[Anyone] China not happy with bushco.

[Thos Myers]

This is one hell of an article, turn this on to Peter, I know he'd enjoy reading this....> Date: Wed, 18 Jun 2008 22:12:20 -0600> From: busystagehand at gmail.com> To: kitts3 at hotmail.com> Subject: A New US Strategy?> > A New US Strategy in the Global Economy? Robert Borosage> Posted June 17, 2008 | 08:37 PM (EST)> > > --------------------------------------------------------------------------------> > > America's banker isn't happy. At the WTO, China's representatives call> on the US to halt the decline of the dollar that has contributed to> the rising price of food and oil (and racked up staggering losses in> the value to China's $1.5 trillion in dollar reserves). China's> leaders blame Washington's 'warped conception' of market deregulation> for the financial crisis that is rattling the world economy. Liu> Mingkang, the chairman of the China Banking Regulatory Commission,> scorned distorted US policies: 'Does moneymaking or doing business> justify the regulators in ignoring their duty for prudential> supervision and their job of preventing misbehavior?' Perfect. The> Bush administration is so lame, it is getting lectures from the> communist governors of China on how best to regulate the market.> > And when China talks, the US better start listening. Our trade deficit> with China last year jumped to an all-time high of $256.2 billion, the> largest deficit ever recorded with a single country, and the> equivalent of nearly one third of America's total trade deficit. The> Chinese have over $1.5 trillion in US dollar reserves, and are now> creating sovereign investment funds to purchase US companies and> properties at bargain level prices. China's willingness to lend us the> money we use to buy the goods they make with the jobs our companies> have taken there enables us to spend far beyond our means. When your> banker calls, you answer the phone.> > This week, Treasury Secretary Paulson meets with his Chinese> counterparts in Annapolis for what is called the Strategic Economic> Dialogue. Generally the US comes with a list of complaints about> Chinese mercantilist economic policies -- the manipulation of their> currency, the violation of copyright and patents, the protection of> their markets. The Chinese deny or ignore the accusations, offer a few> criticisms of the US and go on with business as usual.> > As Annapolis will once more demonstrate, US policy towards China is> simply befuddled. The problem is that while the Chinese have a clear> economic strategy, the US global strategy is the byproduct of> corporate lobbies and Wall Street political muscle. The Chinese> routinely flout the rules of the global marketplace, but under the> Clinton administration, the US -- driven by companies eager to set up> shop in China and bankers eager to cut the deals -- gave China> permanent most favored nation trading status and then let them into> the World Trade Organization without insisting on reforms or setting> up decent enforcement mechanisms for standards everyone knew the> Chinese did not and would not follow. About the only thing the US> pushed for in the negotiations was to try to open up Chinese financial> markets to US banks, a clear reflection of a trade policy that, in> Barack Obama's words, has been made for 'Wall Street, not Main> Street.'> > It isn't clear how long the old game can last. The dollar has lost> about half its value to the Euro, and US exports are beginning to> rise. But the Chinese (and the Japanese) have pegged their currencies> to the dollar and not allowed a similar adjustment (The Chinese have> allowed the renminbi to rise only about 20% to the dollar since 2005).> The result is that the US trade deficits with China keep rising; the> Chinese keep pocketing more and more dollars. The Chinese are> importing inflation that is ever more difficult to control. And the US> is exporting manufacturing jobs, and now service jobs, generating a> backlash against trade generally that could grow much uglier.> > What America needs is a clear strategy to sustain its middle class in> a global economy that has just integrated over 2 billion workers in> China, India and the former Soviet Union. Neither the Bush> administration nor John McCain shows any sign of having ever thought> seriously about this fundamental challenge to US security. McCain> seems satisfied to prate about the benefits of free trade, and accuse> Obama of believing America can't compete.> > This week in Flint, Michigan, Barack Obama called for the US to> develop its own national economic strategy, and began by putting forth> elements of a 'competitiveness agenda' for the US. He vowed to raise> taxes on the wealthy, capture some of the money now being squandered> in Iraq, and invest in a concerted drive for energy independence,> seeking leadership in the green industries of the future; in education> and training, from pre-school to affordable college; in a world-class> modern infrastructure from broadband to fast trains; in research and> development to keep the US the world leader in science and invention.> While conservatives were grousing about 'tax and spend,' sensible> observers might be more worried about whether his commitments were> commensurate with the size of the challenge ($10 billion a year in an> investment bank for infrastructure won't build many bridges, much less> seed modern transit).> > On trade itself, Obama called for 'strong and smart trade policies,'> promising enforceable protections of labor rights and the environment,> insisting on enforcement of current accords, saying 'we need tougher> negotiators on our side of the table -- to strike bargains that are> good not just for Wall Street, but also for Main Street'> > Obama argued that 'Allowing subsidized and unfairly traded products to> flood our markets is not free trade... We cannot stand by while> countries manipulate currencies to promote exports, creating huge> imbalances in the global economy. We cannot let foreign regulatory> policies exclude American products....China was not mentioned by name.> > With the depreciated dollar, US trade would move towards relative> balance with two major exceptions -- the rising cost of imported oil> and trade with China. The former requires a concerted drive for energy> independence, which both Obama and McCain, less credibly, have called> for. The latter requires a serious strategy towards a country which is> now our leading creditor.> > 'Our cooperation is an irreversible and unstoppable current,' China's> new Vice Premier Wang Oishan said. 'China needs the United States and> the United States needs China.' That is surely true -- but the current> current is unsustainable.> > How can America benefit from the expanded trade and opportunity of a> global economy, while avoiding a race to the bottom that erodes the> American middle class that is the pride and the foundation of our> democracy? How do we balance our relationship with China, even while> engaging that country to join in the effort to address global warming?> These are far more fundamental challenges to our security than the> threat posed by the scattered extremists of al Qaeda.> > While McCain is simply out of touch, Obama has put forth essential> elements of a different course. He's called for the US to get serious> about developing a national strategy for the new global economy. But> that can't be done without a much more candid debate about the big> gorilla in the room -- China whose communist governors are happily> lending us the rope to hang ourselves with.
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