China and India after real domination - using Africa considered

[The One]

India and China 'to boost Africa'

http://newsimg.bbc.co.uk/media/images/41673000/jpg/_41673606_indiashare_afp203.jpg Africa can use Indian know-how to access world markets

The Organisation for Economic Cooperation and Development (OECD) says a booming India and China can be of benefit to economies in Africa.
In a policy insight document, the Paris-based think-tank said there are a number of ways the continent can gain.
The OECD says Indian and Chinese growth has dampened world inflation pressures, lowered global interest rates, and raised raw material prices.
This in turn, it says, has helped to improve Africa's terms of trade.
'Skill formation'
It also says China and India are markets for African goods as well as competitors, especially in the export-oriented clothing and textile markets in which quotas to protect African exporters were removed in January 2005.
"On the other hand, African consumers gain from cheap consumer goods sourced from the Asian drivers [India and China] and African investors from cheap and appropriate capital goods" the report says.
The research paper also points out that China and Indian firms are increasingly outward-oriented and resource-hungry. It says this opens up many opportunities to African governments as Asian corporate presence in India increases. This can in turn be used by African nations as "a source of technology, skill formation and world market access, apart from foreign finance that come with the investment".



India and China will take over the world economy in less than 10 years.
Enough with donations to Mater Theresa because it is the same Indians that will suffocate our economies and steal our labour.
Whilst China and India are thinking of usuing Africa for better macro economy we are still pouring millions in aid to Africa to feed those thiny kids with flies around their eyes.
We must start thinking for our own.
http://news.bbc.co.uk/2/hi/business/5005632.stm

[Revolutionary]

I don't see why we should not continue to donate to organisations that are trying to fight poverty in Africa.

If the economic conditions of African countries continue to improve we can only benefit from a decrease in migration towards Europe. If this does not happen, Africans will still have much less of an excuse to come to Europe and we'll have an even better reason to send them back.

Regarding China and India, if they start pumping resources into Africa I can only say "thanks for giving a hand down there!" Until now the drive to help Africa to come out of its impoverished state has only come from the west, one should welcome this initiative from Asia because it was about time that a bit of this burden was lifted from our shoulders.

The economies of China and India are expanding at a very promising rate and so they have a duty to help countries who are still underdeveloped.

One might say that China and India are going to try to tap into the resources of Africa but that is no shock. European leaders might be a bit slow to open their eyes to certain realities, but they are not stupid. European politicians are constantly striving to tap into still unused resources in China, India, and many African countries so this foreign policy is something which is found in most developed countries who are trying to expand pool of resources. For more info please refer to the documentations on the diplomatic relations of major European countries with China, India, and African countries (mainly Germany, France, and Britain). Some info can also be found on the websites of the foreign ministries of these countries.

To conclude, western countries are not only helping China and India out of charity. History proves that as capitalism and democracy starts to seep into a country, cheap labour starts to fade until the wage of workers becomes comparable to other developed nations. As I see it, this is the aim of the west, through development competition will become more fair.

Therefore, I do not agree with statements such as "enough with donations to Mater Theresa because it is the same Indians that will suffocate our economies and steal our labour", as in the last decades poverty has decreased a lot thanks to many positive initiatives conducted by western countries and the Indian government, but there is still much to do. So don't be shy, every now and then give a bit of charity for the needy, Maltese and not.

[The One]

As i see it, you have got it all wrong.

China and India are about to be the biggest economies worldwide in the next 5 years . This is because they are producing with immense proportions, with no respect towards the envirionment and stealing all the manufacturing industry. In around 10 years it is calculated that China will be producing 75 % of the world's material goods.

China is producing millions of graduates in several Areas of Science.
Europe can never compete with China this is because whilst Europe is formulating rights for women, for lesbians, and for all kinds of specific groups, China imposes upon families to work 20 hours on government projects with less than 6 $ a day. This includes old people and young boys and girls and if they do not comply, the military will lock them up .
Sometimes people die on building sites and their family members can't stop for longer than 30 min to assist the dying relative on the working place.
Not to mention the huge difference in labour cost between the Chinese and us.

It is true, the Chinese will feel a revolutionary inclination to live like the Europeans and watch American movies. But the Chinese are a homogenous society, extremely culural and patient. The 'here and now' social philosophy have not yet tainted their society. They are encouraged by the government to keep united and their work and sacrifice will be greatly payed back in the future. Their work ethic preceeds them and their discipline is still existant. We Europeans have reached a state of decadence. Whilst Chinese students study and spend hours practising traditional Caliagraphy our pupils spend hours playing playstation and listening to rap lyrics.

Regarding Africa, We poured billions in Aid, the result,,,,,,
An even poorer Africa and more wars.
Talk to people who have lived and been in Africa and they will tell you that aid and money do not have any effect and if they do it will only serve worse.
Help and aid in form of education is purely an Imposition of Western , ideas, philosophies and technology which is like trying to teach a lion to swim. It is racist , just like the the religious imperialism priests are known for. I am reffering to it missionary work.

As for China and Africa , the Chinese are not helping Africa , they are buying Africa. I was watching a documentary yesterday on CNN. China is buying every small manufacuring factory possible. It is also buying land in an impressive way. This is the begining of a new era in African History. This is the new Chinese imperialism. It is a silent form of imperialism, intelligently rooted in economic dependency. Like every great civilisation the Chinese would need to rely on an even cheaper labour , in the future Africa will be the working whore for Africa.

Thus stop giving donations to what will be our direct competitors and possibly our future dominators. We must start thinking of our own. Design systems of joining intelligencia within the baltik states . Thousands of engineers working in the sex industry round mainland Europe.What a braindrain ! Lets unite and have specific research and development areas. Lets outdo our competitors and emphesise on what the Europeans do best. Lets invent, innovate and boost technology to the world as we deem fit. The only objective should be our own development and our people. We must stop this politically correct self hating philosophy of state altruism . When others don't do it Why should we.
The way forward for the white man is to stop looking around how to feed that growing monster and start feeding our own people.



You note my words and watch the upcoming news.

[Revolutionary]

I don't know why people keep believing in these doom scenarios.

So we stop giving donations, and what then? What use would it have? The West must accept the fact that China and India are rising powers that will have to be respected in the future. This is not just a question of economics but one of global stability. If we keep spreading this paranoia about the rising Asian 'beast' we will end up creating two blocs again with both sides scavenging on Africa.

Since the end of the Cold War, the world still hasn't settled down to these new realities. This search for a so-called New World Order has not produced any long-lasting results, therefore we find ourselves in uneasy times. If we are to move forward we must cooperate with the most powerful nations and not only with the weaker countries that we can manipulate.

I never said that China and India will be integrated within the West, that would be a very far-fetched idea. What I said was that Europe is doing what it can to make the competition between the two sides more fair. Europe cannot do much more than that. The West is reaping the fruits of the foul seeds it planted during the 20th century. At least Europe has managed to recover some status in the world thanks to initiatives such as the ECSC (European Coal and Steel Community), the EEC (European Economic Community), and the EU that were far from perfect but at least these efforts proved that Europe wanted to gain a good footing in global politics.

