431 Ángel Rodríguez García-Brazales, Jorge Turmo Arnal y Óscar Vara Crespo The effect of global economic imbalances on the military strategy of the United States and China. campaigns). Given the situation, the U.S.’s initial consideration of the ASB project came about because the gap in capital and innovation between the two armed forces had widened to such an extent that China saw it as a sufficient deterrent. The key question we are aiming to answer in our analysis is whether the U.S.A. is in a position to successfully take on this eminently economic challenge, bearing in mind that widening the “gap” would require that the U.S. invest significantly more in defence technology than China. And, as we have seen, this means that the military budget would have to be increased, not decreased as it has been in recent years. Therefore, the critical point is that it would have to confront a country that is its main foreign creditor. As we will demonstrate in the last part of this paper, the Chinese government currently has enough financial leeway to drastically alter the financing conditions of the U.S. Treasury and, therefore, the resources it can devote to significantly increasing this “gap”. 3. Global Imbalances: meaning and implications for economic relations between the United States and China. 3.1 Comparative data. Firstly, to be able to compare the major changes that are occurring, we have prepared a table showing demographic and economic data on the United States and China from 2000 to 2012 (2008 in the case of the Current Account Balance). Table 1. Population, GDP and Current Account Balance of the United States and China from 2000 to 2012(*) YR. Population USA Population China GDP USA GDP China Current Account USA Current Account China 2000 284 1,280 9.898 1.200 -416 20.5 2005 298 1,318 12.564 2.260 -745 132 2012 317 1,377 15.684 8.230 -677* 420* Source: International Monetary Fund and the World Bank. Prepared by the authors. Data on population is in millions of people, and data on GDP and Current Account Deficits or Surpluses is in billions of dollars. (*) Data on the Current Account is from 2008, which was the last year for which comparable figures are available. The first issue here is the narrowing of the gap between the GDP figures of the two countries during the period. While estimates differ, it is obvious that China will catch
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