Open Book: Don't Ignore the China Threat

Editor's Note: With this column, TheStreet.com debuts "Open Book," a new feature where authors of new and upcoming books can share their ideas with you, the readers.

The Coming China Wars describes how the emergence of China as an economic superpower has given rise to a host of conflicts between China and the rest of the world and within China itself.

As I illustrate in this book, by the iron laws of economics, China has put itself on a collision course with the rest of the world. Because of these iron laws, the coming China wars will be fought over everything from decent jobs, livable wages and leading-edge technologies to strategic resources such as oil, copper, and steel and eventually to our most basic needs -- bread, water and air. Unless all of the nations of this world -- including China -- immediately address these impending conflicts, the results will be catastrophic.

I wrote The Coming China Wars in the hopes of averting that catastrophe. But to fully understand the genesis of the book, it's important to first understand what I do.

I'm a business professor at the University of California-Irvine and, besides conducting research, I teach macroeconomics to MBA students, many of whom come from China (both the People's Republic of China [PRC] and Taiwan).

Over the past seven years in those duties, it has become crystal-clear to me that virtually no macroeconomic or stock market subject can be discussed without including the China piece of the puzzle. Whether the subject is job or wage growth, inflation, currency fluctuations, the conduct of discretionary fiscal or monetary policy, the impact of the burgeoning U.S. budget and trade deficits, or whether the U.S. stock or bond markets will be bullish or bearish, all economic roads lead to China.

Given China's importance on the world economic stage, it was natural for me to shift my research focus to China. What I saw was far more disturbing than encouraging. Indeed, while American politicians, policymakers and journalists have been dangerously preoccupied with events in the Middle East, China has emerged, largely unchallenged, as an economic superpower with an ever-growing ability to exert significant influence over U.S. economic, financial and political institutions.

Before I expand further on the growing dangers of America's loss of economic and political independence to an emergent China, allow me to offer one additional biographical note that may be of interest to TheStreet.com readers and help explain my motivation for writing The Coming China Wars. I publish a free weekly investor newsletter published at www.peternavarro.com.

This endeavor is dedicated to a "George Soros/Jim Rogers" type of analysis. That is, I look at how broad macroeconomic trends such as China shooting down a satellite in space or a move by the Bank of Japan to raise interest rates will affect U.S. stock and bond prices as well as currency exchange rates.

My broader point here is that any investor who truly wants to understand how broad market trends will be affecting financial markets must inevitably become an astute and dedicated China watcher. Reading The Coming China Wars -- and the many books I cite -- will go a long way toward helping TheStreet.com readers in that endeavor.

My book will also help you understand more about the risks (and potential rewards) of investing not just in China, but globally.