Nonsensical fear of China

Posted by Geoff M. Beck on June 27, 2005, 10:46 PM | #

> The above explanation is of course a bit simplified but it gives the essence of the story.

I’m starting to understand Effra’s decision better.

However, any talk of bullying, war, trade retaliation is stupid and counterproductive. Futhermore - REMEMBER THIS AMERICANS: your gov’t asked China to ‘peg’ its currency to ours 8 years ago.

Two Big Economic Problems
1)
If China’s currency floated, as they collected dollars through a trade surplus their currency the Yuan would appreciate. Yet, this does not happen as it would with other nations.

2)
Most nations, if they experienced a similar trade surplus would use the excess currency to purchase capital goods (imports) and spend the money on domestic improvements. Yet China doesn’t have to do that - AMERICAN and other FORIEGN businesses build their infrastructure by moving entire factory systems to the China

A Big Political Problem

China holds

of US currency. Suppose China decides to take Taiwan, could we oppose them? All they would have to do is dump our bonds on the market, and our economy is paralzyed by hyper inflation. It is that simple. Poof - the cheap crap at Wal-Mart is gone. We could see similar confrontations in Central Asia.  We are vulnerable, don’t forget that.

Sure, it will hurt them… but maybe Taiwan is more important, they make the decisions - not us.

Posted by Kubilai on June 27, 2005, 11:28 PM | #

they make the decisions - not us.

Remember also, they do not play by the same rules as we do either.  They don’t seem to have that nagging back problem the West does that is due to the overbearing weight of guilt, conscience, fair play, human rights blah blah blah.

BTW Geoff, I wish you left your comment as it was originally.  That was quite funny.

Posted by john rackell on June 27, 2005, 11:29 PM | #

Take the trade deficit:  What it means is that China sends lots of goodies (industrial products) to America and for most of that all they get in return is bits of paper (U.S. dollars).  THAT should worry Americans?
So the Chinese are incredibly stupid or they are playing a game we don’t understand, or daren’t acknowledge. By most reckonings the Chinese aren’t stupid.

It seems like a sweet racket that Americans should be rejoicing about to me!
It’s a racket. At least you recognize part of the truth. The Chinese may be our loan shark.

And because the panic is so silly, the Dems have to get really shrill in an attempt to disguise their silliness.

Enoch Powell said it best:

“The supreme function of statesmanship is to provide against preventable evils. In seeking to do so, it encounters obstacles which are deeply rooted in human nature. One is that by the very order of things such evils are not demonstrable until they have occurred: at each stage in their onset there is room for doubt and for dispute whether they be real or imaginary. By the same token, they attract little attention in comparison with current troubles, which are both indisputable and pressing: whence the besetting temptation of all politics to concern itself with the immediate present at the expense of the future.”

This is as much a statement of our current economic predicament as it is about immigration.

He is getting hysterical about America’s foreign debt.  He is particularly concerned that the Chinese have been buying lots of U.S. bonds as a way of putting their trade surplus into a piggy bank.

Tell me how we (the US) are going to pay off our massive debt [besides pimping our daughters to the Chinese].

Something you don’t seem to acknowledge vis a vis the present situation is that the US has sold off its industrial base machine tool by machine tool. In event of conflict this is an irreplaceable loss. The Chinese have been heavily capitalized and tooled up by Western companies (and their own prodigious savings - financed by US Fed credit profligacy).

If push comes to shove the Chinese will lose title to its USBonds and the US will lose title to all the outsourced industry that was formerly owned by American companies. Net-net the Chinese will be the absolute winners of this mutually assured destruction. We can’t shop the confetti formerly known as Chinese-owned US Bonds to other buyers and where do we get the savings to kickstart another round of industrialization. The Chinese on the other hand will be the proud owners of a complete industrial base. We have no savings of our own and nobody would lend to us. So your MAD scenario is wholly unconvincing. But why should we let it get to that in the first place?

Posted by john rackell on June 27, 2005, 11:46 PM | #

If anyone wants a stunning live demonstration of the US industrial dismantling machine tool by machine tool check out this PBS Frontline documentary on Walmart:

http://www.pbs.org/wgbh/pages/frontline/shows/walmart/view/

Hit the video for Chapter 2 titled “Muscling manufacturers”. It’s a 7min clip.

The highlight is the auction at Rubbermaids headquarters of their humongous plastic injection molding machine for $800K to incidentally Chinese buyers (all countries though were feasting on the corpse).

It starts at about 5:20 in the clip.

The US has no savings. We are going to sweat a long time in hell to restore the capital that machine represents.

