That America faces a growing threat from China's rise is a story that's gotten a lot of attention in recent years and is garnering some heated rhetoric on the campaign trail this year. Former Wall Street executive Peter Kiernan takes it to another level in his new book, as the title suggests: Becoming China's Bitch.
"Paranoia is appropriate for us in relation to China," he writes. "What we are facing is nothing less than a test of American independence."
Unlike what you might have read by other pundits -- or heard during the GOP debates -- Kiernan does not necessarily believe the U.S. should take a hard line with China or that conflict is unavoidable. (See: Niall Ferguson: U.S. Empire in Decline, on Collision Course with China)
"Our fate is connected with China, no mater what," he says. "The only way to manage this process is much more fully embrace them." (See: Goldman's Jim O'Neill: "Our Future Prosperity Depends on China")
And by "embrace" Kiernan does not necessarily mean befriend or kowtow. Instead, he says America needs to have the "same sort of alertness with China" today as we did with the Soviet Union during the Cold War. In the 1950s, '60s and '70s, America's "finest minds" were analyzing every statement and policy action by the Russians, he recalls. "I'm not sure we have anybody looking at China in the same way and China is a much bigger opportunity on the upside than Russia ever was."
As with many others, Kiernan is concerned about America's "co-dependent" relationship with China, where we support their export-driven economy and they fund our deficits.
In the not too distant future, China's growing middle class will outnumber America's total population. As China's internal demand grows, their "export machinery starts turning inward," he predicts. "China's necessity to own dollars will be far less strong."
Rather than dumping Treasuries, which would be self-defeating, China will over time simply buy less of our debt and transition more to a yuan-based economy, Kiernan continues.
"They have built a replacement [for U.S. spending]; what have we done to replace that lending capability?," he asks, further adding: "Codependent relationships rarely last forever and they don't end pretty."