China's President Lays Groundwork for Obama Talks

* WORLD NEWS
* JANUARY 17, 2011
China's President Lays Groundwork for Obama Talks
Hu Highlights Need for U.S.-China Cooperation, Questions Dollar - WSJ.com

By ANDREW BROWNE

BEIJING—Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a "product of the past" and highlighted moves to turn the yuan into a global currency.

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Can anyone say what would happen if the US Dollar loses world reserve status to the Chinese???

At present, EVERY transaction with OPEC is REQUIRED to be performed in US dollars, at least until the Chinese made a private deal with the Russians to conduct oil trade between their countries in either or both of their respective currencies...

So, what are the implications of the calls for movement against the dollar??

Correct me if I'm wrong, TO ME, this is a statement that the world is losing faith in the american currency, I'd wager partially a result of trillions upon trillions of dollars worth of bailouts...so, the world is losing faith that those paper notes ACTUALLY have any value left... which in turn is going to mean that it will require MORE dollars to get the same value of goods from other nations... that means inflation. But HOW MUCH inflation??

There's a new sheriff in town.

Albert Di Salvo said:

There's a new sheriff in town.

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I don't know about you, but having China as 'Sheriff' isn't gonna be a good thing for the majority of people that it affects.

This is just another reason why all of us should refuse to buy crap that is made in China and tell our retailers that we want them to stock American made products.


It starts with us.

Buy American because it puts people back to work and brings manufacturing jobs back to the USA.

All the US bonds China holds are obviously held in dollars, and they pay in absolute dollars, not adjusted for any reason. You simply get a percent on your investment without regard to how much the currency is worth. So if China were to try and rapidly devalue the dollar, which they could do, they'd be shooting themselves in the foot. Not to mention the hit that global trade would take.

China has to look long term if it wants to devalue, weaken, or even replace the dollar. I mean the next 50 to 100 years at the soonest, it has to be done gradually so it won't be such a shock to the system and it has to be done with partners. China will never be big enough to take on the US dollar as a global currency or the US economy one on one, they simply don't have the resources and have too much holding them back to grow into what the United States is. The United States didn't either when it took on its global role, it was only due to all the other major economies in the world destroying themselves during WW2 that the US was actually able to seize its position. So unless there's a WW3 China will have to form trade blocs, something like the SCO, but much closer.

Shanghai Cooperation Organisation - Wikipedia, the free encyclopedia

Specifically I'm talking about China's huge population, which for a long time was a great assets as it was cheap labor which could bring in all kinds of industry and jobs. However as an economy develops so does its work environment and its people. Many experts will say the current recession, and one of the biggest problems in America, is the "consumer culture." Americans will buy buy buy and buy it on credit, which created the demand China now feeds off of, that led to America's extreme trade deficit. We want to buy so much that the only way to get it cheap is to buy it overseas. However America has just over 300 million people, and China over 1.3 Billion and in 50-100 years who knows how much more. What county or continent is going to feed the consumerism of 1.3 billion or more people if China develops into an economy like the United States?

I don't think China wants to take the place of the US, its a tough position to be in. Its much easier to be lacking behind, you have initiative, you're always a target, and you're still an emerging market(since you're always playing catch up), and being on top means you've moved you're economy away from cheap goods productions, something which I'm not sure China can do.

Personally from visiting China I think the country is in disagreement with itself. Within the cities they are constantly seeking to encourage and active consumer culture, its buy buy buy, but out in the country and smaller towns its still collective farm ventures, traditional living, cheap labor factories. If I had to guess I'd say China is seeking to divide its country to "consumers" and "producers" for lack of a better term. By holding a majority of their people in the country side they can maintain their poor lifestyle, thus use them as cheap labor, and not have to constantly ensure the economy grows fast enough to support their increasing standard of living and expectations. The people in the cities will take on the role of the consumer and use up everything the producers make, which isn't exported, as well as of course buy imported products. This will give China a large population of professionals and better educated individuals, lawyers, professors, accountants, etc. With China's 1.3 billion people and much more planned economy and country if they could segregate say 400 million of that into weather and better educated class they'd still have 900 million to supply cheap labor, producer, etc while having a population of professionals larger than the entire population of the United States.

