Archive for the Protectionist Trade War with China Category

G-20 leaders fail to tackle global economic problems [People’s Daily]

Posted in Capitalism crisis early 21st century, China, Currency wars, G20, Protectionist Trade War with China, Seoul on November 23, 2010 by Zuo Shou / 左手

November 12, 2010

[Original title: “G-20 leaders agree to tackle multiple problems”]

G20 leaders drew a veil over weeks of bickering about their economic policies Friday and agreed to tackle global “tensions and vulnerabilities” that have raised the spectre of a currency war and trade protectionism,…Reuters reported.

The developed and emerging nations agreed at a summit in Seoul to set vague “indicative guidelines” measuring imbalances between their multi-speed economies but, calling a timeout to let tempers cool, left the details to be discussed in the first half of next year.

In a communique signed off at the end of the gathering, the group’s fifth since the financial crisis exploded in 2008, the leaders vowed to move towards market-determined exchange rates and shun competitive devaluations.

They also agreed that there was a critical, but narrow, window of opportunity to conclude the long-elusive Doha round of trade liberalization launched in 2001.

“Risks remain,” the communique said. “Some of us are experiencing strong growth, while others face high levels of unemployment and sluggish recovery. Uneven growth and widening imbalances are fuelling the temptation to diverge from global solutions into uncoordinated actions.”

The G20’s accord sought to recapture the unity [sic] that was forged in crisis two years ago.

The G20 has since fragmented as a synchronized global recession gives way to a multi-speed recovery. Slow-growing advanced economies have kept interest rates at record lows to try to kick-start growth, while big emerging markets have come roaring back so fast that many are worried about overheating.

The leaders did not venture much beyond what was already agreed by their finance ministers last month. They were unable to reach a consensus on how to identify when global imbalances pose a threat to economic stability, merely committing themselves to a discussion of a range of indicators in first half of 2011.

Negotiators has labored until the wee hours of the morning to thrash out an agreement their leaders could all endorse, despite deep divisions that were on public display in the days before the meeting.

Tempers had flared over the U.S. Federal Reserve’s latest bond-buying program aimed at strengthening a shaky recovery, and Ireland’s worsening debt troubles served as a reminder that the financial system is far from fully healed.


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The Seoul G20 Aftermath [Wayne Madsen Report / Strategic Culture Foundation]

Posted in Brazil, Cameron, Currency wars, Early 21st Century global capitalist financial crisis' US origins, Economic crisis & decline, France, Germany, Greece, India, Italy, Obama, Protectionist Trade War with China, Protest action, Russia, Sarkozy, Seoul, South Africa, south Korea, Spain, Turkey, U.K., USA, Wall Street, Wayne Madsen Report, World War II on November 22, 2010 by Zuo Shou / 左手

November 15, 2010

After permitting Wall Street to enrich itself at the expense of the American taxpayers, the Obama administration is poised to pass on the product of its ersatz economy to the rest of the world. We can all look to post-World War I Europe to understand what happens when a nation floods its economy with worthless currency. Germany printed marks and hyper-inflation resulted. Soon, the German people looked for a savior to bring them out of their economic depression and deliver them from the evils of unchecked capitalistic greed. Adolf Hitler’s National Socialists promised German people something better. They and the rest of the world were plunged into World War II.

At the G-20 summit in Seoul, the leaders of the world’s largest economic powers failed to come to an agreement on the U.S. Federal Reserve Bank’s program to dump newly-printed $600 billion into the international economy. China stated that it is adamantly opposed to a move that is a de facto devaluation of the U.S. dollar.

Weakening the strength of the U.S. dollar, while making American exports a better bargain, will also cause investors like China to avoid investing in the ersatz U.S. economy. The specter of trade wars resulted in a statement in Seoul by British Prime Minister David Cameron in which he likened the present global economic situation to inter-bellum Europe in the 1930s. Cameron said currency wars, trade barriers, and economic nationalism could result in a replay of the 1930s.

