Today’s blog post is dedicated to the rising tension with China. I will make a couple of comments at the end.
As China Rises, Conflict With West Rises Too
DAVOS, Switzerland —As recently as 2008, when China was still an emerging economy eager to put its best foot forward for Western consumers, it lifted censorship, at least temporarily, on several Web sites before the Beijing Olympics. At the same time, it responded to pleas from U.S. and European politicians to cooperate on several other fronts.
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Its currency, the renminbi, is frozen at an undervalued level…
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“China is the West’s greatest hope and greatest fear,” said Kristin Forbes, a former member of the White House Council of Economic Advisers and one of hundreds of top officials and executives flocking to this winter resort for the annual World Economic Forum, which is taking place Wednesday through Sunday.
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China is the biggest recipient of foreign direct investment in the world: 450 of the Fortune 500 companies have business presences there, and many of those still reeling at home are doing brisk business in China. “G.M. is hurting anywhere else, but here [in China] things are quite profitable,” Mr. McGregor said.
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Some say Chinese officials are using their country’s $2.4 trillion in foreign currency reserves as a bargaining chip, knowing that any hint of reducing those reserves would rattle currency markets.
Bargaining chip is a nice word for yoke or leash, isn’t it?
Irritable year ahead expected for relations between the US and China
It is going to be an irritable year in relations between the US and China. After Google’s threatened exit from China, the deadlock of the Copenhagen conference, the latest scrap over Taiwan and half a dozen other points of friction, it is clearly a year in which both countries are exploring whether their relationship is fundamentally changing.
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It would be wrong to be too optimistic. This year has opened with more discord than Obama’s team appeared to expect a year ago. Nor have Sino-British relations fared well. But even if the tone is sour, it is not, at the moment, getting worse.
China may build Middle East naval base
Mr Yin said a permanent base in the region would help supply Chinese ships. “We are not saying we need our navy everywhere in order to fulfil our international commitments,” he said, cautiously. “We are saying to fulfil our international commitments, we need to strengthen our supply capacity.”
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Yin added he was aware that Chinese naval ships in the waters near the Gulf have aroused suspicions, but believed other nations understood Beijing’s intention was to counter pirates. As the world’s largest importer of oil, China is believed to want to establish bases throughout the Indian Ocean and South China Sea to protect its tankers.
US arms sales to Taiwan raise tensions with China
China has cancelled all military exchanges with the US in a sign of its anger at the proposed sale of advanced missiles and helicopters to Taiwan.
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Beijing has also imposed sanctions on the companies selling the arms.
“We made the decision out of considerations on the severe harm of the US arms sales to Taiwan,” said Defence Ministry spokesman Huang Xueping in a statement.
“The US plan will definitely seriously disturb the relations between the two countries.”
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Beijing regards Taiwan as a renegade province that is still part of its territory.
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“The US plan will definitely undermine China-US relations and bring about a serious negative impact on exchanges and co-operation in major areas between the two countries,” said He in a statement.
Under a 1979 Act of Congress, Washington is legally obliged to help Taiwan defend itself.
Flashback to 1995-1996:
Third Taiwan Strait Crisis
The Third Taiwan Strait Crisis, also called the 1995-1996 Taiwan Strait Crisis or the 1996 Taiwan Strait Crisis, was the effect of a series of missile tests conducted by the People’s Republic of China in the waters surrounding Taiwan including the Taiwan Strait from July 21, 1995 to March 23, 1996.
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Another set of missile firings, accompanied by live ammunition exercises, occurred from August 15 to 25, 1995. Naval exercises in August were followed by amphibious exercises in November. Though many of these military activities were part of the normal PLA training regimen, this was the first time in many years that they were announced publicly.
The U.S. government responded by staging the biggest display of American military might in Asia since the Vietnam War. President Clinton ordered ships including the USS Nimitz into the Taiwan Strait in December 1995. This was the first transit by a U.S. warship in the Taiwan Straight since 1976, a clear signal by the U.S. that it was willing and ready to defend Taiwan in the face of Chinese aggression.
And what was the American response after that? Buy Chinese goods, sell them Treasury paper, and move our factories over there.
Ok, so what’s really going on this time? Will there be more saber rattling again followed by the excuse that our symbiotic dysfunctional economies are nosediving together later this year as a result? It wouldn’t be a surprise considering the same people who played “tough” back in the 1990s are still in the same federal positions today.
Is everything just about in place yet for the next world war?
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