Regarding CNN, bear with me but I don't trust any American news agency on these issues, especially CNN. America is more confrontational than Europe when faced with the risk of losing influence in international affairs, firstly because it is like them to be so aggressive and secondly because they have more to lose. The American government and media are doing their best to spread fear in relation to China, but the simple fact is that no-one likes to lose a dominant position. I don't think that such an attitude is productive, Europe will surely be more wise.

We can't blame China for defeating us on the market. They are using our own system against us, a bit of capitalism here, a pinch of Communism there and they will be on top soon. Two economic systems created by the West, perfected and harmonised by the East. So should we copy them to be able to compete? Hell no! Many of us have reached such a level of intellectual progress that make us look with horror upon many practices conducted by the East. A solution will not be easy to find, I won't be the one to try to propose one as such things are above most of us.

To conclude, I still urge everyone to give a bit of charity now and then though of course, charity begins at home.

[Neverwinter]

Source (http://news.bbc.co.uk/2/hi/africa/6323017.stm)
2 February 2007
Chinese leader boosts Sudan ties

Chinese President Hu Jintao has agreed on a series of economic deals in Sudan, which China has protected from UN sanctions over the Darfur conflict.

China announced an interest-free loan to build a new presidential palace, and said it would build two schools. China already buys most of Sudan's oil.

Mr Hu called for "dialogue" to find a peaceful solution in Darfur.

Western countries have urged him to put pressure on Sudan over the conflict, in which 200,000 people have died.

Mr Hu did mention Darfur in his discussion with Sudan's President Omar al-Bashir.

Only Sudanese and Chinese journalists were allowed to see the discussion.

Xinhua, China's state-owned news agency, quoted Mr Hu as saying: "Any solution [in Darfur] needs to respect the sovereignty of Sudan and be based on dialogue."

He reportedly said that the United Nations and the African Union both had constructive roles to play and that wisdom and creativity were needed to achieve peace.

The rest of the day was devoted to cementing the strong economic ties between the two countries.

China has used its veto at the UN Security Council to block moves to impose sanctions on Sudan unless it stops the fighting in Darfur.

The BBC's Jonah Fisher in the capital, Khartoum, says the Sudanese government meanwhile has violated numerous ceasefire agreements, bombing civilians and launching ground assaults - often with weapons bought directly from China.

As the main investor in Sudan and a key trading partner, China could have played a key role in trying to resolve the war in Darfur, he says.

The UN wants to take control of the beleaguered African Union peacekeeping force in Darfur but Mr Bashir opposes this, saying the UN should only provide logistical support.

They came to our help, they did not impose any conditions on us and so we had to take them
Ali Abdulla Ali
Sudanese economist

Hundreds of people, Sudanese and Chinese, lined the streets of Khartoum to welcome Mr Hu at the start of his two-day visit - the first to Sudan by a Chinese leader.

Sudan's economy is growing at close to 10% a year and much of that is down to its relationship with China.

In the 1980s and 1990s, when human rights abuses and civil war forced Western companies to pull out, China stepped in.

Beijing financed a 1,600km (1,000 miles) pipeline, taking oil from the south to Port Sudan on the Red Sea.

Exports are now close to 500,000 barrels per day, with about 80% of that going directly to China.

'No conditions'

Sudanese economist Ali Abdulla Ali said working with China made sense.

"When they came in, they wanted to help us to produce the oil because they needed it. So you really can't say much about that," he told the BBC.

"They came to our help, they did not impose any conditions on us and so we had to take them."

Our reporter says it is the lack of conditions which Beijing attaches to its business relationships which so infuriates Western governments.

Mr Hu is visiting Sudan on the latest leg of his eight-country African tour.

He arrived from Liberia, where he signed a number of aid and investment deals.

China is becoming a major trading partner for countries across Africa, not just Sudan.

CHINA, SUDAN TIES
China buys some 400,000 barrels of oil a day from Sudan
China financed Sudan's oil pipeline
China sells weapons to Sudan
China to build new presidential palace for Sudan
China uses UN Security Council veto to help Sudan

[Marco Polo]

you opened me a zionist thread that i needed last night and couldnt find and now this which i needed too.

http://today.reuters.com/news/articlenews.aspx?type=politicsNews&storyID=2007-02-06T235111Z_01_WBT006532_RTRUKOC_0_US-USA-PENTAGON-AFRICA.xml&WTmodLoc=PolNewsHome_C2_politicsNews-1

Bush approves new military command for Africa
Tue Feb 6, 2007 6:51 PM ET

By Andrew Gray and Kristin Roberts
WASHINGTON (Reuters) - President George W. Bush said on Tuesday he had approved plans to create a U.S. military command for Africa, a move that reflects increased U.S. strategic interest in the continent.
Bush's decision was the culmination of a long debate that gained momentum as Washington grew more concerned about Islamist militancy in parts of Africa and more attracted by the potential of the continent's natural resources.
"This new command will strengthen our security cooperation with Africa and create new opportunities to bolster the capabilities of our partners in Africa," Bush said.
"Africa Command will enhance our efforts to bring peace and security to the people of Africa and promote our common goals of development, health, education, democracy and economic growth in Africa," he said in a statement.
In Germany, a spokeswoman for the U.S. military, Holly Silkman, told the Stuttgarter Zeitung newspaper the unit dubbed "Africom" would be based initially in the Kelly Barracks in the Moehringen district of Stuttgart.
"We've started moving already this week," Silkman told the newspaper's Wednesday edition. She said the unit would later be transferred to a base in Africa.
"But that is the long term plan," she said.
Bush said he had asked Defense Secretary Robert Gates to get the new Africom unit up and running by the end of September 2008. The United States would work closely with African allies to choose a location for the new command in Africa, he said.
The U.S. military assigns responsibility for parts of the world to regional commands, such as Central Command, which handles the Middle East and Horn of Africa. The commands are unified, meaning they control assets from different armed services.
"This command will enable us to have a more effective and integrated approach than the current arrangement of dividing Africa between Central Command and European Command -- an outdated arrangement left over from the Cold War," Gates told the U.S. Senate's armed services committee.
"IMPORTANT CONTINENT"
The United States has paid increasing attention to Africa in recent years, partly out of anxiety that African states with weak governments can be a haven for Islamist militants.
Al Qaeda carried out near simultaneous car bombings at the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, in 1998, killing more than 250 people. U.S. forces carried out at least two air strikes in Somalia last month, targeting al Qaeda militants.
The United States began counterterrorism training in West and Central Africa in 2002, teaching local armies basic techniques to help them locate and take out militant cells.
But Washington is also interested in the potential offered by natural resources, particularly as it aims to reduce dependence on oil from the volatile Middle East.
The world's biggest energy consumer hopes the Gulf of Guinea region in West Africa will provide up to a quarter of its oil imports within a decade and is working to guarantee stability in one of the most volatile parts of the planet.
"It's an important continent," Pentagon spokesman Bryan Whitman said.
He said Pentagon officials would flesh out plans for the new command at a briefing on Wednesday. No commander had yet been nominated to run it, he said.
"Standing a combatant command, a unified command, is obviously a large endeavor and it will take some time to do but we're going to move out expeditiously," Whitman said.
While Africa now mainly falls under the remit of European Command and Central Command, Pacific Command has responsibility for Madagascar and some other smaller islands.
U.S. officials declined to say what the exact geographical boundaries of the new command would be.
(Additional reporting by Tabassum Zakaria in Washington and Nick Tattersall in Dakar)

[Marco Polo]

hmmm, no comments on something as important as africa and its resources. lets continue to bitch about the evil THEM or the camel jockeys and their bombs. We could try talking about something that happened 60 years ago.

control of the most resource rich continent on earth? thats not important enough for gahan from whichever country he comes from.

