...opacity, nationalism and claims of victimization will slow ending the current pandemic, discovering its origin(s) and preventing☣ preparing or responding to the next one...
☣ Preventing implies pandemics are predictable, which is highly likely wrong...that is the prior pandemic is independent of the next...think earthquakes...preparing for the next pandemic is highly likely right...
...read and weep over our nation's choices that turned a small viral cluster into a ginormous clusterf#%k...hopefully when the next potential pandemic strikes our nation the sociopaths, incompetents and sycophants will not impede our public health professionals' prompt response...
"...Any pandemic management strategy relying upon immunity from natural infections [oft incorrectly referred to as herd immunity] for COVID-19 is flawed..."
[UPDATED] On May 9th a didactic U.S. Space Command unhelpfully reminded us that it is "unknown if the [CZ-5B] debris impacted land or water"...maybe our space command can tell us where its calculations show the biggest piece of the CZ-5B landed?
China and United States begin the delicate domestic dance of figuring out how to synergistically propel each country''s economic growth without alienating one another.
On one level this is a "problem" all nations should have—mutual economic interdependence such that neither nation can effectively afford to alienate the other. Each must work with the other or both nations will suffer.
Economists for both China and the United States are excellent, but this is not fundamentally an economist''s problem nor can they do little more than crunch the data, develop and run the models, and provide economic forecasts.
This is about the kind of relationship China and the United States expect to develop and maintain over the next century. Get it right and each country will gloriously benefit—get it wrong and the result will be anything but harmonious.
It's not the time for trite and trivial accusations and counter-accusations about currency manipulation. It''s a time for candid, frank, transparent, honest, and broad ranging discussions about what each country requires from the other to ensure and assure our mutually beneficial friendship extends through the next half century and beyond.
Economists will play a role. Skilled leadership, politicians, and negotiators each capable of assuming nothing, exploring everything, and making tough transformational decisions will play an even greater role.
Treat it as a short term rhetorical game for gain versus a long term candid, honest, frank, and transparent discussion between mutually respectful friends at your nation''s own risk!
It's difficult to think of big power nations working hard together to complete a quality bilateral investment treaty as a relationship on a bad path. A multidimensional relationship that captivates, confounds, and challenges, sure4, but that's not bad!
"...I also want to underscore that market-determined exchange rates are essential to global economic vitality. The signals that flexible exchange rates send are necessary to support a strong and balanced global economy...."--President''s June 2010 G-20 Letter--
Blog:
UPDATED 02/26/2010 CFR, Reality Bites. A short light-hearted assessment of the current China-U.S. relationship that's maybe too close to the truth.
UPDATED 06/02/2009 WSJ, Full Text of Geithner's Speech at Peking University.
Geithner''s former Mandarin teacher has a laugh at his expense. Presenting him with an earlier picture while hinting that more than learning Mandarin was afoot.
It's unclear why China's top leadership thinks it can hang a Big-Character sign around every country's neck like it's a struggling "capitalist roader cadre" that must be coerced into "class-struggle" and "self-criticism"?
...nations, including China will not cut national and international poverty with an oxymoron like "using the sword of the law"...the using the "sword of the law" can reverse forty years of reform and opening in four days...
...most China hands and others would not accuse our unstable, unfit, unwell, unbalanced, and unlawful "new" alt-white-house et al. (aka "extraordinarily stable genius") of "over-thinking" before launching his "kidnap the princess" China strategy...
"...However, at the same time that we fortify ourselves against harmful outside interference[♔], we must also be mindful to do no harm. In particular, we must guard against having this report used unfairly to cast aspersions on Chinese, whether Chinese American immigrants who have become (or are becoming) United States citizens, Chinese students, Chinese business people, or other kinds of Chinese visitors, whose contributions to America’s progress over the past century have been enormous...
...Just because the Chinese Communist Party presumes that all ethnic Chinese (wherever they may reside) still owe some measure of loyalty “to the Chinese motherland,” zuguo (祖国), does not mean that they are collectively in possession of compromised loyalty to their adopted home or place of study. ..."--Orville Schell and Larry Diamond, Report's Afterword--
[♔].....it is unclear how an interfering China will benefit from threatening any nation, much less Canada or the United States with severe consequences when they're simply adhering with the rule of law...it's reminiscent of the strategy used by our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al., Putin, House of Saud, etc...
