So China has led the march on the US economy. I remember wondering, 10-15 years ago, why China helped shore up the US economy? They were buying US debt and kept the Yuan pegged at an artificial level. Even at that younger age, I was cynical enough to ask, why? And today brings that answer to us. With this particular set of circumstances, China may have hammered the final nail into the coffin of US dominance in world economics. And where will this lead us? A weaker US will feel the heat where it hurts most. How will they support their various ill advised wars? How will they continue to influence the world from this weaker position?
The Chinese are nothing if not master long term strategists. I believe they have been waiting for this very day for decades and it has finally arrived. And right on cue, they denounce the US when it's down. Remember S&P only downgraded the US a few days after the Chinese government owned ratings agency downgraded the US. You'd think it odd that the US's largest creditor, which would have an interest in maintaining the desirability of the US securities they hold, was so quick to downgrade it. But it does not surprise me at all. China have 'bought' a US economic collapse over the last couple of decades. It's a master stroke. No war, no loss of life and they've accomplished something which an Islamic terrorist could never do - hurt US interests in a very tangible manner.
At this stage, we MUST remember who helped the Chinese in their endeavors. It was the Bill Clinton government that turned a blind eye to Chinese transgressions. Bill Clinton is credited with the 'It's the economy, stupid' line of thinking. Pandering to China, even going so far as to ignore Chinese spies stealing nuclear and military secrets, the nation must now pay the price for this near sightedness.
The Chinese are nothing if not master long term strategists. I believe they have been waiting for this very day for decades and it has finally arrived. And right on cue, they denounce the US when it's down. Remember S&P only downgraded the US a few days after the Chinese government owned ratings agency downgraded the US. You'd think it odd that the US's largest creditor, which would have an interest in maintaining the desirability of the US securities they hold, was so quick to downgrade it. But it does not surprise me at all. China have 'bought' a US economic collapse over the last couple of decades. It's a master stroke. No war, no loss of life and they've accomplished something which an Islamic terrorist could never do - hurt US interests in a very tangible manner.
At this stage, we MUST remember who helped the Chinese in their endeavors. It was the Bill Clinton government that turned a blind eye to Chinese transgressions. Bill Clinton is credited with the 'It's the economy, stupid' line of thinking. Pandering to China, even going so far as to ignore Chinese spies stealing nuclear and military secrets, the nation must now pay the price for this near sightedness.
I am not sure it was a long term strategy by China because they will be in as much soup as the US if the dollar loses value. They are currently facing high inflation due to pegging the yuan and if they stop the zillion manufacturing factories will shut down due to loss of export to the US. I think China and US are in a debt loop which neither of them can break without grave consequences for their economies. I do agree that the current economic debacle is due to both US and China.This is a line of though that is not echoed often in the media.
ReplyDeleteShilpa
I strongly disagree with the author's thesis that China is a long term brillient strategist and were succesful in manupulating teh US to their strtegy in a tactful step by step way. The US is siolely responsible for where the US is today. China is a media tiger and a luminery like the Moon. The US is totally capable of extricating itself from the current economic mess. However, the binarity of the thoughts that is often presented are yesteryear arguments of victor and loosers. It is about human developement and human race is the best right now than ever before on the planet.
ReplyDeleteShilpa, I agree China stands to lose if the US goes under and this is precisely the argument I presented why China should NOT have downgraded US debt. My question is, why did they? I think the loss is a calculated cost that China is willing to pay. They actually have enough resources and markets minus the US to sustain themselves.
ReplyDeleteVG, absolutely, the way western economies have been living on debt - they are solely responsible for where they are at the moment. But that doesn't mean China did not see an opportunity here and exploit it. I personally believe there is a lot more thought and planning that goes into Chinese policy than we give it credit for.
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