This is not a "Bash China" thread so much as a "Hit the Economic Panic Button" thread. Anyone share these "concerns" about China's economic influence on us? How do we "counter" them? I **** to say this but the only way to fight a powerful economy is with money. Where do we get the money to stand up and negotiate with China...(hint hint)...Saudi Arabia...people.
From the NYTimes...
Editorial--
Irresponsible Threats
Published: August 13, 2007
The last thing China needs is to give American politicians new excuses to erect protectionist defenses against Chinese imports. So it is stupefying that some Chinese officials — with the blessing of the government press — have been talking of using China’s enormous cache of American Treasury bonds as an economic weapon.
The threats started late last month when Xia Bin, head of financial research at a cabinet think tank, said China should use its gargantuan foreign exchange reserves, heavily invested in American Treasury bonds, as a “bargaining chip” in bilateral negotiations.
Then, in The China Daily last week, He Fan, an economist at the Chinese Academy of Social Sciences, warned that if China’s currency appreciated strongly (as many in Washington are demanding), the central bank would be ****** to sell dollars, “which might lead to a mass depreciation of the U.S. dollar.”
Such warnings may be an unsurprising response to some of the intemperate language coming from Capitol Hill. Nevertheless, they are playing with fire.
Senators Charles Schumer, Lindsey Graham and Charles Grassley, all backers of measures to punish China for undervaluing its currency, pounced. Mr. Grassley wrote to the Chinese ambassador warning that “they’ll only harden people’s views that China is purposely manipulating its currency to gain economic advantage.”
We have consistently argued against such punitive legislation, which could harm America’s economy by unleashing a trade war. But Beijing needs to realize that it would be an even bigger loser in a protectionist fight. Its development strategy hinges on maintaining strong export-led growth. And efforts to diversify its investments into assets beyond American Treasury bonds would likely, and rightly, be blocked if China were seen to use them to pursue agendas other than achieving better returns.
Last month, China invested $3 billion in Blackstone, a private equity group that, through its holdings, is one of America’s largest employers. One state-owned bank is investing billions in Britain’s Barclays Bank. Another is reportedly considering a stake in Bear Stearns.
Yesterday, in an attempt to calm passions, China's central bank announced that it had no plans to sell off its dollar assets.We hope that there will also be a cooling off in some of the rhetoric coming out of Washington.
http://www.nytimes.com/2007/08/13/opinion/13mon3-1.html?_r=1&oref=slogin
From the NYTimes...
Editorial--
Irresponsible Threats
Published: August 13, 2007
The last thing China needs is to give American politicians new excuses to erect protectionist defenses against Chinese imports. So it is stupefying that some Chinese officials — with the blessing of the government press — have been talking of using China’s enormous cache of American Treasury bonds as an economic weapon.
The threats started late last month when Xia Bin, head of financial research at a cabinet think tank, said China should use its gargantuan foreign exchange reserves, heavily invested in American Treasury bonds, as a “bargaining chip” in bilateral negotiations.
Then, in The China Daily last week, He Fan, an economist at the Chinese Academy of Social Sciences, warned that if China’s currency appreciated strongly (as many in Washington are demanding), the central bank would be ****** to sell dollars, “which might lead to a mass depreciation of the U.S. dollar.”
Such warnings may be an unsurprising response to some of the intemperate language coming from Capitol Hill. Nevertheless, they are playing with fire.
Senators Charles Schumer, Lindsey Graham and Charles Grassley, all backers of measures to punish China for undervaluing its currency, pounced. Mr. Grassley wrote to the Chinese ambassador warning that “they’ll only harden people’s views that China is purposely manipulating its currency to gain economic advantage.”
We have consistently argued against such punitive legislation, which could harm America’s economy by unleashing a trade war. But Beijing needs to realize that it would be an even bigger loser in a protectionist fight. Its development strategy hinges on maintaining strong export-led growth. And efforts to diversify its investments into assets beyond American Treasury bonds would likely, and rightly, be blocked if China were seen to use them to pursue agendas other than achieving better returns.
Last month, China invested $3 billion in Blackstone, a private equity group that, through its holdings, is one of America’s largest employers. One state-owned bank is investing billions in Britain’s Barclays Bank. Another is reportedly considering a stake in Bear Stearns.
Yesterday, in an attempt to calm passions, China's central bank announced that it had no plans to sell off its dollar assets.We hope that there will also be a cooling off in some of the rhetoric coming out of Washington.
http://www.nytimes.com/2007/08/13/opinion/13mon3-1.html?_r=1&oref=slogin
:1orglaugh