But then again China is still moving forward rapidly and its impossible to tell where its going to end up when it finishes its major advances, like basic infrastructure. I don't think the Chinese government has that detailed of a plan, since its so impossible to predict and plan for the future, but they have an idea where they want to end up and are sailing in that general direction.

BmanMcfly said:

I don't know about you, but having China as 'Sheriff' isn't gonna be a good thing for the majority of people that it affects.

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It won't be good for anyone who loves any of the many versions of America. But it is what it is.

China has been very lucky in it's leadership starting with Deng Xiaoping, and continuing with Jiang Zemin, Hu Jintao and Wen Jibao. The quality of their civilian leadership has made all the difference in the world.

Compare them with Bush, Clinton, Bush and Obama. One of the major problems of the American political system is that the skill set needed to achieve electoral victory is very different from the skill set needed to govern and lead.

GPS_Flex said:

This is just another reason why all of us should refuse to buy crap that is made in China and tell our retailers that we want them to stock American made products.


It starts with us.

Buy American because it puts people back to work and brings manufacturing jobs back to the USA.

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The political and regulatory systems in America don't encourage the kind of investment needed to reestablish manufacturing facilities in the United States.

BmanMcfly said:

* WORLD NEWS
* JANUARY 17, 2011
China's President Lays Groundwork for Obama Talks
Hu Highlights Need for U.S.-China Cooperation, Questions Dollar - WSJ.com


Can anyone say what would happen if the US Dollar loses world reserve status to the Chinese???

At present, EVERY transaction with OPEC is REQUIRED to be performed in US dollars, at least until the Chinese made a private deal with the Russians to conduct oil trade between their countries in either or both of their respective currencies...

So, what are the implications of the calls for movement against the dollar??

Correct me if I'm wrong, TO ME, this is a statement that the world is losing faith in the american currency, I'd wager partially a result of trillions upon trillions of dollars worth of bailouts...so, the world is losing faith that those paper notes ACTUALLY have any value left... which in turn is going to mean that it will require MORE dollars to get the same value of goods from other nations... that means inflation. But HOW MUCH inflation??

Click to expand...

Ultimately, it's not sustainable to have the US dollar as the world currency. That's not necessarily a bad thing, but it is an unavoidable reality. As other large nations become wealthy, the US economy will no longer be the center of the world. It's not so much the world is losing faith in the dollar, as they are gaining faith in other currencies.

Hu's comments that the yuan might become the global currency are laughable, and I assume geared toward a nationalistic domestic audience. The yuan isn't going to be the global currency anytime soon...it's not even a free-floating currency right now. More likely, there will probably be a period of time when the world will simply not have any global currency at all, and will instead use a basket of currencies for international exchanges.

Wiseone said:

All the US bonds China holds are obviously held in dollars, and they pay in absolute dollars, not adjusted for any reason. You simply get a percent on your investment without regard to how much the currency is worth. So if China were to try and rapidly devalue the dollar, which they could do, they'd be shooting themselves in the foot. Not to mention the hit that global trade would take.

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I don't see it as 'China' devaluing the dollar... this is more likely a RESULT of dollar devaluation caused by the injection of at least 28 TRILLION in promises because of TARP. Now, the Federal reserve has been buying it's own bonds, it calls this 'quantitative easing' and version 2... with rumors of QE3...

The Chinese are NOT stupid, they see what the Americans are trying to do to get out of their bind...

China has to look long term if it wants to devalue, weaken, or even replace the dollar. I mean the next 50 to 100 years at the soonest, it has to be done gradually so it won't be such a shock to the system and it has to be done with partners. ... So unless there's a WW3 China will have to form trade blocs, something like the SCO, but much closer.

