US Defense Secretary Chuck Hagel came under some heavy fire Tuesday morning in Beijing…

‘China’s development can’t be contained by anyone,’ defiantly proclaimed China’s defense minister, Chang Wanquan.

‘The China-US relationship is neither comparable to US-Russia ties in the Cold War, nor a relationship between container and contained,’ he concluded. Wanquan’s statement was made not long after he stood shoulder to shoulder with his American counterpart at the People’s Liberation Army National Defense University.

‘Hagel was sharply questioned by Chinese officers,’ relays a Reuters report from the scene. ‘One of them told Hagel he was concerned that the United States was stirring up trouble in the East and South China Sea because it feared someday “China will be too big a challenge for the United States to cope with.’’’

Maybe…just maybe, the bold Chinese officer was referencing the US encirclement of the Middle Kingdom. Yet Hagel assured them that in ‘the American rebalance to Asia-Pacific…our strategic interest is not to contain China… It never has been.’

Just moments earlier, he formally re-announced the latest addition to the US presence in the Pacific — two more Navy missile defense ships deployed by 2017 — to protect from an attack from North Korea, of course.

Semantically, Hagel is right. The term ‘containment’ hasn’t been bandied about in reference to China.

‘Pivot’ has.

It was November 2011 when then Secretary of State Hillary Clinton uttered the phrase, ‘The United States stands at a pivot point.’ That meant shifting troops out of the Middle East…and moving more than half of the empire’s naval might to East Asia. Since then, we’ve written that Clinton’s pivot could go down in history as a declaration of a new cold war.

Can’t you hear the top brass cheering in the background?

In an interview, Colin Powell remembered an encounter he had with Mikhail Gorbachev in one of the last years of the Soviet Union.

‘Ah, General,’ said Gorbachev, ‘I’m so sorry, you’ll have to find a new enemy.’

Searching for the next few decades…all the US found were the Saddam Husseins of the world…and terrorism at large. How lame.

Alas, 25 years later, China has become America’s default adversary. From 2003-2012 China has increased its military expenditures by 175%. The U.S. over that period? Just 32%.

Granted, the US spends the most money on defense of all nations, and China is compounding a lesser military might than the US — but it’s still indicative of the buildup going on. And barring serious economic setbacks (such as those Greg Canavan sees in China’s — and Australia’s — future), we don’t see the trajectory changing.

As for the prospect of conflict between the two nations, the same powder keg — a group of uninhabited islands in the East China Sea — lies in wait of a spark.

The lines crisscrossing the map nearby represent the competing territorial claims of not only China and the Philippines, but three more nations as well. The long, U-shaped line is China’s claimed domain.

Speaking in Beijing this morning, Hagel kept American troops and treasure on the hook. Speaking about Japan and the Philippines, he said, ‘We have mutual self-defense treaties with each of those two countries. And we are fully committed to those treaty obligations.’

At the risk of sounding like a broken record, we remind you that the empire has a logic of its own. ‘America,’ wrote Independent Institute scholar Ivan Eland recently, ‘is now borrowing money from China to subsidise the defense of rich East Asian allies in their quest to militarily counter…well…China.’

Given the pettiness of the situation, let’s hope the region’s military buildup will prove a big waste of money. In the meantime, we’ll continue to follow that flow of dollars and cents on your behalf. At the very least, perhaps you can recoup some of your tax dollars with the right investments.

Addison Wiggin,

Contributing Editor, Money Morning

Ed Note: The above article was originally published in The Daily Reckoning US.

From the Archives…

Why You Should Avoid the ‘Fake Contrarians’ and ‘Do Nothing Investors’

05-04-14 – Kris Sayce