I don’t think we’ll get it back when peak oil hits and the prices of everything skyrocket.

Posted by John S Bolton on June 28, 2005, 12:23 AM | #

Is this too difficult a challenge: defend the morality and practicality of receiving stolen goods via trade financed by central banks which obtain the funds for this trade financing by looting their taxpayers, savers or borrowers?

Posted by James Bowery on June 28, 2005, 02:06 AM | #

Mainland China makes their move.  There’s a coup in Taiwan in a way the mainland Chinese plausibly deny.  There is a general call for US help but the US does nothing.  Then Japan starts to act and again calls for US help.  Again, the US does nothing.  All the troops are already committed in the Middle East.  Taiwan dumps its US debt instruments.  None of the traditional sources can take up the slack.  The games that used to get played with the Carribean banks to cover up this sort of thing don’t work anymore.  Interest rates jump—more deficits.  Gold soars over $2000/oz.  Dollar dives aganinst the Euro.  Imports to the US all but cease.  Private contractors in the Middle East desert because they’re being paid in dollars.  US military units in the middle east are no longer really under government control.  US units are rapidly recalled from the Middle east and governments hostile to the US arise there.  A point of leverage over US use of military force that no one counted on arises:  Hispanic - Anglo conflict in the US can be easily fomented by arming both sides.

Posted by jonjayray on June 28, 2005, 02:37 AM | #

Any attempt at a mass dumping of US paper would render it worthless so it won’t happen

Posted by James Bowery on June 28, 2005, 02:43 AM | #

What is the net present value of Taiwan’s tax base?

Posted by jonjayray on June 28, 2005, 02:43 AM | #

There is a reasonable argument that defence industries should be kept domestic but that has no implications for your buying a Chinese electric kettle from Wal Mart

Posted by James Bowery on June 28, 2005, 03:00 AM | #

Well here’s a clue:

A $1T 30 year mortgate at 6 percent interest requires monthly payments of about $8B or yearly payments of about $100B.  Taiwan’s GDP is more than $500B/year.

This seems like a pretty tempting deal—especially if you can start to use the US’s natural resources at rock bottom prices.

Posted by Drew Fraser on June 28, 2005, 04:04 AM | #

Even paranoiacs have real enemies! Consider the deafening MSM and governmental silence re the issues raised in this link:
http://www.theepochtimes.com/news/5-6-24/29770.html

Here is an extract:

Chen Yonglin: CCP Believes Australian Government Can Be Bought
Jun 24, 2005

Chen Yonglin at the press conference on June 22, 2005 (The Epoch Times)

When Chen Yonglin, the former Chinese Communist Party (CCP) diplomat seeking asylum in Australia, first announced his intention to defect, he told the world about the close relationship between the CCP and the Australian government, and stressed that the CCP operates a 1,000 person spy network in Australia. Since then the media has been trying to follow up on this sensitive topic, but Chen has remained silent. On June 22nd Chen held a press conference during which he began to elaborate on his knowledge of the dealings between the two governments. What follows are excerpts of Chen speaking at the conference.

China Seeks To Make Australia Part of Its “Great Border Area”

“In February of 2005, Zhou Wenzhong, the Chinese Vice Minister of Foreign Affairs, held a meeting at the Chinese Embassy in Australia with the ambassadors and consuls general to Australia and New Zealand, and the general consuls and the diplomats in charge of political affairs. I accompanied Qiu Shaofang, the general consul of the Chinese consulate in Sidney, to attend the meeting.

“The main purpose of the meeting was to implement the decision made during the 10th Meeting of the Chinese Diplomats in Foreign Counties held in mid-August of 2004, at the suggestion of Hu Jintao, the General Secretary of the CCP, to make Australia part of the “Great Border Area” of China. They asked each consulate to provide its point of view and suggestions for the next step.

“During the meeting, Zhou Wenzhong shared information about the CCP Central Government’s strategic planning toward Australia and the United States, which is related to the close ties between these two countries. The CCP wants to break through the military union of the two countries and turn Australia into a second France. It hopes to shape Australia into a country that dares to say “no” to the United States.

“China first started crafting its plan to reshape Australia when it learned that Australia was planning to give up ties with Asia in favor of stronger ties with the United States. At that time the free trade negotiations between Australia and the United States were at a climax and Australia had high hopes of being included in the North America Free Trade Agreement (NAFTA). Meanwhile, Australia had a big court case pending with Guangdong Province in China, concerning natural gas, which was making it less and less popular with the Chinese government.