Shanghai Cooperation Organisation - Wikipedia, the free encyclopedia

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I think you are underestimating the position China is ALREADY in... and in terms of war power... the US army can hardly handle the Iraqi and Afghan resistance, nevermind if the Chinese became aggressive.

Specifically I'm talking about China's huge population, which for a long time was a great a... the consumerism of 1.3 billion or more people if China develops into an economy like the United States?

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That's not going to happen... China has a tightly controlled system... if the people get out of line they are dealt with quickly.

I don't think China wants to take the place of the US, its a tough position to be in. Its much easier to be lacking behind, you have initiative, you're always a target, and you're still an emerging market(since you're always playing catch up), and being on top means you've moved you're economy away from cheap goods productions, something which I'm not sure China can do.

Personally from visiting China I think the country is in disagreement with itself. Within the cities they are constantly seeking to encourage and active consumer culture.... 1.3 billion people and much more planned economy and country if they could segregate say 400 million of that into weather and better educated class they'd still have 900 million to supply cheap labor, producer, etc while having a population of professionals larger than the entire population of the United States.

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Interesting point.

But then again China is still moving forward rapidly and its impossible to tell where its going to end up when it finishes its major advances, like basic infrastructure. I don't think the Chinese government has that detailed of a plan, since its so impossible to predict and plan for the future, but they have an idea where they want to end up and are sailing in that general direction.

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Meanwhile... at least in relative terms, the US is dying.

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I don't think China wants to take the place of the US, its a tough position to be in. Its much easier to be lacking behind, you have initiative, you're always a target, and you're still an emerging market(since you're always playing catch up), and being on top means you've moved you're economy away from cheap goods productions, something which I'm not sure China can do.



Interesting point.



Meanwhile... at least in relative terms, the US is dying.

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The US is not dying, just undergoing a retrenchment

It has borrowed to much and consumed to much. This will require an extended period of lower economic activity to rebuild its wealth, industry and real productivity (as opposed to the productivity created by tradind dollars back and forth)

Provided the American public dont go nuts (either extreme right wing or left wing) it will recover and remain a major world power. It may not be the most powerfull nation in all respects, but it will still be in the top 2-3 in the majority of areas, and still be #1 in a large number of areas

China wants to be no. 1 in East Asia, Central Asia, the Indian Ocean and the western half of the Pacific Ocean. If it effectively controls the sea lanes from East Africa and the Persian Gulf across the Indian Ocean to the Strait of Malacca and the Westen Pacific Ocean, China will have an enclosed system they will ultimately feel capable of defending. With the Blue Water Navy the Chinese are developing they will be in a position to accomplish their objectives of controling resources and trade routes along the flanks of Asia and Africa.

I sorry I thought I was in a serious thread. 28 Trillion in TARP? Contrails off airliners? The Chinese Army being a threat to the United States? People being 'dealt with?' The US dying in relative terms?

If the Chinese were testing sub launched missiles I think they could have a better place to do it than right off the coast of ****ing california.

Albert Di Salvo said:

China wants to be no. 1 in East Asia, Central Asia, the Indian Ocean and the western half of the Pacific Ocean. If it effectively controls the sea lanes from East Africa and the Persian Gulf across the Indian Ocean to the Strait of Malacca and the Westen Pacific Ocean, China will have an enclosed system they will ultimately feel capable of defending. With the Blue Water Navy the Chinese are developing they will be in a position to accomplish their objectives of controling resources and trade routes along the flanks of Asia and Africa.

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I agree with your assessment of their goals. However I think you give too much credit to their navy. China doesn't have the naval technology to build those kind of ships, they also lack any kind of naval doctrine and tradition, since their nation hasn't had a functioning blue water navy in literally hundreds of years. They also lack ports of call that the US has secured through its ownership of islands and treaties throughout the world. And all the while the United States is growing forward with its Navy, China may never seriously catch up.