[Marco Polo]

I listen every morning to the BBC world service as regards to the current tour of Africa by the Chinese.Last week,the chinese were tying up deals with Namibia and Mozambique.
AmeriKa's reaction is to be expected.Does one really think that Colin Powell and the AmeriKans were really that interested in the plight of the Sudanese in Darfur?

Wheras amerika likes to start a conflict to obtain their required recources and then offer loans via the IMF or 'world bank' for reconstruction of devastated countries, the chinese come along and say 'we would like some of your oil'.What would you like in return.What a refreshing change from amerikas bomb and grab way of doing business.

Once amerika loses the dictators that they have installed in Africa then I reckon they are doomed.It is just a matter of time.The amerikan propaganda machine is failing in it's mission to demonise Hugo Chavez.It has failed in Iraq,Afghanistan.It is failing in Africa.Even today on BBC news ,Mr.Putin openly criticised AmeriKa for it's aggresive methods of invasion for oil.Where else can they go?The world isn't big enough for AmeriKa.They want it all and to hell with the consequences.

china cannot give africa fair trade. when america is out of the way they will do just what the west has done. why be fair with africa if there is no reason to be?

[Neverwinter]

china cannot give africa fair trade. when america is out of the way they will do just what the west has done. why be fair with africa if there is no reason to be?Indeed. Our ancestors are demonized for European colonization of Africa but time will prove that the Chinese will be much harder on the black man than our ancestors were. If Europe does not find Herself again and She succumbs to a multi-culti death, China will become master of that continent.

[Marco Polo]

chinese hate blacks. they have some respect for whites but the black man they know as inferior. ask anyone who has seen them interact. All conquering peoples will opress africans, they are the worlds slave caste of people and everyone knows it in their hearts.

Arabs have done it, Indians have done it, Superior africans have done it, whites have done it. Why should china do any different? what does it have to gain from strong african nations when it too desires cheap resources?

[Marco Polo]

http://www.wsws.org/articles/2006/apr2006/afri-a10.shtml
Western concern at China’s growing involvement in Africa

By Brian Smith
10 April 2006

Use this version to print (http://www.wsws.org/articles/2006/apr2006/afri-a10_prn.shtml) | Send this link by email (http://www.wsws.org/cgi-bin/birdcast.cgi) | Email the author (https://secure.wsws.org/phpform/use/comments/form1.html)
New evidence is emerging about the extent and nature of China’s involvement in Africa. A series of articles in the Financial Times claims that China “has in the span of a few years changed the pattern of Africa’s investment and trade.” The paper admits to “only just beginning to grapple with the implications.”

Trade between China and Africa has quadrupled since the beginning of this decade. China is now Africa’s third largest commercial partner after the US and France, and second largest exporter to Africa after France. It is notably ahead of ex-colonial power Britain in both categories. As one US official put it, “China has simply exploded into Africa.”

Although China’s primary interest in Africa is energy, it has major interests in other natural resources, particularly metals, food and timber. It exports textiles and low-cost consumer goods, primarily electronic and high-technology products, and invests in infrastructure.
Like the former colonial countries China backs its trading relations with aid, debt relief, scholarships, training and the provision of specialists. It is also a major supplier of military hardware, like the West, and has supplied peacekeepers—to the Democratic Republic of Congo and Liberia—and election observers to Ethiopia.

As a latecomer to Africa, China has been prepared to enter regions and take risks that others would not. “Like the west during the cold war,” observes the Financial Times, “China is not sniffy about dealing with despots.”
China’s methods are cutting across the interests of the International Monetary Fund (IMF). It has extended a $2 billion soft loan to Angola, for example, which Africa Confidential believes may increase to $6 billion, in exchange for favourable oil contracts. “The Chinese are offering the loan as an alternative to working with the IMF,” points out Princeton Lyman from the Council of Foreign Relations think-tank in Washington. The loan has given Angola the ability to ignore the IMF’s demand for an agreement on accountability and to delay indefinitely an international donors’ conference.

About half of Angola’s $9.7 billion foreign debt is owed to the Paris Club of nations, which according to Africa Confidential is divided over their negotiating strategy, largely because of China’s incursions. Paris Club rules dictate that creditor countries cannot reschedule debts without an IMF imprimatur, but Spain, Germany, Italy and Japan want negotiations to speed up so that they can expand their operations in Angola.

In Ethiopia, China has offered to make good any shortfall in assistance following the suspension of European Union aid due to human rights abuses. In Equatorial Guinea, China is trying to gain influence in the US-dominated oil sector by providing military training and specialists to the country—the president now describes China as its main development partner. Equatorial Guinea has approximately 1.28 billion barrels of proven oil reserves.

In the case of Zimbabwe, China is now its second largest trade partner after South Africa, up from eleventh in just three years. It has supplied military hardware, including fighter aircraft and intelligence listening devices, and is interested in Zimbabwe’s tobacco as well as platinum and other mineral reserves which are currently dominated by South African and British companies. It also has stakes in electricity production and supply, mobile phones and transport. Its reported plans include a joint coal venture, a glass factory, telephone assembly, and beef production on vast tracts of acquired land following President Mugabe’s disastrous land redistribution policy. There are now also direct flights from Harare to Beijing, and China has donated three commercial aircraft to Air Zimbabwe.

China’s links with Zimbabwe go back to when it supported the ZANU liberation movement of Robert Mugabe, whilst the Soviet Union backed his rival Joshua Nkomo’s ZAPU. Mugabe, who has been isolated by the West, stated recently that Zimbabwe is “returning to the days when our greatest friends were the Chinese.” He also told supporters somewhat cryptically: “We look again to the East, where the sun rises, and no longer to the West, where it sets.”
The US Department of Energy has registered concern over China’s willingness to deal with regimes to which it has given pariah status. This particularly refers to Sudan, where China has used its United Nations Security Council veto to block sanctions over the question of Darfur.
China has stepped up its arms sales to Sudan in line with its increased involvement in the country’s oil sector, and the Financial Times believes that the “manufacture in Sudan of Chinese weapons and ammunition complicates the enforcement of a UN embargo on supplies to militias in Darfur.” A Sudanese government official is quoted saying that China’s presence is important “not only on an economic level but also on a political level.”