Writing in the Christian Science Monitor on November 13, former U.S. Secretary of Labor Robert Reich emphasized that Seoul was big on generalities but lacking in specifics. Reich wrote, “The three-page [G-20] communiqué that also emerged from the session brims with bromides about the importance of ‘rebalancing’ the global economy, ‘coordinating’ policies, and refraining from ‘competitive devaluations.'” Reich adds a dire warning about the failure of the Obama administration and the Chinese government to reach an agreement, “. . . not a single word of agreement from China about revaluating the Yuan, or from the United States about refraining from further moves by the Fed to flood the U.S. economy with money (thereby reducing interest rates, causing global investors to look elsewhere for higher returns, and lowering the value of the dollar).”

In other words, Reich says both the United States and China are on a collision course: both nations are intent on boosting exports to boost the purchasing power of their respective consumerist middle classes. An economic collision between Washington and Beijing has ramifications for the rest of the world.

Germany, a nation that knows all-too-well about the dangers of currency devaluation, joined China in criticizing the United States’ dollar devaluation. Emergent economic power Brazil joined China and Germany in criticizing the Americans over the Federal Reserve’s dollar dumping plans.

President Obama did not help his cause in Seoul when he said that the Federal Reserve’s plan to flood the economy with $600 billion in newly-printed dollars was not aimed at devaluing the U.S. dollar. China, Brazil, and Germany knew Obama was being disingenuous, especially when former Fed chairman Alan Greenspan, himself responsible for the collapse of the U.S. housing market by advancing the scheme of sub-prime mortgages, wrote in the Financial Times, that the Fed’s quantitative easing, the fancy name for printing ersatz dollars thus devaluing the dollar, was aimed at “currency weakening.”

Canadian Prime Minister Stephen Harper, considered a lap dog of Washington, was one of the few leaders in Seoul who came to Obama’s defense and supported quantitative easing of the dollar. However, Canada is so interlinked to the downfall of the U.S. economy through the fakery known as the North American Free Trade Agreement (NAFTA); it has no other choice but to stick with floundering American economic policies and its dying neighbor.

It is with a degree of schadenfreude that emerging market economies (EMEs) like China, India, Russia, Brazil, and Turkey are witnessing the meltdown of the economies of nations like the United States, Britain, and France, nations that once ruled the nations of Asia, the Middle East, Latin America, and Africa through the club of economic and financial dominance.

The Obama, Cameron, and Sarkozy governments are instituting austerity plans that will pass on the costs of the chicanery and greed brought about by Wall Street and the global bankers to pensioners, the poor, and those dependent on government-subsidized health care and education. The emergent economic powers want no part of plans to “internationalize” the financial excesses of the Western governments and their banking friends.

President Obama’s National Commission on Fiscal Responsibility and Reform is already stating that the impending retirement of America’s “baby boomer” population will stress Social Security, Medicare, and Medicaid beyond the breaking point, a fact stressed for years by former Comptroller General David Walker before he resigned in disgust. But the Obama administration and the newly-invigorated Republican opposition, intent on continued spending on defense, which more aptly should be called “war,” and continued bailing out of Wall Street criminals, will expect the inevitable cuts in social safety net programs to come at the expense of the poor and middle class.

The U.S. Treasury Department now plans to pass on the $259 billion losses to Fannie Mae and Freddie Mac, caused by foreclosures on risky mortgages they ultimately guaranteed, to the American taxpayers. This outrage comes after the American taxpayers were forced to bail out the U.S. auto industry and Wall Street financial firms.

Riots, general strikes, and mass street protests in Greece, Italy, Britain, and Spain over the passing on of the greed of the global bankers mean that business as usual for those who periodically gather at Bilderberg, Davos, Trilateral Commission, G8, G20, and other closed-door conclaves is over. No longer will workers, unemployed, students, and pensioners sit idly by while the wealthy elites engage in their secretive alchemy of quantitative easing, credit default swaps, collateralized debt obligations, hedge fund intrigue, and other vulture capitalist contrivances while the middle class disappears and the poor grow more desperate.

South African President Jacob Zuma expressed the feelings of many of the world’s developing nations when he stressed the need for transparency in the development of any new international economic system. Zuma said there must be “transparent ways to implement “well thought-out rules” for the global economy.