****
“In 2003 when Hu Jintao visited Australia he received unprecedented treatment in Canberra. Bob Brown, a congressmen belonging to the Greens- the opposition party- was not allowed to enter the building where congress was being held. This was done to prevent the attendance of dissidents and Falun Gong practitioners that might have shown up as the congressman’s guests. Hu Jintao was delighted and commented to his staff that this was a sign that the Australian government could be influenced.

****
The CCP Thinks The Australian Government Can Be Bought

“Over the past several years, Chinese officials have successfully built close personal relationships with their Australian counterparts, all for the purpose of establishing leverage in the Australian government. The CCP is convinced that the Australian government can be coerced to follow its aims through application of economic pressures and incentives. It plans to use economic pressure to force Australia to cave on political and human rights issues.

“The dialogue on human rights between China and Australia over the past several years was merely a show put on to appease the Australian public. In fact, there was no progress made. When high-ranking Australian officials visited China, they did not raise any human right issues. I knew what was said during their visits, because a summary news brief of each visit was sent to the consulate.”

****
Chen ended the press conference with this comment: “I have witnessed too many secret deals between the Australian and Chinese governments. I am really concerned that I will be betrayed. Therefore, in case I should run into sudden misfortune, I have spoken my mind to the public.”

Please see Part I, ”Chinese Defector Tells of Government Plot” and Part II, ”Chen Yonglin Describes Abduction by Chinese Agents in Australia”.

Posted by jonjayray on June 28, 2005, 05:28 AM | #

An Australian government that was not careful about stepping on one billion toes immediately to its North would not be a responsible government

Posted by jonjayray on June 28, 2005, 05:29 AM | #

OK
Make that ten billion toes

Posted by Tournament of Champions on June 28, 2005, 06:56 AM | #

The Epoch Times is one of those many overseas CIA-funded fronts spouting out whatever serves the neocons, whether true or not.

Posted by James Bowery on July 14, 2005, 07:15 PM | #

Top Chinese general warns US over attack
>By Alexandra Harney in Beijing and Demetri Sevastopulo and Edward Alden in Washington
>Published: July 14 2005 21:59 | Last updated: July 15 2005 00:03
>>

China is prepared to use nuclear weapons against the US if it is attacked by Washington during a confrontation over Taiwan, a Chinese general said on Thursday.

“If the Americans draw their missiles and position-guided ammunition on to the target zone on China’s territory, I think we will have to respond with nuclear weapons,” said General Zhu Chenghu.

Gen Zhu was speaking at a function for foreign journalists organised, in part, by the Chinese government. He added that China’s definition of its territory included warships and aircraft.

“If the Americans are determined to interfere [then] we will be determined to respond,” said Gen Zhu, who is also a professor at China’s National Defence University.

“We . . . will prepare ourselves for the destruction of all of the cities east of Xian. Of course the Americans will have to be prepared that hundreds . . . of cities will be destroyed by the Chinese.”

Gen Zhu is a self-acknowledged “hawk” who has warned that China could strike the US with long-range missiles. But his threat to use nuclear weapons in a conflict over Taiwan is the most specific by a senior Chinese official in nearly a decade.

However, some US-based China experts cautioned that Gen Zhu probably did not represent the mainstream People’s Liberation Army view.

“He is running way beyond his brief on what China might do in relation to the US if push comes to shove,” said one expert with knowledge of Gen Zhu. “Nobody who is cleared for information on Chinese war scenarios is going to talk like this,” he added.

Gen Zhu’s comments come as the Pentagon prepares to brief Congress next Monday on its annual report on the Chinese military, which is expected to take a harder line than previous years. They are also likely to fuel the mounting anti-China sentiment on Capitol Hill.

In recent months, a string of US officials, including Donald Rumsfeld, defence secretary, have raised concerns about China’s military rise. The Pentagon on Thursday declined to comment on “hypothetical scenarios”.

Rick Fisher, a former senior US congressional official and an authority on the Chinese military, said the specific nature of the threat “is a new addition to China’s public discourse”. China’s official doctrine has called for no first use of nuclear weapons since its first atomic test in 1964. But Gen Zhu is not the first Chinese official to refer to the possibility of using such weapons first in a conflict over Taiwan.

Chas Freeman, a former US assistant secretary of defence, said in 1996 that a PLA official had told him China could respond in kind to a nuclear strike by the US in the event of a conflict with Taiwan. The official is believed to have been Xiong Guangkai, now the PLA’s deputy chief of general staff.

Gen Zhu said his views did not represent official Chinese policy and he did not anticipate war with the US.