China

[nanook]

I doubt China can think, any more than the US can think. Nation-states are artificial mental concepts. They do not eat, drink, or think. Individuals are capable of thinking. Chinese officials are capable of thinking. They are sending their offsprings to the US, and sending their ill-gotten loot from corruption to the US banks (capital flight). That should say something about what they really think. Sure, the defense minister may talk some trash; is there any defense minister anywhere in the world who doesn't talk trash? After all, their reason for mooching off the taxpayers is supposed external threat.

Holding 2 trillion of US debt is not the reason why the Chinese have any power; the FED can print up 2 trillion in the next 5 seconds and pay off the debt if it so desires. What makes Chinese relevent is their productivity and export helping alleviate the inflationary pressure inevitably would swamp the US economy if the government spending programs are not matched to real goods and services. It's their continued ability to export real goods and services to the US that makes them relevent to any discussion. As the old saying goes, if you owe a little money to the bank, it's your problem; if you owe a lot of money to the bank, it's the bank's problem! We certainly owe the Chinese central bank a lot of money . . . big enough to make quite a few heads roll over there if we default. That's why it's in the personal interest of Chinese officials to continue buying US debt . . . a big part of it will cotinue to strengthen the US military and widen the lead over whatever pitiful scrap that the Russians care to sell to their neighbor.

[protagonist]

Both parties are incredibly stupid to allow this to happen. The debt will cause incredible damage to both economies if it is ever paid, and will do so even if it's not. Paying the debt would suck huge amounts of money out of the American economy, which means Americans are no longer able to buy Chinese goods, which would be catastrophic for the Chinese economy. Conversely, if it is not paid, everyone would lose confidence in the American bonds and stop lending them money, which also would also mean a catastrophe for the American economy and hence the Chinese.

[nanook]

There are no "parties," only individuals who are capable of thinking for him/herself. US trade deficit is the result of government budget deficit: all the money printed for the bureacrats, government contractors and entitlement recipients creates an inbalance between money vs. goods/services; the goods/services vacuum sucks in goods/services. The driving force on the US side is not a geographical entity thinking for itself, but a bunch of politicians playing Santa Clause catering to narcicistic interest groups voting for their own wallets.

On the Chinese side, the trade surplus is the result of capital flight by those in power and/or have success in the market place. They know their place in the Chinese society is insecure (liable to whimsical revolutionary outbursts) . . . therefore while they still have power to make the peons work according to their command, they need to earn dollar to send overseas. Domestic currency earned would be quite worthless. If and when they are overthrown or caught for corruption, they will have to emigrate.

It is the insecurity of Chinese capital structure that causes individual Chinese to undertake all sorts of seemingly uneconomic endeavors, such as financing the enormous US budget/trade deficit. They are not stupid. They just do not trust their own countrymen. If and when the US government becomes as all-encompassing and as predatory, Americans too will engage in capital flight.

[protagonist]

You are correct, I have made a mistake in believing that decisions are made in the interests of communities rather than individuals.

I believe, however, that the trend is towards democracy and not the other way round. China will become democratic and the USA even more so.

[John]

When you're analyzing China (or any other country), then you have to
take into account generational changes. You can't simply assume that
what happened in the past will continue into the future.

The following article compares China's melamine food disaster to
America's financial crisis:

** A generational view of China's growing melamine food disaster
** http://www.generationaldynamics.com/cgi ... 17#e081117

Here are two more recent articles on China that discuss generational
changes:

** New book, 'Unhappy China,' stokes Chinese nationalism and anti-Americanism.
** http://www.generationaldynamics.com/cgi ... 12#e090412

** New Pentagon report shows China continues to prepare for war with US
** http://www.generationaldynamics.com/cgi ... 29#e090329

Sincerely,

John

[StilesBC]

140+ Killed in Xinjiang riots. Uighur muslims clashing with Han Chinese police. Sound familiar?

Ethnic clashes kill 140, hurt 828 in China's west

[shoshin]

Taiwan invites the Dalai Lama to visit. This HAS to be a provocation. Any ideas of the consequences?

[John]

> Taiwan invites the Dalai Lama to visit. This HAS to be a
> provocation. Any ideas of the consequences?

The coming Dalai Lama visit to Taiwan is a very interesting
development, with many political implications.

The visit was triggered by the unbelievably slow response of
Taiwan's current government to the devastating Morakot typhoon
(hurricane) that struck Taiwan a couple of weeks ago.

