Monday, May 24, 2010

US-China 2nd "Strategic and Economic Dialogue"

The US media would like us to believe that the talks are starting more or less positively, with the news items titled, for example, "China strikes conciliatory note".

Nothing could be further than the truth. The Chinese leadership realises its weak position, and wants to do nothing that will upset the applecart. The US leadership does not understand this, and has done nothing to push China towards any real move that will either benefit the US or the people of China.

1. For example, China has "vowed to spur domestic demand" but China has been vowing to do this ever since the crisis started some 2 years ago. Result so far: zero.

2. China has indulged in more or less equally long-standing talk of the yuan being reformed provided it is done in a way that is " independent, controllable and gradual". ("Indpendent is Chinese code for "don't push us". "Controllable" is Chinese code for "provided it doesn't lessen the hold of the Communist Party in China". And "gradual" is Chinese code for "Don't expect any substantial change").

3. Similarly, when China says that it is working to resolve the concerns of foreign companies about its "indigenous innovation" program that basically cuts foreign companies out of doing technology innovation-related business in China, that is code for "keep looking, because you will look for a long time to see any resolution".

4. What China wants is high-tech exports from the US, on the pretext that this would help balance the US trade deficit - but the correction in the deficit would be relatively small, and it would come at the cost of selling out any possibility of long-term advantage for the US economy over the Chinese economy - in other words, the short-term benefit would come at the cost of permanent long-term disadvantage to the US economy.

5. Neither, it appears, will the US get any movement out of China on North Korea, in spite of the North Koreans sinking a submarine belonging to South Korea.

&. To Beijing's statement that Taiwan is a part of China and that the US should not be selling arms to Taiwan, the Obama administration provided no riposte - at least not in public.

So far, I make that 6 to China, 0 to the USA. Sphere: Related Content

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