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440 Revista del Instituto Español de Estudios Estratégicos Núm. 2 / 2013 thanks to the knowledge obtained while researching solutions to military problems. Thus, the Chinese government would be able to reduce the size of the armed forces (for example, the reserve or auxiliary troops) and instead allocate these resour-ces, together with those obtained through economic growth, to strengthening these types of programmes. The implications, in military terms, are obvious: on the one hand, military technology that does not exist in other countries could be developed, although this cannot be guaranteed a priori. And, on the other, the current level of technology in the Chinese military would definitely be enhanced and rolled out to other areas, resulting in much more effective military units. The technology gap between the U.S. and Chinese militaries – the main means of altering the power balance between the two nations - would be reduced. And the important thing at this point is that this is one of China’s most viable options for increasing internal demand and the funds allocated to infrastructure. Although they produce a lot, China’s largest public companies are not very efficient and are slow to introduce improvements in efficiency. However, it would be relatively easy to use public funds to incentivise the development and growth of a powerful economic sector engaged in the promotion of military technology that can later be put to civilian use. The economic resources are there on account of economic growth and the ease with which the size of the armed forces can be reduced. The people required to develop the military technology are also available and can very often be found working in jobs for which they are over qualified. We must also bear in mind that the People’s Liberation Army, together with the Communist Party, is one of the mainstays of present-day China and that its demands for technological innovation and improvement will therefore be catered to. It is no coincidence that one of the most important figures in China is the President of the Military Commission, a position traditionally held by the Chinese leader of the time. Consequently, the likelihood of this scenario becoming a reality is quite high. Bearing in mind the budgetary restrictions that will occur in the U.S. military, the overall balance of power between the two countries is going to change. 4.3 The reduction in savings and its implications for the trade surplus and financing capacity of the Chinese economy. The main reason for China’s high level of savings is the virtual inexistence of a public health system and retirement pension scheme. The latter in particular has prompted Chinese workers to save as much as possible for their retirement, given that China’s one-child policy means that children will not be able to support their parents in the future. In this regard, the Chinese government is implementing reforms in order to set up a public health system, although not of the dimensions of the European ones. It will then address the matter of retirement pensions. To a greater or lesser extent, these changes will reduce private savings while increasing private consumption, especially


REVISTA IEEE 2
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