In January, a Chinese government white paper on Sino-African trade called for greater military cooperation with the continent, and trade agreements “when conditions are ripe.” China is now making strategic trade deals throughout Africa. It gets copper from Zambia, cobalt and copper from the Democratic Republic of Congo, timber and oil from Congo-Brazzaville, iron-ore from South Africa, and food from Tanzania, to name but a few. It is now the world’s largest consumer of copper, ahead of the US, and the worldwide rise in many commodity prices is largely driven by Chinese demand.

China is also stepping up exports to Africa, especially in textiles. Garment factories across Africa have been shutting down since the ending of the Multi-Fibre Agreement (MFA), which allowed Western countries to place quotas on clothing and textile imports from certain countries, such as China. When the MFA ended in January 2005, Chinese exports to the US soared and African exports could not compete. Over 10 textile factories in Lesotho alone closed in 2005 with the loss of 10,000 jobs. Even larger economies like Nigeria and South Africa have seen their textile sectors largely devastated. Clothing exports from China to South Africa rose by 40 percent in the last nine months of 2005 and after protests from the South African government China has now claimed it will limit the amount to prevent further job losses.

Chinese investments have an advantage over the West in that most are through state-owned companies whose individual investments do not have to make a profit so long as they serve overall Chinese objectives. In Nigeria, China is in talks about running the privatised Kaduna oil refinery—a money-losing proposition that no Western country would touch. However, the deal should give the Chinese preferential treatment in future oil-block allocations. In Ethiopia, China’s state-owned construction company was instructed by Beijing to bid low on various tenders, since its objective is to gain favour with the regime.
Like the US, China is looking to diversify its oil supplies away from the Middle East and now gets between 25 percent and 30 percent of its oil from Africa, mainly from Sudan, Angola and Congo-Brazzaville.

Between 1995 and 2005, the number of licences held by national oil companies in Africa more than doubled, from 95 to 216. Chinese state oil companies’ exploration include deals with Angola, Nigeria, Sudan, Algeria, Gabon, Niger and Chad.
The key demand which China impresses upon its African trading partners is its “one-China” policy, which insists on non-recognition of Taiwan. Today, all but six of Africa’s 53 nations maintain relations with Beijing. Senegal was the last to transfer allegiance from Taipei last year, leading to Senegal being included on Chinese Foreign Minister Li Zhaoxing’s recent six-nation diplomatic visit, and the offer of debt elimination and infrastructure funding. The visit also sent a message to smaller nations about the help they might receive for cooperation with China.
Resource rich Libya and Nigeria were also on the minister’s agenda. China signed an $800 million oil deal with Nigeria last year to purchase 30,000 bpd for five years, and the China National Petroleum Corporation recently bid $2.3 billion for a 45 percent share in Nigeria’s off-shore Akpo field. In total, China is considering some $7 billion of investment in Nigeria across a wide range of sectors.

“The perception is that China is catching up with the level of engagement that Western governments have,” a senior Nigerian foreign affairs official explained. “They are also prepared to put more on the table. For instance, the Western world is never prepared to transfer technology—but the Chinese do.”
Nigeria has approached a Chinese company, Great Wall Industry Corporation, to launch a satellite for it next year. This is despite the fact that the US has applied sanctions against this company for allegedly supplying Iran with technology that could be used for a nuclear weapons programme.

Nigeria has recently criticised the US for failing to help it protect the country’s oil assets and forcing it to turn to China for military support. When talks with the US were not progressing fast enough to stop the insurgency in the south of the country, Nigeria sourced dozens of patrol boats from China to secure the swamps and creeks that are at the centre of insurgent attacks on oil facilities.
The US has been reluctant to increase its supply of military equipment to Nigeria, citing official corruption as the reason. Stephen Morrison of the Centre for Strategic and International Studies has warned the Pentagon to get more serious about dealing with the Nigerian military and to show more concern about Chinese involvement in the country. “The Chinese are very competitive players and we have to come to terms with that,” he complained. “They are going to places that really do matter.”

More generally the US Council on Foreign Relations (CFR) think-tank has recently proposed that sub-Saharan Africa must be a primary component of US foreign policy over the coming decade due to growing US economic and strategic interests in the continent. It also applauded Secretary of State Condoleezza Rice’s “transformational diplomacy”, i.e., the shifting of diplomats away from Europe to Africa and other areas of more immediate strategic concern.
We need “greater flexibility,” explains Lyman of the CFR, and “the kind of geopolitical shift that puts a much higher priority on this region within the White House and ... State Department.” He also called for US involvement in conflict resolution in Africa to be more flexible so that “we can deal with more than one crisis at a time.”
See Also:
China’s growing trade with Africa indicative of Sino-Western energy conflicts (http://www.wsws.org/articles/2006/jan2006/chin-j24.shtml)
[24 January 2006]

[etoile noir]

Stocks' Great Wall of Worry

China's 9% market plunge and U.S. economic concerns led to Dow and S&P free falls. Analysts say it's about time

by Marc Hogan (http://www.businessweek.com/bios/Marc_Hogan.htm)
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If Wall Street was overdue for a pullback, it might not be anymore. On Feb. 27, the Dow Jones industrial average and the broader Standard & Poor's 500 index suffered their worst day since Mar. 24, 2003. How much further the market has to fall could depend on the strength of upcoming economic reports.




Tuesday's decline marked an end to a remarkably tranquil eight-month run for stocks. The Dow had gone without a drop of 2% or more since July 17, 2006, only to tumble 3.29% in the latest session. The market's slide puts the Dow on pace for its first monthly loss since June, 2006, and the S&P 500 for its first since last May.

The slide may have awakened investors to the market's inherent risks, after weeks of growing complacency. The Chicago Board Options Exchange Volatility Index (VIX (http://stockmarket.businessweek.com/www/search.html?q=VIX)), a measure of investors' risk tolerance often classified as a "fear gauge," surged more than 60% Feb. 27, its biggest-ever increase. The VIX had fallen as low as 8.6 as recently as Dec. 18, 2006, down from a 52-week high of 23.81 set last June.
A sharp overnight drop in China's stock market helped jump-start Tuesday's sell-off. Still, analysts say a weak manufacturing report and broader economic worries were probably more to blame for U.S. losses. Now might be an opportune moment for investors to make sure their portfolios reflect their risk-tolerance levels, though market pros say it's no time to panic just yet.

"It's more opportunity selling right now than anything," says Chris Johnson, CEO and chief investment strategist at Johnson Research Group. "I don't think you can call it a perfect storm that's going to cause us to go down 10%, but certainly the market was in need of a break."
A Sudden Correction

China's stocks posted their biggest one-day drop in a decade (see BusinessWeek.com, 1/27/07, "A Rough Day for China Stocks" (http://www.businessweek.com/globalbiz/content/feb2007/gb20070227_996709.htm)). The Shanghai composite index tumbled 8.8% on Feb. 27, its steepest decline since Feb. 18, 1997. Moves by the People's Bank of China to reduce liquidity contributed to the blowout for the market, which reached a record high a day earlier.