G20 protesters in Seoul were tightly restricted by South Korea’s military-police regime and their messages of opposition to the G20 were strictly censored by the international and domestic South Korean media. South Korea’s “special law” permitted police to swoop in on and arrest protesters who managed to get close to the summit site in south Seoul. Those who claim that the future of the world is determined by an…elite of smug and self-effacing individuals have a point. When it comes to the global conclaves that determine the future of workers, currencies, industries, and nation-states, secrecy is the rule and transparency in virtually non-existent.

Billions, not millions, of people around the world will soon vent their anger at those who plunged the world into financial collapse: the vipers, vampires, and vultures of modern capitalism.

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ALSO SEE: “G20 summit fails to resolve global trade, currency conflicts” [World Socialist Web Site]

Official blasts U.S. 301 probe of Chinese clean energy policies [Xinhua]

Posted in Alternative Energy, China, China-US relations, Energy, Protectionist Trade War with China, USA on November 18, 2010 by Zuo Shou / 左手

BEIJING, Nov. 4 (Xinhua) — A senior official with the China Chamber of International Commerce (CCIC) said Wednesday the United States has launched the wrong probe at the wrong time into the policies and practices by China in its green technology sector, as now is the “best time” for bilateral cooperation in the sector.

The denunciation of the 301 probe by Lin Shunjie, CCIC deputy secretary general, came after the U.S. government decided to initiate an investigation on Oct. 15 into China’s policies and practices in the clean energy industry, acting upon a petition filed in September by the United Steelworkers union.

The union claimed the massive subsidies and discriminatory policies by China were shutting U.S. businesses out of China’s renewable energy market and causing job losses in the United States. These charges come amidst worries that U.S. protectionist measures against its trade partners might be on the rise due to its sluggish economic recovery.

However, Lin Shunjie said government subsidies in the United States to protect its clean energy industry were more extensive than those in China, adding the United States should reevaluate its subsidy policies and to especially benefit small and medium-sized companies.

Further, Lin suggested the U.S. government increase the channels of financing for these small-scale companies in order to improve their competence in trade, rather than accuse other countries.

“The competence of small and medium-sized renewable energy companies in the United States is far behind those in Europe, Japan, and even Australia,” said Lin, “while the Chinese market is open and is willing to import more products from overseas.”

Lin added that China had a trade platform for imported goods exhibitions in Shanghai, but so far very few U.S. companies have reached deals. “The U.S. government has not done enough in helping its enterprises increase their exports.”

The next five to 10 years would be the period when China and the United States see technology transfers and heightened inter-dependence of markets, Lin said while attending a conference held in Beijing on Wednesday.

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Blaming China is paranoid: Time Magazine [People’s Daily]

Posted in Anti-China propaganda exposure, Capitalism crisis early 21st century, China, China-bashing, Currency wars, Economic crisis & decline, Protectionist Trade War with China, Sinophobia, USA, Yellow Peril myth on November 14, 2010 by Zuo Shou / 左手

“…When did we [USA citizens] collectively go through the looking glass and end up in this distorted economic universe? The idea that the U.S. is not responsible for its own economic stagnation, housing bubble and unemployment is a black-is-white, up-is-down view that only insecurity can breed…,”

November 1, 2010

An article appeared on The Time Magazine late last month said that the United States should act like “a great nation”, and not always blame China for its own economic problems.

The story, authored by Zachary Karabell, said that China is not perfect yet, but holding the rapidly rising Asian country accountable for U.S.’s domestic woes is beyond anachronistic. It reflected a dangerous refusal to deal with the world as it is.

It said that retaliating against China over currencies will not restore high-end manufacturing jobs back to the United States. It will also not revive construction or retool the American labor force, and it will not rebuild rotting U.S. bridges or create a next-generation energy grid.

The article believes that this is an argument born of fear and fueled by paranoia. It obscures the degree to which the economies of China and the U.S. have become symbiotic.

“Those trillions in reserves that China accumulates: Where do they go? Back to the U.S. in the form of loans to the federal government. Those made-in-China goods that account for the trade deficit: Whom do they benefit? China, yes, but also American consumers and companies. Without China, American companies could not have maintained their profitability in recent years. Take two marquee names, Caterpillar and Nike. Both manufacture in China, but both also view China as a fast-growing market for their products,” the article said.

The U.S., leading the charge for developed nations, has convinced itself that China has purposely kept its currency undervalued to make its exports more attractive.