Wiseone said:

I agree with your assessment of their goals. However I think you give too much credit to their navy. China doesn't have the naval technology to build those kind of ships, they also lack any kind of naval doctrine and tradition, since their nation hasn't had a functioning blue water navy in literally hundreds of years. They also lack ports of call that the US has secured through its ownership of islands and treaties throughout the world. And all the while the United States is growing forward with its Navy, China may never seriously catch up.

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Isn't this about economics?

Wiseone said:

I sorry I thought I was in a serious thread. 28 Trillion in TARP?

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Total Bailout = $23.7 TRILLION
23.7 trillion... oops...

Contrails off airliners?

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Ya, that was an airliner... come on...

The Chinese Army being a threat to the United States?

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The US shoots missiles just off the Chinese shore on, what is probably, a much more common basis then either of us would know... and when you saw what was going on between US and China that week.

People being 'dealt with?'

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In China... YES... The Chinese government runs slave camps for the falun gong, has organ harvesting programs admitted to, etc... so, yes, if the Chinese people get out of line of their 'role' in society... they will get smacked down.

The US dying in relative terms?

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Ya... Chinese economy is exploding, the US had 50+ consecutive months of lower housing values... plus countless other statistics I could point you towards that shows just how it has become mathematically impossible for americans to repay the debt... and that's even assuming a 100% tax rate.

If the Chinese were testing sub launched missiles I think they could have a better place to do it than right off the coast of ****ing california.

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Unless they wanted to flex their muscle and show that they could get past defenses, launch a missile and then gauge the response time of the US military.

What do you think the Chinese reaction would be to finding out that all the paper they have is only worth the paper it's written on??

Wiseone said:

I agree with your assessment of their goals. However I think you give too much credit to their navy. China doesn't have the naval technology to build those kind of ships, they also lack any kind of naval doctrine and tradition, since their nation hasn't had a functioning blue water navy in literally hundreds of years. They also lack ports of call that the US has secured through its ownership of islands and treaties throughout the world. And all the while the United States is growing forward with its Navy, China may never seriously catch up.

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China began building the basis for a blue water navy in the eighties. They formed objectives, gained experience, and became skilled in a number of important maritime skills. They have now or are in development of a series of intermediate range ballistic missiles bases that can reign hell down on American naval bases and ships in Guam, Japan, and on Taiwanese forces at bases in Taiwan.

The Chinese are throwing most of their defense dollars into their navy and air force for a specific head to head high intensity fight with the USN in cyberspace, low earth orbit, the air, sea surface, and underwater. They plan a short sharp war of attrition. After the year 2020 America wouldn't be able to put enough of its own assets on site within a reasonable time to prevent a successful Chinese invasion and occupation of Taiwan.

America would have two choices. Accept defeat or escalate and broaden the war.

Checkout World Military Strength Ranking to find out more about China's missiles, bases, ships, subs, aircraft and more. It's generally believed that it takes two generations of men and equipment to build a body of experiece necessary to operate a blue water navy.

China's challenge to the USN will be the greatest conventional test it has experienced in the Pacific Ocean since V-J Day.

You don't know what Falun Gong is do you?

Wiseone said:

You don't know what Falun Gong is do you?

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Yes. The creation and official treatment of Falun Gong say much about the spiritual emptiness of the Chinese people, and the authoritarian nature of the regime.

Albert Di Salvo said:

Yes. The creation and official treatment of Falun Gong say much about the spiritual emptiness of the Chinese people, and the authoritarian nature of the regime.

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I was talking to Bman, you're post got in front of mine. But yes its treatment does speak to the nature of the Chinese government, but I would hardly call the Chinese people spiritually empty.

Wiseone said:

I was talking to Bman, you're post got in front of mine. But yes its treatment does speak to the nature of the Chinese government, but I would hardly call the Chinese people spiritually empty.