Last spring, a drawdown in liquidity precipitated a two-month correction (see BusinessWeek.com, 6/9/06, "A Global Assault on Inflation" (http://www.businessweek.com/investor/content/jun2006/pi20060609_835871.htm)). A tightening spree from New York to Tokyo, along with surging oil prices, played a role in last year's short-lived pullback.

China's problems are likely to stay more contained, analysts say. In Hong Kong, the Hang Seng index slid 1.76% on Feb. 27, a much less dramatic drop than in the other Chinese bourses, which have more restrictions on international investment. For U.S. investors, the pullback may have merely provided "an excuse to take some profits" after so many months without a correction, says Jeffrey N. Kleintop, chief investment strategist at PNC Wealth Management (PNC (http://stockmarket.businessweek.com/www/search.html?q=PNC)). "I wouldn't chalk it up to more than that."
Meanwhile, economic worries were also weighing on U.S. investor sentiment. On Feb. 26, former Federal Reserve Chairman Alan Greenspan warned a recession is "possible" later this year. A day later, a report showed durable good orders plunged much more than expected in January. At the same time, concerns mounted surrounding the troubled subprime loan market, with mortgage lender Freddie Mac (FRE (http://stockmarket.businessweek.com/www/search.html?q=FRE)) announcing tougher lending standards.
more here (http://www.businessweek.com/investor/content/feb2007/pi20070228_649726.htm?chan=rss_topStories_ssi_5)

[Neverwinter]

Source (http://www.signonsandiego.com/uniontrib/20070310/news_1b10china.html)
More than $1 trillion in foreign currency held
By Jim Yardley
and David Barboza
NEW YORK TIMES NEWS SERVICE

March 10, 2007

BEIJING – China will create a new agency to invest the country's immense reserves of foreign currency, now totaling more than $1 trillion, the country's finance minister announced yesterday.

The minister, Jin Renqing, offered no specifics about how much of China's currency reserves would be under the new agency's control. But whatever the precise figure, analysts say the agency is certain to begin life as one of the world's biggest investment funds.

China's currency holdings are already the world's largest, and they are growing rapidly because of China's huge trade surpluses. Most of the reserves are invested very conservatively, in U.S. Treasury bonds and other government securities, a strategy that helps to keep interest rates low in the United States and other developed countries but earns little profit for China.

The new agency will be able to invest some of the money more diversely and aggressively, analysts said, with the possibility of hundreds of billions of dollars beingput into acquiring “strategic assets” – mines, oil fields, whole companies – around world, especially in developing countries in Africa and Latin America.

“They're not going to be looking for financial assets, but energy assets and natural resources, minerals, things China desperately needs,” said Jing Ulrich, an analyst at J.P. Morgan.

The government said the new agency would be modeled in part on Temasek Holdings, the Singapore government's hugely successful investment agency, which manages an $84 billion global portfolio of investments.

Like most countries, China's huge foreign exchange reserves are largely kept as insurance, in case of a financial panic or swift reversal of fortune for the economy.

The reserves are held by the Chinese central bank, and most of the reserves are expected to remain there, in safe, conservative investments in government securities. But the new agency is expected to get a substantial portion to work with.

Some financial experts are already talking about the huge impact China could have as a major global investor, and the possibility that its purchases could push asset prices higher and create even more competition for scarce commodities and resources.

But Jin, the finance minister, said that the new investment agency would not be allowed to simply speculate.

“The biggest priority is safety, and under the principle of security, we will try to increase the efficiency of management and the investments' returns,” Jin said at a news conference yesterday, held as part of a two-week meeting of the National People's Congress, China's largely ceremonial national legislature.

The decision to form the new agency has been rumored for months, and Prime Minister Wen Jiabao said in January that the government was exploring new ideas about investing the currency reserves.

Andy Rothman, a strategist at CLSA Asia-Pacific Markets, said the government was likely to proceed cautiously and give the agency only a relatively small part of the reserves to work with at first, perhaps $20 billion.

“It's not going all of a sudden going to change the world,” Rothman said. “I think they are going to move very, very slowly in diversifying what they are doing. Nobody should expect that suddenly they are going to invest $1 trillion.”

Some analysts say the formation of the new agency means China is moving away from heavy reliance on investing in U.S. dollars through Treasury securities, and that could affect American interest rates, which remain low in part because of China's huge bond purchases.

But the country's foreign exchange reserves are accumulating so quickly – by more than $20 billion a month, analysts say – that China is likely to continue buying huge numbers of Treasury bonds for a long time to come.

The immense foreign exchange holdings are just one of many signs of China's spectacular rise, and its growing influence in the global economy and financial markets.

And with that growth have come rising costs at home for education, health care and pensions. Earning more on government holdings, analysts say, will allow the government to better cope with some of these problems.

Rothman said the decision to set up the new investment agency should be seen in the context of other new government measures, like the recent efforts to enact a private property law and another new law to equalize corporate taxes. He said China is trying to create the legal and regulatory structure to underpin its still-evolving market economy.

Jin, the finance minister, said the new agency would answer directly to the State Council, the equivalent of China's cabinet.

[etoile noir]

China to overtake Germany as third largest economy - source (http://www.gulf-daily-news.com/Story.asp?Article=187932&Sn=BUSI&IssueID=30118)

SHANGHAI: China's economy grew so rapidly in the first half of 2007 that it is likely to overtake Germany as the world's third-largest by the end of this year, analysts say.

The release of January to June figures for Asia's second biggest economy will provide fresh evidence that Beijing's economic braking measures have had little effect.

China's sizzling economy expanded even faster than originally thought last year, with the government revising 2006 growth domestic product (GDP) to 11.1 per cent from 10.7pc.

Data released by China's statistics bureau last week showed the economy was worth 21.09 trillion yuan in 2006, about $2.65 trillion based on last year's average exchange rate of 7.97 yuan to the dollar.

The revision puts China in striking distance of Europe's largest economy within months.

"With this upward revision, it is highly likely that China will bypass Germany to become the third-largest economy in the world in current US dollar terms by the end of this year," said Hong Liang, an economist at Goldman Sachs.

According to the World Bank, Germany's economy was worth $2.9 trillion at the end of 2006.

Economists expect GDP in the second quarter to near or equal its breathtaking January to March pace of 11.1pc growth.

JPMorgan Chase Bank economist Wang Qian put the second-quarter acceleration at 10.6pc, and said it would pick up speed in the second half of the year.

"We don't see any sector of the economy slowing down. It's firing on all cylinders," said Wang.

The torrid pace of development means that China's economic czars will once again have to devise fresh ways to prevent the export powerhouse from the kind of overheating that could trigger a slide into financial crisis.
Regulators have already taken this year introduced a slew of piecemeal administrative measures to slow the economy, including two interest rate hikes, five increases in bank reserve requirements and new export curbs.
Exports, one of Beijing's biggest headaches given the friction it causes with its two largest trade partners, the European Union and the US, have continued to flood international markets.

The widening trade gap is on route to becoming the globe's largest ever after Beijing announced last week that its surplus had jumped more than 85pc in June to $26.91 billion.

Although the June figure was partly due to factories rushing to beat new curbs on exports that took effect July 1, the huge global demand for Chinese goods means the surplus will expand through the rest of the year, analysts said.