...our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al. could learn a lot from Canada's Foreign Affairs Minister Chrystia Freeland...but, it can't because it knows more than everybody...
...our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al. may opportunistically denigrate globalism for domestic gain, but somebody must sponsor carrier strike groups and economic infrastructure...only in the Potemkin presidency of our unstable, unfit, unwell, and unbalanced "new" alt-white-house et al. can disordered (some might say delusional) nationalistic drivel dominate...
...it is beyond hilariously ironic that some have labeled China's global sponsorship, debt traps...how about offering developing countries more generous deals instead of nationalistic rhetoric, propaganda, and Thucydides Trap theses (Allison's latest Ted talk promoting his thesis)...ensuring China avoids a so called "Middle Income Trap" (IMF, Growth Slowdowns and the Middle-Income Trap) is more beneficial, globally...whose (war) dance is this, anyway?..
Continuing improvements and transition of China's economy (e.g. inefficiencies, freer currency, anti-corruption, environment pollution, indicators, import model etc.) requires tough decisions, hard work, and help from the United States et al., not miracles.
The President of the Peoples Republic of China and leader of the Communist Party of China defending the liberal world trade regimen against the astonishing illiberal assertions of the prospective president of the United States! (e.g. praising Britain's EU exit and its weakening currency; threatening punitive tariffs; threatening to scrap multilateral trade agreements etc.) You cannot make this stuff up!!
"Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war." --President Peoples Republic of China, Xi, Jinping, Davos 2017--
One suspects President Xi et al. will quickly learn how to correctly filter an increasingly noisy U.S.-China relationship, which will produce a surprisingly familiar signal.
It's difficult to delicately dance with a dance partner behaving like a bull[y] in a bullfighting arena charging at red capes! A skillful matador(s) will be required to [re]tire the bull[y] without getting gored or harming the bull[y].
Thank you President Obama for your global leadership during the past eight years. Watching your titular successor, to date, dance with one leg and arm is a tragicomedy, which trivialize confidence in nations' cooperative relationships.
Premier Li's recent westward journey points our "[not so] new" President towards many fruitful opportunities to advance our cooperative bilateral relationship with China.
"The G20 also welcomed the inclusion of the Renminbi into the SDR (Special Drawing Right) currency basket as of October 1st--an important milestone that will help strengthen the international monetary system as well as China's role in the global economy." --IMF, Managing Director Christine Lagarde--
Overcharged geopolitical environments are antithetical to global stability and predictability, regardless of what's in the IMFSDR currency basket.
Finally, our global economic and financial regulators are beginning to view "exceptional" (some might say ridiculous or bu*&sh!t) reporting of corporate financial and economic activity as a reason for close and transparent investigation instead of awe or envy!
Delicate dancing requires partners to follow the same step, lest one or both get hurt.
China's tangential bullying in the South and East China Sea has been a self-defeating and self-extinguishing exercise, which should not distract or impede either nation from military and non-military cooperation.
Suppose that stability (or harmony) requires governance by consensus, an informed citizenry and a transparent government.
Opaque governments implicitly suppose stability (or harmony) requires censorship and secrecy, often blaming transparency and others for any eventual instability that invariably ensues.
Government leaders (or surrogates) secretly and opaquely sending large sums of money out of their country seems like indicia of instability (not unlike an insider trader). Subsequent censorship of information disclosing such secret transfers coupled with military aggression, exaggerated nationalism and repression of dissidents seems like a baleful omen of an accelerating instability.
Ironically, increasing the instability, which censorship and secrecy seeks to avoid!
Unsupported hyperbolic statements by well-meaning Chinese and American generals are distinctly unhelpful and unlikely to motivate an improved bilateral relationship.
Of more concern than a China that rises is a China that fails to rise—only slightly less concerning is that some seemly prefer confrontation over cooperation and coercion over competitive or comparative advantage.
