Working Together

On Wensday, the results of a conference between Japanese Prime Minister Shinzo Abe and Chinese Premier Wen Jiabao were released. The conference seems to be move toward both countries working to create stability and peace within their region. China and Japan see the need to insure that North Korea maintains the terms found in the agreement made February 13, 2007. The two countries also feel it would beneficial to work more closely together on issues concerning the UN and both countries discussed the issues of giving aid to other countries.

I feel I’ve Read this Before

An Article appearing on The Washington Post’s website stated that the Bush Administration will seek to pressure China to crack down on its rampant black market of US copyrighted material via the WTO. The Bush administration claims that the illegal sale of these copyrighted goods, such as movies and books, have lead to the loss of 2.3 Billion dollars for US Companies. I took notice to this article mainly because as I was conducting research for my wiki project I cam across an article that stated the United States and other countries are attempting to “liberalize” China by means of major international organizations like the WTO. I suppose this could be interpreted as an act on the part of the Bush administration to create a “better” government in China by forcing the Chinese government to crack down on these illegal dealings.

Stuck

As of last Thursday nuclear disarmament talks concerning North Korea came to a screeching halt. In 2005 the United States made moves against Banco Delta Asia, which the US claimed was laundering money for North Korea. Until recently North Korea’s holdings in foreign banks have been frozen. This week the United States attempted to deposit an amount of the holdings into the Bank of China. To this the Chinese governments responded very negatively and have so far stifled the transaction from occurring, after this China has also stopped the six way disarmament talks. Both the United States and other participating countries hope that this dispute can be settled quickly and hope that the talks will resume shortly.

I Guess Lardy Was Right.

I’m not an economist but I do understand that this week saw a plunge in stocks world wide, and of course there are those who would like to know why this occurred. Well and article posted on Bloomberg’s website, Asian Stocks Add to Global Rout After China’s Slump; BHP Drops, at least puts some of the blame on China. The article claims that China’s government has taken measures to stop illegal purchase of stocks, to stop banks from loaning money to those who wish to buy stocks, and has called for banks to call in outstanding loans. Lardy predicted a similar event to occur in the article that I commented on in my last blog. In his article his said that the Chinese government should have taken the above measures years ago or else a plunge in the market world market would happen. So I guess Lardy was right.

Nicholas Lardy’s Opinion

As I was doing some research for my wiki project, I came across an interesting article. The article Exchange Rate and Monetary Policy in China examines and criticizes China’s policy of controlling the value of its currency, the yuan. As Lardy explains China for the past thirty or so years has systematically devalued its own currency, but Lardy also points out that China’s current value that it gives its yuan is skewed and no where near the value that it should be at. Simular to the conclusions of the recent G-7 summit, Lardy feels that China should revalue its currency and allow it to come under the influences of market forces. Lardy also explains that China’s economic growth is directly tied to China’s valuing of the yuan, and because of this China’s credit growth was able to grow tremendously in 2003. The article states that China is able grow at the rate that it is because of the relatively new trend of credit growth and investment that China is now famous for. Lardy concludes that China refuses to allow its currency to fall under market forces in order to continue its current rate of growth. Ultimately though he feels this will lead to a massive undermining of China’s goals to continuously grow and develop. He suggests that China revalues its currency and draws measures against its credit trends. I thought the article was interesting enough and just thought I’d share what I found.   

The Winds of Change?

As China continues to grow economically, the world wonders if the country’s government will also change. After all, how can a communist government properly foster a rapidly expanding capitalist economy? Well soon the world will get to see how China will deal with its new place in the world. Starting March 5 China’s legislative body will again convene and the body will address privatization of old nationally owned businesses. Recently a debate has sprung up over whether the government should protect its growing private sector or not. Many feel that the developing companies have and will only widen the gap between rich and poor. Those who disagree with that view feel that those who would support anti-privatization legislation are of the “old” communist party. But an online petition to stop privatizing business, which was recently censored, was reported to have three million signatures. So the question is will China’s government change to fit its new economic position, or will it make the position fit China. This seems be the story of China’s recent economic history.    