"China has become the world's factory for manufactured consumer goods," said Qu Hongbin, a senior economist at HSBC in Hong Kong.
"If global consumer demand remains then Chinese exports will grow. There is not a lot that government policy can do about that."

[Eurodip]

Hey, good news. I've just seen this caption today:

Chinese communist soldiers stand at attention in front of Tiananmen Square with the national museum partially obscured by pollution behind them in Beijing, China Tuesday, July 17, 2007. China's smog-choked cities and contaminated waterways are leaving many people sick and unable to work, in turn fomenting unrest and threatening the country's economic growth, an international think-tank said Tuesday in a government-requested report.

[etoile noir]

Hey, good news. I've just seen this caption today:

Chinese communist soldiers stand at attention in front of Tiananmen Square with the national museum partially obscured by pollution behind them in Beijing, China Tuesday, July 17, 2007. China's smog-choked cities and contaminated waterways are leaving many people sick and unable to work, in turn fomenting unrest and threatening the country's economic growth, an international think-tank said Tuesday in a government-requested report.
i dont see it as good news at all.
what china is doing is contributing in a horrific manner to global pollution without a care in the world. it doesnt even care about its workers, let alone its polluted air and rivers.
the people .... who cares, there's plenty where they came from. expendible.
the environment .... what the heck is that :confused: :mad:

as for the unrest its fomenting, we've all seen how chinese authorities deal with "unrest" :rolleyes:

[Eurodip]

Good news. Realpolitik (and a bit of schadenfreude).

If their people start dropping like flies, then maybe they'll stop gloating about what a wonderful country they've become. And maybe, just maybe, they'll think twice about polluting the rest of us.

[Gladiator]

Good news. Realpolitik (and a bit of schadenfreude).

If their people start dropping like flies, then maybe they'll stop gloating about what a wonderful country they've become. And maybe, just maybe, they'll think twice about polluting the rest of us.

When it is too late....:confused:

[ComradeDTAII]

The first cities in sub-Sahara Africa were actually colonies founded by Chinese and Indians thousands of years ago. For 'some' reason these great civilizations left Africa on their own accord, and, the aforementioned cities decayed and were swept into the sands of time. The Africans just couldn't look after them I guess.

No matter how much the Chinese and Indian economy are 'booming', you will see their colonization efforts go to hell just like they did in the past.

With nationalist greetings,

Dan

[Eurodip]

The first cities in sub-Sahara Africa were actually colonies founded by Chinese and Indians thousands of years ago. For 'some' reason these great civilizations left Africa on their own accord, and, the aforementioned cities decayed and were swept into the sands of time. The Africans just couldn't look after them I guess.

No matter how much the Chinese and Indian economy are 'booming', you will see their colonization efforts go to hell just like they did in the past.

With nationalist greetings,

Dan

The historical bit is incorrect, but I get your point.

[ComradeDTAII]

That's because it is prehistory, the Chinese brought the Africans the basis for most of their own languages (in east Sub-Saharan Africa at least) among many other things.

With nationalist greetings,

Dan

[Neverwinter]

Source (http://au.news.yahoo.com/070704/19/13w5y.html)
Wednesday July 4, 03:57 PM
China's economy to grow 10.9 percent in 2007

Growth in China's roaring economy is expected to continue apace this year, rising 10.9 percent, a government think tank report said Wednesday, urging further economic cooling measures.

The projected annual growth is slightly higher than 10.7 percent in 2006, supported by strong consumption and high levels of fixed-asset investment, said the State Information Centre, a research arm of the National Reform and Development Commission.

"The trend is of an economy that is moving from a bias of fast growth to overheating," the report published in the China Securities Journal said, adding that the economy was still in an "ascending period" of the cycle.

The country needs to further tighten macroeconomic controls in the second half, with monetary policy generally stable but needing "appropriate tightening" to ensure economic growth remains rapid but stable.

It said that current real interest rates are comparatively low and that the central bank should raise the benchmark lending and borrowing rates and also increase the reserve requirements of banks.

The central bank hiked interest rates twice this year and five times required commercial banks to place more money in reserve in an effort to cool inflation, fixed-asset investment and stock market speculation.

In addition, the central government should consider removing the tax on interest income from bank deposits, the centre said, a move aimed at staunching the flow of savings into the stock market acccounts.

The report also forecast that growth in China's trade surplus, would slow in the second half as tax rebates and the appreciation of the currency, which makes exports from China more expensive, bite.

The trade surplus is expected to hit 275 billion dollars in 2007, up 55 percent from last year, a slower pace of growth than from January to May when the trade surplus jumped 83.2 percent from a year ago to 85.72 billion dollars.

The state statistics bureau is scheduled to announce second quarter data on July 18 at a quarterly press conference.

China's economy recorded growth of 11.1 percent in the first quarter.

[etoile noir]

Huge Dust Plumes From China Cause Changes in Climate
July 20, 2007 - source (http://online.wsj.com/public/article/SB118470650996069354-buQPf_FL_nKirvopk__GzCmNOq8_20070818.html)

One tainted export from China can't be avoided in North America -- air.
An outpouring of dust layered with man-made sulfates, smog, industrial fumes, carbon grit and nitrates is crossing the Pacific Ocean on prevailing winds from booming Asian economies in plumes so vast they alter the climate. These rivers of polluted air can be wider than the Amazon and deeper than the Grand Canyon.

"There are times when it covers the entire Pacific Ocean basin like a ribbon bent back and forth," said atmospheric physicist V. Ramanathan at the Scripps Institution of Oceanography in La Jolla, Calif.

A GLOBAL POLLUTION PROBLEM

On some days, almost a third of the air over Los Angeles and San Francisco can be traced directly to Asia. With it comes up to three-quarters of the black carbon particulate pollution that reaches the West Coast, Dr. Ramanathan and his colleagues recently reported in the Journal of Geophysical Research.

This transcontinental pollution is part of a growing global traffic in dust and aerosol particles made worse by drought and deforestation, said Steven Cliff, who studies the problem at the University of California at Davis.

Aerosols -- airborne microscopic particles -- are produced naturally every time a breeze catches sea salt from ocean spray, or a volcano erupts, or a forest burns, or a windstorm kicks up dust, for example. They also are released in exhaust fumes, factory vapors and coal-fired power plant emissions.

http://online.wsj.com/public/resources/images/OB-AN038_scienc_20070717171420.jpgCourtesy SeaWiFS Project, NASA/Goddard Space Flight Center and ORBIMAGE A satellite view from 2001 shows dust arriving in California from Asian deserts. Concentrations of dust are visible to the south, near the coastline (lower right); To the west the dust is mixed with clouds over open ocean. This dust event caused a persistent haze in places like Death Valley, California, where skies are usually crystal clear.

