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The 3rd session of the 11th National People’s Congress (NPC) ended on March 14. The annual meeting of the faux legislative branch of the People’s Republic of China dictatorship met for less than two weeks, having only opened on March 5. At the closing press conference, Premier Wen Jaibao stated, “Some say China has got more arrogant and tough. Some put forward the theory of China’s so-called ‘triumphalism’. My conscience is untainted despite slanders from outside.” He was referring to the increased public disagreements between China and the United States over a number of issues since the end of last year.
An issue Wen was particularly adamant about was one of long standing, the claim by officials, business leaders and economists in both America and Europe that the PRC has gained a trade advantage by setting a low exchange rate for its Yuan currency by government fiat. Despite the global downturn from the financial crisis and recession, China is expected to have a current account surplus of $450 billion this year. The U.S. trade deficit with China in 2009 in goods was $226.8 billion, and America has sent to the PRC over $1.7 trillion in deficits since 1999. China’s total international currency reserve from its surpluses is approaching $3 trillion.
Premier Wen denounced “finger pointing” in the currency manipulation controversy “A country’s exchange rate policy and its exchange rates should depend on its national economy and economic situation,” he said. Global Times, a publication of the ruling Chinese Communist Party, ran a commentary attacking the Western media. The paper argued,
“’It would be good for China,’ is a typical tone adopted to draw Chinese or international readers. But in reality, currency policy is so critical to China’s economy that a cautious approach must be taken. Any sharp appreciation will give rise to a series of negative chain reactions in employment, trade and many aspects of life.”
It is clear how China sees its situation. But when other countries react to Chinese policy, Beijing officials denounce them for adopting “protectionism” as if only China has a right to defend its economic interests and pursue job creation and growth.
The heightened sense of confrontation between Beijing and Washington does not, however, stem from trade problems which have been a sore point for a decade. A number of other issues of a direct, strategic nature have become more prominent since December.
The Chinese list of problems is much shorter than the U.S. list. Beijing has protested the sale of $6.4 billion in military equipment to Taiwan and the meeting between President Barak Obama and the Dalai Lama. These events focused attention on Beijing’s threats against democratic Taiwan and its human rights abuses in Tibet.
Beijing has reacted most strongly to the arms sale even though the U.S. pulled its punch on the deal. The Taiwan package is defensive in nature, consisting mainly of utility helicopters, air defense missiles, and mine clearing ships. The U.S. did not fulfill Taipei’s request for more F-16 fighter-bombers which the island needs to contest air superiority over the Taiwan Strait or attack a Chinese invasion fleet.
On the eve of the NPC, Deputy Secretary of State Jim Steinberg and National Security Council Senior Director for Asian Affairs Jeffrey Bader were sent to Beijing to smooth relations. Their mission failed. In reporting on the visit, state-owned China Daily ran the banner headline “U.S. urged to respect China’s core interests.”
That the United States sent envoys to make amends only confirmed Beijing’s wisdom in taking an assertive stance, confident that the Obama administration was looking for ways to appease Beijing. On March 7, three days after the American envoys left; Chinese Foreign Minister Yang Jiechi stated,
“The responsibility for the difficulties in China-U.S relations does not lie with China…. The United States should properly handle the relevant sensitive issues and work with the Chinese side to return China-US relationship to the track of stable development.”
China has not acknowledged its own confrontational actions since December. Beijing has backed Tehran’s rejection of President Obama’s “open hand.” Even Iranian President Mahmoud Ahmadinejad’s claim that Iran is now a “nuclear state” has not lessened Chinese support. Minister Yang repeated China’s line at the NPC, “We don’t think diplomatic efforts have been exhausted.” Negotiations have been held since 2003 without stopping the advance of Iran’s nuclear and long-range missile programs. Beijing understands the process very well, and is happy with the results. A stronger, anti-American Iran is a strategic asset to China.
In her January 29 Paris speech, Secretary of State Hillary Clinton said, “As we move away from the engagement track, which has not produced the result that some had hoped for, and move forward on the pressure and sanctions track, China will be under a lot of pressure to recognize the destabilizing impact that a nuclear-armed Iran would have.” Global Times replied in a Feb 10 editorial, “China has economic stakes in Iran, and China is determined to protect its interest through diplomacy….. Some voices have recently surfaced in the Western media asking for isolating China on the issue. These voices are extremely shallow and ludicrous.”
Another game changer was the December UN climate conference in Copenhagen. President Obama experienced Chinese intransigence personally. A year-long effort to cooperate with Beijing turned into a nasty confrontation with the fate of the world economy in the balance. Leading the BASIC bloc (Brazil, South Africa, India, and China), Beijing demanded crippling restrictions on the U.S. economy while proclaiming its own freedom to do as it pleases in pursuit of growth. President Obama rejected the demand, and has since taken a harder line on matters of trade and competition. The conflict over climate policy (which has never been about the weather) will continue, as another UN conference is scheduled in Bonn next month.