Complaints

Newsvine’s article G-7 Presses China on Yuan Flexibility discusses the conclusions made be a recent meeting of G-7. The G-7 group consisted of Britain, Canada, France, Germany, Italy, Japan, and the United States; and the major conclusion of their meeting was that China must lessen its control over its currency and allow for “market forces” to influence it value. As it stands now China is able to manipulate the value it currency, the Yuan, in a number of different ways, most notable of these methods is the purchasing of US dollars. G-7 feels that China’s continued practice is not good for global growth and that there must a balance of growth. It seems that whenever China makes a new trade agreement or is doing well there are always a group or a council or summit meeting that attempts to curve it gain or stop it altogether. From the articles that I have read it seems that China is growing into the world class superpower and the world, well the west, doesn’t want that to happen.

Perceptions

Yesterday in class I read an article that described China’s relations with several African countries. Also in class we discussed the idea that “ones position depends on where they sit”. I thought that this article did a very good job at describing the various points of views that China and the several other African players have.

Mainly the article presented two ways to look at China’s economic relations with Africa. The fist that China is helping several African nations, like South Africa, and China is also helping promote the development of several countries. The article states that China has aided in several works projects. But on the other hand China many nations feel that China is doing to returning Africa to its colonized state of the early 20^th century.

But the fact of the matter is that China seems to be promoting its own wealth and the wealth of others at the same time, what we see depends on where we sit. Say I’m inclined to look at this through a more liberal approach I would look at China’s actions as promoting relative gains through Africa. So what if China gains more x than its partner, the fact is both countries have gained more than they had before. But if more inclined to a realist perspective I’d say that china is in fact gaining more x and therefore is becoming more powerful not only in its relation to its partner but also to all other nations who are not part of this trade.

So what is the truth? As stated before it seems that China is doing both at the same time. A student in our class who lived in South Africa recently even stated that countries like South Africa have benefited tremendously from trade with China, but other like Zimbabwe have been left in the dust. It seems as if the world is watching to see if China will become the new African colonizer or if it actually help the troubled continent.  

Stuck between the media and the White House

Today Orlando Dozier has an article featured on newsvine.com. His article expresses an opinion that many citizens have begun to agree with; it is the thought that we cannot trust the sources of information that are available to us. After the war in Iraq seemed illegitimate many of my personal friends stopped trusting their government. But as Dozier points out, the media is not a sanctuary either. Who are we left to trust? If things continue in this fashion Iraq will become the least of our nation’s concerns. Can we expect a society function when there is no trust in for law or its major sources of information?  

To What End

Today former Secretaries of Sate Henry Kissinger and Madeleine Albright answered questions before the Senate’s Foreign Relations Committee on Iraq. Both Kissinger and Albright feel that the president’s most recent step of adding another 21,000 troops will not be sufficient to bring stability to the torn country, and both feel the United States now more than ever needs to work with neighboring countries Iran and Syria. I agree because currently as Albright said to the committee the United States appears to be a “colonial power”.

I wonder though what will the United States ask of Syria and Iran? And what can these countries offer the United Sates. From the news reports that I’ve read and seen it seems that Iraq is in a state of anarchy, well not complete anarchy, but life in Iraq is nowhere near as stable as life in California seems to be, or that is at least how the media portrays the situation in Iraq. I feel that diplomacy is needed, but it seems no one knows to what end. Will the US ask Iran for military support, I know that won’t happen, will we ask for supplies, or will Iraq become a modern post war Germany and be split into several different areas in an attempt to rebuild the country from scratch? I doubt any of those ideas are even possible but there are more outcomes given there than anything I’ve read. The United States has continuously expressed our goal is to create a thriving and stable Iraq, adding more troops, although it will probably help, just seems like Iraq is being propped up rather than having the capability to stand alone. I wonder if this cry for diplomacy will turn into an attempt to give legitimacy to an ill planned attempt at enforcing democracy in the world.