Over the Pacific itself, the plumes are seeding ocean clouds and spawning fiercer thunderstorms, researchers at Texas A&M University reported in the Proceedings of the National Academy of Sciences in March.
The influence of these plumes on climate is complex because they can have both a cooling and a warming effect, the scientists said. Scientists are convinced these plumes contain so many cooling sulfate particles that they may be masking half of the effect of global warming. The plumes may block more than 10% of the sunlight over the Pacific.
But while the sulfates they carry lower temperatures by reflecting sunlight, the soot they contain absorbs solar heat, thus warming the planet.
Asia is the world's largest source of aerosols, man-made and natural. Every spring and summer, storms whip up silt from the Gobi desert of Mongolia and the hardpan of the Taklamakan desert of western China, where, for centuries, dust has shaped a way of life. From the dunes of Dunhuang, where vendors hawk gauze face masks alongside braided leather camel whips, to the oasis of Kashgar at the feet of the Tian Shan Mountains 1,500 miles to the west, there is no escaping it.
http://online.wsj.com/public/resources/images/OB-AN044_scienc_20070717181744.jpgCourtesy SeaWiFS Project, NASA/Goddard Space Flight Center, and ORBIMAGE. A satellite image from 2005 shows a plume of dust flowing from China to the north of the Korean Peninsula and over the Sea of Japan. Such plumes can cross the Pacific and scatter dust across the Western U.S.The Taklamakan is a natural engine of evaporation and erosion. Rare among the world's continental basins, no river that enters the Taklamakan ever reaches the sea. Fed by melting highland glaciers and gorged with silt, these freshwater torrents all vanish in the arid desert heat, like so many Silk Road caravans.
Only the dust escapes.

In an instant, billows of grit can envelope the landscape in a mist so fine that it never completely settles. Moving east, the dust sweeps up pollutants from heavily industrialized regions that turn the yellow plumes a bruised brown. In Beijing, where authorities estimate a million tons of this dust settles every year, the level of microscopic aerosols is seven times the public-health standard set by the World Health Organization.

Once aloft, the plumes can circle the world in three weeks. "In a very real and immediate sense, you can look at a dust event you are breathing in China and look at this same dust as it tracks across the Pacific and reaches the United States," said climate analyst Jeff Stith at the National Center for Atmospheric Research in Colorado. "It is a remarkable mix of natural and man-made particles."

http://online.wsj.com/public/resources/images/OB-AN045_scienc_20070717181845.jpgCarlye Calvin, UCAR Jeff Stith of the National Center for Atmospheric Research, a principal investigator on the Pacific Dust Experiment.This spring, Dr. Ramanathan and Dr. Stith led an international research team in a $1 million National Science Foundation project to track systematically the plumes across the Pacific. NASA satellites have monitored the clouds from orbit for several years, but this was the first effort to analyze them in detail.

For six weeks, the researchers cruised the Pacific aboard a specially instrumented Gulfstream V jet to sample these exotic airstreams. Their findings, to be released this year, involved NASA, the National Oceanic and Atmospheric Administration and nine U.S. universities, as well as the National Institute for Environmental Studies in Japan, Seoul National University in Korea, and Lanzhou University and Peking University in China.

The team detected a new high-altitude plume every three or four days. Each one was up to 300 miles wide and six miles deep, a vaporous layer cake of pollutants. The higher the plumes, the longer they lasted, the faster they traveled and the more pronounced their effect, the researchers said.

Until now, the pollution choking so many communities in Asia may have tempered the pace of global warming. As China and other countries eliminate their sulfate emissions, however, world temperatures may heat up even faster than predicted.

[shadow cup]

Dust carried by the Aeolian system is just one of the ways that the situation of a non-local country may effect one's own. There are other ways, both natural and human.

This in itself presents a case for seeking to influence the status of the Sahara desert...If not for Africa then for Malta or Europe.

And this in spite of Gaddafi's treachery.

[etoile noir]

China, Filling a Void, Drills for Riches in Chad http://graphics8.nytimes.com/images/2007/08/12/world/13chinaafrica.600.jpg

Chinese and Chadian workers at an oil site in southern Chad, part of China's growing economic presence in Africa.

Published: August 13, 2007 - NY Times (http://www.nytimes.com/2007/08/13/world/africa/13chinaafrica.html?_r=1&th&emc=th&oref=slogin)

KOUDJIWAI, Chad (http://topics.nytimes.com/top/news/international/countriesandterritories/chad/index.html?inline=nyt-geo) — The small plane flew in low over a scorched, peppercorn scrubland, following a broad, muddy river that was all elbows on its run to the southeast.

Drilling for Oil, No Strings Attached

http://graphics8.nytimes.com/images/2007/08/12/world/13chinaafrica.map.190.jpg The New York Times
Koudjiwai, a small village in Chad, is surrounded by a Chinese oil exploration zone.

The first hint of humanity came with the appearance of an immense grid for seismic testing, laboriously traced through the brush. Finally, a lonely, hulking steel drilling platform popped into view.

Chad is as geographically isolated as places come in Africa. It is also among the continent’s poorest and least stable countries, the scene of recurrent civil wars and foreign invasions since it gained independence from France in 1960.

None of that has put off the Chinese, though. In January, they bought the rights to a vast exploration zone that surrounds this rural village, making the baked wilderness here, without roads, electricity or telephones, the latest frontier for their thirsty oil industry and increasingly global ambitions.

The same is happening in one African country after another. In large oil-exporting countries like Angola and Nigeria, China is building or fixing railroads, and landing giant exploration contracts in Congo and Guinea.

In mineral-rich countries that had been all but abandoned by foreign investors because of unrest and corruption, Chinese companies are reviving output of cobalt and bauxite. China has even become the new mover and shaker in agricultural countries like Ivory Coast, once the crown jewel in France’s postcolonial African empire, where Chinese companies are building a new capital, in Yamoussoukro, paid for by Chinese loans.

Surging Chinese interest in this continent has helped bring about what many Africans believe is the most important moment since the end of the cold war, when democracy was spreading in Africa and Western nations spoke of a “peace dividend” that might ease African poverty.

That blush of interest in Africa quickly faded, though, as did several of the new democracies, and Africans and Westerners have regarded each other warily ever since. Westerners complain about chronic corruption and ineffective government, while Africans lament broken promises on aid and a hostile international economic system.

The Chinese have stepped into this picture, coming to struggling countries like Chad with deep pockets, fewer demands on how African governments should behave and an avowed faith in everyone’s ability to prosper.

As Beijing’s ambassador to this country, Wang Yingwu, said at his residence in Ndjamena, Chad’s capital, where the electricity repeatedly failed, “We are exempting Chadian goods from import duties.” When the interviewer noted that Chad produced almost nothing besides oil, Mr. Wang was undaunted, saying, “If they don’t produce things today, they will tomorrow.”

To help make that happen, China plans to build the country’s first oil refinery, lay new roads, provide irrigation and erect a mobile telephone network, for starters.

With such intensive efforts across the continent, China’s trade with Africa topped $55 billion in 2006, up from less than $10 million in the 1980s. To achieve this growth, it has bypassed multinational institutions like the World Bank and the International Monetary Fund and flouted many of their lending criteria, including minimum standards of transparency, open bidding for contracts, environmental impact studies and assessments of overall debt and fiscal policies.
continued @ source

[Neverwinter]

As Beijing’s ambassador to this country, Wang Yingwu, said at his residence in Ndjamena, Chad’s capital, where the electricity repeatedly failed, “We are exempting Chadian goods from import duties.” When the interviewer noted that Chad produced almost nothing besides oil, Mr. Wang was undaunted, saying, “If they don’t produce things today, they will tomorrow.”