“When did we collectively go through the looking glass and end up in this distorted economic universe? The idea that the U.S. is not responsible for its own economic stagnation, housing bubble and unemployment is a black-is-white, up-is-down view that only insecurity can breed,” said the article.

“The U.S. cannot force China to bend, but it can cause serious disruptions to the global economy. We can take the cue from our fears and plunge the world into chaos. Or we can act like the great nation that we profess to be and tend zealously to our own problems rather than looking abroad for dragons to slay,” it said.

By People’s Daily Online

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“Correct orientation” for G20 summit meeting [People’s Daily]

Posted in Capitalism crisis early 21st century, G20, Protectionist Trade War with China, south Korea on November 13, 2010 by Zuo Shou / 左手

November 11, 2010

The two-day, semi-annual Summit of the Group of Twenty (G20), whose members include the world’s largest economies, [began] Thursday, Nov. 11 in the Republic of Korea (ROK) and [was] held for the first time in an Asian nation. Since the eruption of global financial crisis two years ago, the world community set up the G20 framework to promote international cooperation and work to address common challenges for global economy recovery.

G20 leaders have met four times in the last two years and the Summit gathering mechanism has become [a purported] major platform to spur the balanced economic development of the humankind. The overall world economic recovery is imbalanced…, far from being freed from the risk zones. The global financial setup restructuring is in ascendant, a financial market regulatory mechanism is still far from being in place, and the G20 regulations are yet to be instituted.

The fifth G20 Seoul summit is definitely being held against such a backdrop. While affirming the new mechanism to be useful and efficient, the international community has also come to see the current world economic boost is not stable and that reversibility is not ruled out in the process, and so great expectations have be pinned on the G20 summit in a hope that it would keep to the correct orientation.

Participants at the summit are likely to confer on measures for a faster world economic recovery and the establishment of a global financial monitoring system. Expanding the voting power of emerging economies at the World Bank, IMF and other world financial institutions and finding ways to curb trade protectionism are also likely to be on the agenda. If the summit advances in this right orientation, developed and developing nations can go on joining hands to boost global economic growth as they did in the immediate aftermath of the global financial crisis.

Anyhow, countries around the world are in an urgent need of sincere, vigorous and unified efforts to seek a fundamental solution to the problems caused by the global financial crisis, in order to enhance or consolidate the momentum for global economic recovery.

Such ardent expectations for the G20 summit are not without reason. The economic recovery or development of varied economic zones is still very uneven. For a period of time, the fiscal imbalance in some member nations of the Euro zone has not yet been off the hook. In the face of financial crisis, countries have opted to increase internal and external consume demand in a bid to actively create more job opportunities. Of late, a certain power has made a decision to print more dollars to stimulate exports instead of increasing labor efficiency and technological innovation to sharpen its competitive edge. And the entire international community has questioned this short-sighted move.

Indeed, world economy is increasingly inter-blending, and the emergence of any major problems is the outcome of joint effect, nor any single move can be tackled independently. It is the demand of all nations to gradually shift their economic growth mode to a more balanced and sustainable level in the meanwhile to translate the global economic order into a more equitable state by concerted multilateral cooperation. And the global community, via the vigorous cooperation for mutual benefit, may extricate itself from a predicament and enter into the next phase that could attain relatively reasonable and balance development…

…Even when the shadow of financial crisis has not phased out completely and the global economic growth is still facing challenges, a certain power [the U.S.A.] is ready to “demolish the bridge even it has yet to cross the river”. This caused much anxiety even before the G20 Summit. It is widely hoped that the participating parties will go on helping each other and enhancing macroeconomic policy coordination, and this could send out a positive message for reinforcing market unity.

The mission of the 2010 G20 Seoul Summit has a long, long way to go. There is also a great deal to do in advancing the global financial system and beefing up financial market regulations. As a matter of course, the mission to balance the North-South development remains tough as the emerging economies and developing countries are still situated in a vulnerable, disadvantageous position. Without the settlement of this issue, it is out of the question to tackle some issues for developed countries, whereas the trade protectionism adopted in some spheres at the expense of others will eventually undermine the global economic adjustment.