If the Steinberg-Bader mission signaled that some factions in the Obama administration wants to return to the earlier engagement policy. Beijing will see this as a U.S. retreat due to a lack of will, and will press its own agenda harder.
A March 4 commentary in Global Times, written by Rong Xiaoqing, a Chinese journalist based in New York City, was entitled “American softness bodes poorly in competitive era.” Rong wrote of spoiled Americans “who whine about so much that they will find it difficult to cope with a world where nations like China, India and Brazil are becoming rivals.”
A current best seller in China is the book The China Dream, by People’s Liberation Army Colonel Liu Mingfu, a professor at the National Defense University. He urges China to replace the America as the preeminent global power by building the world’s largest economy and using its wealth to expand military capabilities. “If China’s goal for military strength is not to pass the United States and Russia, then China is locking itself into being a third-rate military power,” he writes. A March 10 editorial in Global Times tells “the world to be prepared for China’s first aircraft carrier…. China has the legitimate right to build up its naval force.” The editorial goes on to talk of aircraft carriers in the plural and “other advanced weapons.”
From its aggressive trade policy to its military buildup, and from its bloc politics at the UN to its support of rogue regimes around the world, Beijing’s rise is generating confrontations with American interests than can no longer be ignored.
China's dream is to be treated as an equal by every country, big or small, in the world. And China would like to do the same. This is not arrogance, arrogance is treat some countries with respect and others as unimportant. No countries has the right to dictate others thinking they are the correct ones and others are wrong. There are no leaders in the world do not want the best for their people, want their people to be happy, healthy and prosperous. Governing a country is never easy,specially very poor ones. What these countries need is help, understanding and friendship. When their economic situation improve, they will be easier to govern. Pushing a poor country beyong its breaking point can not be right.
*heh* I guess you never heard of the "One China" policy. The same can be said of Taiwan and Tibet, who China actively oppresses. How do you feel about their rights? Or do you view them as just cannon fodder to be trampled under by the red boot?
The bottom line is that we bailed out China from Tojo and the Imperial Japanese. Uncle Joe Stalin back stabbed us, and 20 million dead people later Mao's in charge and now we have a new red threat.
China dream to increase trade with every country including all countries in Europe and the US. China dream not only to increase exports but also imports from every country. Trade will increase the wealth and living standard of every country. China is trying to improve its trade imbalance in its own way: by increasing imports. So far in 2010, China reduced its trade surplus by 55%. China increased its imports by 85% in January and another 44% in February. China had been doing a fairly well job of running its economy. China does not need anyone, anyone to tell China how to conduct its business, specially someone who is having trouble conducting sound business. China is far, very far from having all the answers, China is trying to solve each problem as it come up the best way China can.
Exports are not everything there, Mr. Buffet. America has proved under Obama it can grow at 6.0% with up to 20% unemployment in its major urban manufacturing sectors and absolutely no unrest.
If China was really a good country, they would let their provinces balkanized like Russia, and then use the already existing diplomatic avenues to unite Asia under the color GREEN, not RED.
But no. They still have to keep the old commie dream alive of a red Earth. Excuse me while I puke.
The big AIPAC shindig is coming on this week. It is poignant to compare what China did for America in the last 30 years, and what Israel did, and what the Jewish pols of America are advocating for relations with those two nations. Without China's help, the USSR would not have crumbled that quickly. China brought America 30 years of good life and glory – low inflation, well priced consumer products (99.9% of which were of high quality, which resulted in rising asset prices – RE, securities, you name it). In comparison, the biggest "thing" that relations with Israel brought for America was probably 911, and the two wars (still going) that followed. Yet the Washington pols supports giving more of the hundreds of billions (that America does not have) to the Jews of israel, and to punish the Chinese (for what? for being frugal and hard working?). Makes perfect sense?!!
The current malaise in America is largely the fault of the Bankster Clan, who thrust their multi-trillion dollar fraudulent schemes (CDS and other alphabet soup fraud that not even Krugman can explain – so he blames China instead) on the world, causing untold financial woes on anyone stupid enough to be taken. Yet it is well known that the Clan has such a grip on Congress, not even a single one of the fraudsters has been prosecuted. Money buys protection. Instead Washington was "compelled" (I guess those hundreds of millions in bribes – nee campaign contributions, are rather compelling) to give the Banksters another $14 Trillion ($2 Trillion in cash, and the rest in government guarantees), so they can give themselves RECORD BONUSES 2 years in a row ($20 Billion just for the few big Wall Street firms in 2009), even as the average American gets decimated financially. To divert attention from this crime of the century, the pols are blaming everyone but themselves, and China just comes in "handy."
If America is truly serious about export and good paying jobs, America would have removed all barrier to exports, and concentrated on exporting what America has competitive advantages, in the high tech fields. But that'd be too easy, y'see, instead, ludicrous pols demand that China must shoot itself in the foot and stop exporting, and his "promise" is that Americans will make underwear and t-shirts and cheap tires again (even though everyone knows that there are at least 20 other nations that can make the same low end goods 30% cheaper than Americans ever could).