Take a look at the following extremely dramatic video:


http://www.youtube.com/watch?v=V5HSjObr-CM

You won't see anything like that too often.

But the KMT government of president Ma Ying-jeou responded very
slowly and insensitively to the disaster.
http://temasekreview.com/?p=12461

If you were unhappy with President Bush's response to hurricane
Katrina, then multiply that by a thousand.

It's helpful to understand who the players are:

• Ma Ying-jeou is president of the KMT (Kuomintang) party. This
  party was formed by Mao Zedong's mortal enemy, Chiang Kai-shek in the
  1920s. After China's bloody civil war (1934-49), Chiang's troops
  fled to Formosa (Taiwan). The KMT party governed into the 1990s. It
  was always the policy of the CCP (Chinese Communist Party in Beijing)
  and the KMT that Taiwan was part of China, and that they would be
  reunited.
• After the 1989 Tiananmen Square massacre, the Wild Lily rebellion
  began in Taiwan. This was a separatist movement whose objective was
  that Taiwan would be a separate country, and would not reunite with
  China. The rebellion grew and took the form of a new political
  party, the Democratic Progressive Party (DPP), that won elections in
  2000 and 2004.
• The Chinese HATE the DPP, even more than Nancy Pelosi hates Sarah
  Palin. The CCP has frequently spewed bitter invectives at DPP
  members.
• Thus, the Chinese were relieved when the KMT came back into power
  a couple of years ago (I have to check the date). However, Ma's
  approval ratings have been falling, and typhoon Morakot has been a
  political disaster.
• When members of the DPP invited the Dalai Lama to visit Taiwan to
  give comfort to the typhoon victims, the Ma was forced to allow the
  visit, or risk even further loss of his approval ratins.
  http://www.bloomberg.com/apps/news?pid= ... P_lByNRCFU
• Thus, some of the current CCP invectives are posturing. They
  know that Ma had no choice, but they're making their displeasure
  known anyway.
  http://news.xinhuanet.com/english/2009- ... 954815.htm

The Dalai Lama will be in Taiwan for a few days, giving comfort to
the afflicted, and also giving speeches and news conferences. This
could flare up into a major row, or it may fizzle.

John

[Jack Edwards]

Here's a link to an article on the Dalai Lama NOT getting an invite to meet with the President this year when he comes to visit the US and Canada - though they are expected to meet AFTER President Obama visits China in November.

Two Octobers ago, the Dalai Lama received the Congressional Gold Medal, one of America's highest civilian honors, in the rotunda of the U.S. Capitol. Speaker Nancy Pelosi talked of a "special relationship between His Holiness the Dalai Lama and the United States." Said Sen. Mitch McConnell: "We have reached out in solidarity to the Dalai Lama and the Tibetan people, and the Chinese government needs to know that we will continue to do so." President George W. Bush urged Chinese leaders "to welcome the Dalai Lama to China. They will find this good man to be a man of peace and reconciliation."

This October, on a scheduled visit to the United States, the Dalai Lama will not be welcomed at the White House. Obama adviser Valerie Jarrett was recently dispatched to Dharamsala -- the Dalai Lama's place of exile in northern India -- to gently deliver the message. The Tibetans took the news, as usual, nonviolently. "A lot of nations are adopting a policy of appeasement (toward China)," observed Samdhong Rinpoche, prime minister of Tibet's government-in-exile. "I understand why Obama is not meeting with the Dalai Lama before his Chinese trip. It is common sense. Obama should not irritate the Chinese leadership."

Interesting political dynamic.
http://www.washingtonpost.com/wp-dyn/co ... 03006.html
http://www.hindustantimes.com/Dalai-Lam ... 56293.aspx
http://www.bloomberg.com/apps/news?pid= ... H7lg_YRs30

Regards,

Jack

[humphreyhawksley]

I am reading American Notes by Charles Dickens on his journey there in 1842. At the time, there was general critiscism in Europe of the way America conducted itself -- the rebellious offspring from the colonial mother country -- with slavery being an obvious target. The 'New World' carried much ideological baggage and writers such as Trollope described America as 'that great experiment with democracy' -- democracy then being a concept more perjorative than advocated. I sense a similar, yet reverse, sentiment now with China. It has embarked upon a massive social experiment, the mechanisms of which are friwned upon by most in our own societies. But in the past year or so with issues such as the economic crisis, climate change and the development of Africa, we are beginning to become fascinated in the way China does things.