Not much discussion these days on this blog about China, but while everything else was going on, events in the US and China have led to a pretty bad impasse, revolving around China’s pegged and undervalued currency, but also pointing to the probable train wreck at the nearing end of China’s historic “market socialism” growth-surge.
Here’s a scary mental exercise: What happens if China suddenly unravels? From its own contradictions.
Across the United States, conversations about politics have not been this charged since the final days of the last presidential campaign. In the space of a week the passage of landmark healthcare reform and Google’s exit from China have made for anxious and animated discussion.
A war of words has broken out between China and the United States and the pundits are predicting that it will end in a full-blown trade war. The Obama administration thinks that China is manipulating its currency to gain an unfair trade advantage and increase its exports. China’s Premier Wen Jiabao’s adamantly denies the charge. “I do not think the renminbi is undervalued” he says. “And we are opposed to countries pointing fingers at each other or taking strong measures to force other countries to appreciate their currencies….If the United States uses the exchange rate to start a new trade war, China will be hurt. But the American people and US companies will be hurt even more.”
…while we’re on the subject of China, Obama had to make an unscheduled stop in Kabul to survey the wreckage of Karzai’s newly found independent streak… and his relations with China… and Iran.
Great moments in diplomatic timing are hard to distinguish when the practitioners are inscrutable entities. Afghan President Hamid Karzai’s visits to China and Iran within the week rang alarm bells in Washington which were heard in the Oval Office of the White House.
In Vietnam, the US puppets never went over. Obama’s inheritance from Bush is the rising influence of Iran… and makes it more likely that Obama will attack Iran, where Bush’s hands were tied by a losing war where Iranophiles were his last allies, and he could not.
After year-long optimism that the three decade old US-Iran standoff might finally come to an accommodation, the two sides are ratcheting up their rhetoric and in the process risk new escalation with unpredictable consequences.