All nations need to enhance their cooperation to tide over difficulties, since the global financial crisis has complex causes. It is their legitimate interest to expand their exports and increase their employment. However, in order to overcome trade imbalance, they should take joint efforts to transform their economic growth mode and step up their economic restructuring. So, the G20 leaders should seize the opportunity to spur global economy to the vigorous, sustainable and balanced growth.

By People’s Daily Online and contributed by Prof. Sheng Dingli, an ace expert on international relations and the executive dean of the University’s Institute of International Studies

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US ‘politicizing’ Asian meetings [People’s Daily]

Posted in China, China-US relations, Encirclement of China, Hillary Clinton, Protectionist Trade War with China, Russia, US imperialism, USA, Yuan appreciation on November 11, 2010 by Zuo Shou / 左手

October 29, 2010

Asian leaders gathered in Vietnam’s capital city of Hanoi (in late October 2010) for a series of meetings amid a US attempt to reinforce its power in the Asia-Pacific region, and analysts say Premier Wen Jiabao is attending to mitigate concerns of some Asian countries over a rising China.

The meetings are taking place against the backdrop of mounting pressure on China over its currency and maritime territorial disputes.

Major concerns expected to be addressed during the series of meetings include the increasing US presence in Asia, as well as the influence that the presence of the US and Russia at the East Asia Summit will have on regional politics and economies.

Some analysts say that US’ involvement in the meeting shifts its focus from economic issues to political ones, and that the US tends to combine territorial disputes in the region with other political issues – a practice that the analysts say can serve only to complicate the situation in the region rather than resolve issues.

US Secretary of State Hillary Clinton, heading for an Asia-Pacific tour to “bolster ties with countries in the region,” spent Thursday in Hawaii and was scheduled to give “remarks on American leadership in the Asia-Pacific region,” according to Kurt Campbell, the US assistant secretary of state for East Asia and Pacific affairs.

The East Asia Summit, which used to include the 10 ASEAN countries plus China, Japan, South Korea, New Zealand and Australia, has been extended to include Russia and the US. The two countries will become members next year. Russian Foreign Minister Sergey Lavrov and Clinton will attend the summit as special guests this year.

Wu Xinbo, deputy director of the Center for American Studies at Fudan University, told the Global Times that the US’ involvement in the meeting will result in a loss of its economic focus.

“The US hopes to instill US values into the meeting to contain China and influence ASEAN countries. It won’t be a surprise if the meeting is dominated by empty talk and a war of words in the future,” he said.

Jin Canrong, vice director of the School of International Studies at Renmin University of China, said that ASEAN countries are taking a positive step in making the meeting bigger and more encompassing by inviting the US and Russia, but it may cause ASEAN countries to lose control of the meeting.

Jin speculated that the 10 ASEAN countries are probably concerned with China’s rapid rise, and they want to use the US and Russia as counterbalances.

The 10-member ASEAN bloc comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Cheng Chongren, a professor with the Institute of International Relations at Fudan University, said that “the US is seeking to gain a foothold in Asia, as well as a member country status in the East Asia Summit, in the context of containing China…”

By Guo Qiang, Global Times

Song Shengxia and agencies contributed to this story

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US-China conflict may be central at G20 summit [People’s Daily]

Posted in China, China-US relations, Currency wars, G20, Protectionist Trade War with China, Seoul, south Korea, USA, USA 21st Century Cold War on October 23, 2010 by Zuo Shou / 左手

October 23, 2010

G20 finance ministers are unlikely to reach agreement on a proposal by the United States to limit trade imbalances, economists have predicted.

And possible disagreements could impact the settlement of currency issues and cause tensions at the upcoming G20 Seoul Summit – where conflicts between the US and China are expected to take center stage, they said.

Finance ministers and central bankers from the G20 members met on Friday in Gyeongju, Republic of Korea. The two-day meeting will focus on coordination of currency issues and trade imbalances. The meeting is meant to pave the way for the meeting of world leaders at the G20 summit at the beginning of next month.

But Chinese economists and some sources from the Republic of Korea said they are not hopeful about solid agreement being reached during the meeting as the US proposal does not have the support of many emerging nations including China, Russia and India, and also Germany, which runs a huge trade surplus.

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