To help make that happen, China plans to build the country’s first oil refinery, lay new roads, provide irrigation and erect a mobile telephone network, for starters.

The Chinese have learned the political game of B.S. very well.
They get what they need for their economy and Africa gets a false hope from the 'any one but negro man'...
;)

[etoile noir]

China Is Not The Problem

By Paul Craig Roberts

08/17/07 "ICH (http://www.informationclearinghouse.info/article18201.htm)"

At a time when even the Wall Street Journal has disappeared into the maw of a huge media conglomerate, the New York Times remains an independent newspaper. But it doesn’t show any independence in reporting or in thought.

The Times issued a mea culpa for letting its reporter, Judith Miller, misinform readers about Iraq, thus helping the neoconservatives set the stage for their invasion. Now the Times’ reporting on Iran seems to be repeating the mistake. After the US commits another senseless act of naked aggression by bombing Iran, will the Times publish another mea culpa?

The Times editorials also serve as conduits for propaganda. On August 13, a Times editorial jumped on China for “irresponsible threats” that threaten free trade. The Times’ editorialists do not understand that the offshoring of American jobs, which the Times mistakenly thinks is free trade, is a far greater threat to America than a reminder from the Chinese, who are tired of US bullying, that China is America’s banker.

Let’s briefly review the “China threat” and then turn to the real problem.

Members of the US government believe, as do many Americans, that the Chinese currency is undervalued relative to the US dollar and that this is the reason for America’s large trade deficit with China. Pressure continues to be applied to China to revalue its currency in order to reduce its trade advantage over goods made in the US.

The pressure put on China is misdirected. The exchange rate is not the main cause of the US trade deficit with China. The costs of labor, regulation and harassment are far lower in China, and US corporations have offshored their production to China in order to benefit from these lower costs. When a company shifts its production from the US to a foreign country, it transforms US GDP into imports. Every time a US company offshores goods and services, it adds to the US trade deficit.

Clearly, it is a mistake for the US government and economists to think of the imbalance as if it were produced by Chinese companies underselling goods produced by US companies in America. The imbalance is the result of US companies producing their goods in China and selling them in America.

Many believe the solution is to force China to revalue its currency, thereby driving up the prices of 70% of the goods on Wal-Mart shelves. Mysteriously, members of the US government believe that it would help the US consumer, who is as dependent on imported manufactured goods as he is on imported energy, to be charged higher prices.

China believes that the exchange rate is not the cause of US offshoring and opposes any rapid change in its currency’s value. In a message issued in order to tell the US to ease off the public bullying, China reminded Washington that the US doesn’t hold all the cards.

The NYT editorial expresses the concern that China’s “threat” will cause protectionist US lawmakers to stick on tariffs and start a trade war. “Free trade, free market” economists rush to tell us how bad this would be for US consumers: A tariff would raise the price of consumer goods.

The free market economists don’t tell us that dollar depreciation would have the same effect. Goods made in China would go up 30 percent in price if a 30 percent tariff was placed on them, and the goods would go up 30 percent in price if the value of the Chinese currency rises 30 percent against the dollar.

So, why all the fuss about tariffs?

The fuss about tariffs makes even less sense once one realizes that the purpose of tariffs is to protect domestically produced goods from cheaper imports. However, US tariffs today would be imposed on the offshored production of US firms. In the era of offshoring, corporations are not a constituency for tariffs.

Tariffs would benefit American labor, something that the US Chamber of Commerce, the National Association of Manufacturers, and the Republican Party would strongly oppose. A wage equalization tariff would wipe out much of the advantage of offshoring. Profits would come down, and with lower profits would come lower CEO compensation and shareholder returns.

Obviously, the corporate interests and Wall Street do not want any tariffs.

The NYT and “free trade” economists haven’t caught on, because they mistakenly think that offshoring is trade. In fact, offshoring is labor arbitrage. US labor is simply removed from production functions that produce goods and services for US markets and replaced with foreign labor. No trade is involved. Instead of being produced in America, US brand names sold in America are produced in China.

It is not China’s fault that American corporations have so little regard for their employees and fellow citizens that they destroy their economic opportunities and give them to foreigners instead.

It is paradoxical that everyone is blaming China for the behavior of American firms. What is China supposed to do, close its borders to foreign capital?

When free market economists align, as they have done, with foreigners against American citizens, they destroy their credibility and the future of economic freedom. Recently the Independent Institute, with which I am associated, stressed that free market associations “have defended completely open immigration and free markets in labor,” emphasizing that 500 economists signed the Independent Institute’s Open Letter on Immigration in behalf of open immigration.

Such a policy is satisfying to some in its ideological purity. But what it means in practice is that the Americans, who are displaced in their professional and manufacturing jobs by offshoring and work visas for foreigners, also cannot find work in the unskilled and semi-skilled jobs taken over by illegal immigrants. A free market policy that gives the bird to American labor is not going to win acceptance by the population. Such a policy serves only the owners of capital and its senior managers.

Free market economists will dispute this conclusion. They claim that offshoring and unrestricted immigration provide consumers with cheaper prices in the market place. What the free market economists do not say is that offshoring and unrestricted immigration also provide US citizens with lower incomes, fewer job opportunities, and less satisfying jobs. There is no evidence that consumer prices fall by more than incomes so that US citizens can be said to benefit materially. The psychological experience of a citizen losing his career to a foreigner is alienating.

The free market economists ignore that a country that offshores its production also offshores its jobs. It becomes dependent on goods and services made in foreign countries, but lacks sufficient export earnings with which to pay for them. A country whose workforce is being reallocated, under pressure of offshoring, to domestic services has nothing to trade for its imports. That is why the US trade deficit has exploded to over $800 billion annually.

Among all the countries of the world, only the US can get away with exploding trade deficits. The reason is that the US inherited from Great Britain, exhausted by two world wars, the reserve currency role. To be the reserve currency country means that your currency is the accepted means of payment to settle international accounts. Countries pay their oil import bills in dollars and settle the deficits in their trade accounts in dollars.

The enormous and continuing US deficits are wearing out the US dollar as reserve currency. A time will come when the US cannot pay for the imports, on which it has become ever more dependent, by flooding the world with ever more dollars.

Offshoring and free market ideology are turning the US into a third world country. According to the Bureau of Labor Statistics, one-quarter of all new US jobs created between June 2006 and June 2007 were for waitresses and bartenders. Almost all of the net new US jobs in the 21st century have been in domestic services.

Free market economists simply ignore the facts and proceed with their ideological justifications of open borders, a policy that is rapidly destroying the ladders of upward mobility for the US population.

[Neverwinter]

Admin:
Please merge this thread (http://www.vivamalta.org/forum/showthread.php?t=5785&highlight=china+economic)