Thursday, April 07, 2005

The New Cold War

US set to get tough over renminbi

The US will not get tough. We never have. We never learn.

There are times when I wonder what motivates the United States to inflict pain on itself. In January, WTO textile quotas against China expired, effectively killing the last of the US textile industry. So now, if we find out that China has been manipulating its currency, what then? Impose trade sanctions or tariffs? Limit imports? What good does it do an already dead industry? The US should proceed. But we have been killing the textile industry for 20 years. It seems sort of late in the game to worry about it now. Let's act as if China popped up on the radar yesterday so that we feel better about it today.

When polled, Americans believe that terrorism is the #1 threat to the United States. This is false. Terrorism is certainly a threat, but compared to the long term threat posed by China, it is minimal. Americans cannot see more than 5 years into the future. The Chinese think in terms of decades.

China threatens us on every front. Our children will suffer a cold war as we did. China practices capitalism unhindered by the normal competitive rules to which most of the World adheres. The economic threat is large and it is real. Their entry into the WTO is a joke, as the above article shows. It is all about power and pride. A centrally controlled industrial complex bent on expansion and guided by nationalism can be extremely dangerous. See Japan, 1937.

The Chinese see themselves as the regional power in Asia and will project that power eventually. They are patient, claiming victim hood at every opportunity, willing to wait until their power is solidified. They must cross swords with the United States. America is in the way.

And what does the US do about it? Open its markets too every cheap sweat-shop manufactured item that the Chinese can cough up, the profits of which are then pumped back into the Chinese military industrial base. Sell them rocket technology, advancing their ballistic missile capability by 20 years in one swing. Perhaps the strategy is to make the Chinese rich and dependent on their riches, integrated into the World economy and thus create a kinder, gentler China. There will not be democracy in China. We are simply enriching and arming our future adversary.

I grew up in the height of the early 80s Cold War Era. I can remember my elation when the Berlin Wall fell in 89. It saddens me that my children will experience the same fears that I did. And it angers me that it was avoidable.