And you guys "elected" these geniuses to office? I think you deserve every bit of the "brilliance."
I guess some people do not value their freedom.
China took American dollars to open up cities and end food shortages. Are you kidding me with the USSR? Ever heard of the nuclear arms race, or manipulation of the oil market?
The cheap labor provided by China could have, and actually was, found other places. Japan in the 1980s. Domestically in the 1960s and 1970s. Robotics in the 1990s and until present day.
I cannot think of an engagement we've ever had with Israeli proxies. However right off the top of my head we have two with China: Korea and Vietnam.
Exports do not necessarily mean good paying jobs. What it means is during periods of protectionism, ie, high tarrifs, the exporting country starves and the free countries loose their freedom.
I love how liberals prop up China because it is a red state, and then accuse someone like George W. Bush of being a dictator.
I would be surprised if China exists in the next 30 years. They are a powder keg of many different ethnicities and keep using the same national bank to provide thin margins on exports.
China's inherent contempt for the US capitalistic system and their want to "weaponize" money shall be their undoing.
Eerie is right!! Korea? Vietnam? Were those in the last 30 years? 911 was in the last 10, and it was 90% due to Washington's being "kept" by Tel Aviv (the Israeli leaders openly boasts so). This AIPAC conference, one of the most notorious annual feeding trough in which greedy pols go for the slop, will again disappoint, as it puts Israeli interests before that of Americans. To cover up the stink, the "already sold" pols have to blame someone, so it is China that is blamed, even though China was the main benefactor to America's good life in the last 30 years.
Of course export matters. China clearly shows what capable leadership is. With concerted dedication, a China rail industry grew from almost nothing a short 5 years ago, to now project an output of US$50 Billion between 2009 and 2013, much of that in exports. How does that compare with exporting wars and deaths and pain and suffering for millions?
Life is about choices. America has SO MUCH, and yet the choices it make leaves much to be desired.
Washington being kept by Tel Aviv?
Every day brings another bashing of Israel by Obama & his ilk.
Eerie: Actually the margins on higher tech (such as high speed rails) exports from China do have respectable margins, even though the prices are 15% less than the next competitor. Engineers in China make only 1/5th that of their counterparts in the West, and they now know more than their counterparts in the West, as China runs the largest and fastest high speed rail project in the world, the latest being the 1,000 km, 380 kph rail line between Wuhan and Guangzhou, built in a short 4 years including planning. In contrast, the $8 Billion promised by the Prez. for high speed rails in America disappeared into the bottomless sinkhole overnite, with nothing to show for it.
It's all in the leadership. Why do you think only about 20% of Americans think that Congress is doing a good job?
Think of the $14 Trillion that the "bought" pols threw at the Bankster Clan after the financial debacle. if only 1/10th was (in reality less than 1% was) spent on Mainstreet, America could and would be developing real export growth. Instead, Americans CHOOSE to let the pols run amok and enable RECORD BONUSES for the Bankster Clan members (US$20 Billion alone for the few major Wall Street houses of fraud in 2009), and Americans deserve every bit of it.
The yuan appreciated 21% from 2005 to 2008. US trade deficit with China went up a similar amount. But using the yuan as an excuse for US irresponsibility will not solve its problems. As long as the US spend more than it make, it will never get out of deficit. Outside the US and EU, the rest of the world had a trade surplus of over $ 10 billion with China each month so far this year. All this inspite of the low yuan. China will not let the US distabilize its economy like Japan did in the 1980's. If the US want to remain a dominant superpower, stop complaining and show some responsibility. Nobody will stay economically healthy by spending more than what he make.
[...] The China Dream | FrontPage Magazine [...]
China wants to be the Asian super power and will do everything in it's power to achieve that goal. India is really China's main competition to that goal, not the US. China has always stated that Taiwan is a Chinese territory and that has never changed. They always object to US arms sales to Taiwan the same way the US objects to Russia selling arms to Iran.
This naive clandestine marxist President and his post menopausal closet communist hag inept Secretary of State . It is now believed that the Russian S-400 Triumf (Chinese designator HQ-19) surface-to-air missile system was a joint development programme with China. The S-300 is already deployed and operational throughout China. The S-300 is one of the most advanced multi-target anti-aircraft missile systems in the world and has a reported ability to track up to 100 targets simultaneously while engaging up to 12 at the same time. It has a range of about 200 km and can hit targets at altitudes of 90,000 feet (27,432 meters). The F-15, F-16, F-18, B-52s, and C130J Gunships are target drones to this S-300 multi-target anti-aircraft missile system. And the S-400 will be a considerable upgrade. Of course Obama cancels the F-22 and the B-2 Bomber contracts. Before the end of his Presidency, China very well might just sieze Tawain – there is little we can or will do about it.