consumers and industries will compel trade with other countries instead.

U.S. – China Trade Deficit, 2006-2015 (billions)

Ownership of American Federal Debts
The massive $19.3 trillion federal debt is financed using government treasury bills, securities, bonds (savings, state, local and federal), notes and other monetary instruments.
These monetary instruments are sold to individuals (citizens and foreign nationals), companies (local and foreign) and foreign governments using different levels of interest rates (for the month of June 2016, the average Treasury interest rate is 2.267%).

China is the biggest foreign lender to the United States, holding various Treasury instruments valued in excess of $1.44 trillion (including Hong Kong), or about 7.5% of the total federal debt. Using the average interest rate cited above, China can look forward to earning about $32.6 billion in interest this financial year. More worryingly though, if China decides to divest a significant portion of its treasury securities, it could cause massive upheavals to the American economy.

Cyberwarfare is the latest threat to national security. Despite the United States’ military might, a coordinated cyber-attack could cripple the nation’s entire defence network. Beyond that, cyberwarfare could also be utilized for military and business espionage. Despite evidence linking China to a series of cyber-attacks on multiple targets across the developed world, the country has consistently denied any involvement.

According to the NSA, as of 2014, the United States military and government entities have been subjected to almost 700 cyber-attacks originating from China, with many being traced back to government installations. The figure may be conservative though. An NSA document released by whistleblower Edward Snowden in 2015 claimed that the Department of Defense has experienced at least 30,000 intrusion attempts, and that more than 50 terabytes of sensitive data, such as detailed schematics of fighter jets and radar technology, have been acquired by China.

In April 2015, President Barack Obama indirectly threatened China by issuing an Executive Order authorizing “sanctions on individuals or entities that engage in malicious cyber-enabled activities that create a significant threat to the national security, foreign policy, or economic health or financial stability of the United States.” He raised the issue again during a Joint Press Conference with Chinese President Xi Jinping in September 2015. President Xi responded by stating that both countries have agreed “to step up crime cases, investigation assistance and information-sharing” and “will not be engaged in or knowingly support online theft of intellectual properties.”

Candidates' Positions on China

Gary Johnson
Jill Stein


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