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Ya, it's a non-violent religious sect, whose followers get sent to work camps until their internal organs can be extracted while they are still alive, and be sold to others for profits... do I REALLY NEED to know much more about them then that?

The movement towards the yuan as the global currency, at this point is nothing more than grandstanding on the part of China. As Wiseone mentioned in this thread earlier, the Chinese are so loaded up with US debt that any moves to devalue the US currency would result in their own economc ruin. What Hu was attempting to do is threaten the US over constant criticism towards China's manipulation of the yuan, which by keeping its value low, aides the Chinese in maintaining the large trading deficits.

China pushes back on currency calls as Hu heads to Washington - Yahoo! News

As you can see, how would one expect Hu Jintao to respond to such threats of "currency legislation." All in all, the tough talk between the two will continue until the major issues of Taiwan, North Korea, and human rights are resolved. Though both sides wish to use economics as a weapon, both are too heavily dependent upon the other at this point to take any meaniful steps in this area towards the other.

j-mac

hu always humiliates our half-witted head honcho

in november of 09 obtuse obama went to asia, treated like a puppet by the chairman choreographer

obtuse obama allowed himself to be used as a prop at a chinese "townhall," directed by the people's party, in shanghai

he was completely repulsed on currency, climate, korea, taiwan, human rights, tibet...

der spiegel reported, "obama's nice guy acts gets him nowhere on the world stage"

US Foreign Policy: Obama's Nice Guy Act Gets Him Nowhere on the World Stage - SPIEGEL ONLINE - News - International

the acclaimed council on foreign relations (leslie gelb): "amateur hour at the white house"

Amateur Hour at the White House - Council on Foreign Relations

a week after tsunami tuesday, obama attended the g20 in seoul

he demanded (in the way an irate shirley temple might) currency negotiation, like he always does

unfortunately, only days before, bernanke had announced his most recent 600B of quantitative easing

the consensus international reaction to obama's chubby little fists was---who are you to talk to us, or anyone, about currency?

the national journal called it---"obama's rodney dangerfield moment"

NationalJournal.com - America?s Rodney Dangerfield Moment - Friday, November 12, 2010

the nyt: "obama's economic views rejected on world stage"

Obama's economic view is rejected on world stage - San Jose Mercury News

exactly what does obsequious obama hope to accomplish from this latest tete a tete?

a photo op?

why should the chairman acquiesce to anything?

obama doesn't know what he's doing, he's a rank amateur, a rodney dangerfield

remember THIS photo?

Dalai Lama Trots Past White House Trash - FoxNews.com

how humiliating

read the links, i dare you

then try to spin

michael hirsh and leslie gelb will be waiting

Well, it's not like we didn't know this day would be coming right? It's not like we woke up this morning and said, Oh **** - where did the Chinese come from since yesterday... they've been on the rise since the 1980's and we've given them like - ton's of technology, information and the ability for them to steal the rest. Now they're basically bankrupting the U.S. the way Reagan did to the Soviets during the Cold War.

Here's the deal - we need to cut bait with China - remove the trade imbalance, cut our expenditures over the next 10-15 years and keep our good ideas to ourselves for a decade or two. If not, we'll be wiping China's ass for them for a long time.

In case anyone is curious about the protocol of the meeting between Obama and Hu's Your Daddy, I would like to describe the appropriate procedure for El Jefe Obama:

Walk towards Hu's Your Daddy.

Five feet away from Hu's Your Daddy, drop to your hands and knees.

Avert your eyes.

Slowly bring your head to the ground.

Press your forehead against the ground.

Retain that position until admonished to stand.

If El Jefe Obama can follow these instructions without error, Hu's Your Daddy will grant an audience to El Jefe.

Edit: This procedure is called kowtowing. Obama needs to kowtow to Hu's Your Daddy.