A paper aiming to reduce the probability that China and the United States jointly produce a tragi-comedy, which plays on our global stage to critical condemnation.
Both nations have a responsibility to jointly produce a modern opera, which plays on the global stage to critical acclaim (hint: it will likely have both Chinese and American characteristics).
It's unclear whether the state owned-controlled-sponsored enterprise(s) can or will predominated global competition?
Most of the hearing witnesses seem to generally focus on a variant of the theme that China is coupling currency controls and state owned-controlled-sponsored enterprises to subsidize domestic and foreign markets.
But how is China's global subsidy of the consumer harmful? Perhaps this is what hearing witness Paul T. Saulski was getting at by stating:
"I will end by pointing out that, although these policies do benefit state-owned enterprises and industries vis-à-vis their foreign competitors, these policies do not come without significant cost to the Chinese economy."
Of course a nation's choice of models (economic, financial, legal and production) is independent of the requirement that all these models and all actors must operate in a globally transparent and accountable environment.
Discovering your collateral debt obligation3 is worthless must not await a sovereign default; discovering medical grade silicon substitutes must not await implant rupture; discovering a metal was not heat treated must not await a crash; discovering an active ingredient substitution must not await the harm or death of a patient; etc.
The good news is that on this anniversary of the Nixon-Kissinger trip to China we're still discussing how best to further open our nations.
Today's open economics means your dance is significantly influenced, if not determined by the dance(s) of others—the chaos of stopping the music and then competing for chairs is no longer desirable, if it ever was.
Our future economic models must ensure the music does not stop or when it does that there is a seat for every ass.
"...Many of the Chinese exports to the United States are no longer produced in the U.S., and I don''t believe that the United States will restart the production of those products -- products which are at the low end of the value-added chain....."--Reuters quoting China Premier Wen Jiabao--
Our current leadership is now struggling to create the high-value-added replacement jobs—unfortunately the low-value-added jobs were lost faster than the high-value-added jobs were created.
Blaming China will not create the replacement high-value-added jobs.
Blaming China should not substitute for focusing on America, including support for our citizens and residents negatively impacted by our transition toward increased global cooperative competition.
All nations must avoid the politically expedient tendency to characterized other peer nations as engaging in inimical behavior; instead they must cooperate to ensure stable competition in our increasingly global economic and financial systems.
"...We welcome China''s decision to increase the flexibility of its exchange rate,...Vigorous implementation would make a positive contribution to strong and balanced global growth. We look forward to continuing our work with China in the G20 and bilaterally to strengthen the recovery,..."--Xinhua quoting U.S. Treasury Secretary Geithner--.
China representatives are scheduled to discuss currency manipulation and balance of trade issues with senators ahead of a vote on whether the Yuan is being artificially undervalued against the dollar.
Many think the current Yuan:Dollar ratio of 6.83:1 is 25-40 percent undervalued.
It seems preferable for China to develop the non-authoritarian institutions required for a stable civil society as opposed to pursuing unsustainable growth policy that distort or destabilize the global economy in pursuit of the same.
Mostly fits right now.
Unfortunately China leaders like our leaders will tend toward stoking the nationalism rhetoric. The rhetoric can be dangerous because it substitutes emotional appeasement for doing the heavy lifting required for long-term sustainable solutions.
Many times leaders of a nation cynically use nationalism believing they can control the passions. But such passions are difficult to control once stoked.
Citizens in both China and America must condemn any effort by our leaders to substitute nationalism for the hard work of ensuring sustainable global growth.
Protectionism or terminating dialogue or inflammatory rhetoric regardless of the differences or disagreements are nationalistic and impede sustainable global growth.
More imbalances left behind by the previous administration. A policy of
creating growth using the mantra "markets clear everything" has created
titanic imbalances and disasters.
Balanced growth is preferred growth because it''s sustainable growth.
Caution: How will our current administration determine and communicate that it is: ensuring a level playing field for fair trade; and not protecting inefficient domestic industries lacking innovation?
Our president has signaled he will oppose protectionism while ensuring a level playing field for competition, but data and information must accompany the words.
Understandably China is left to assert subjective statements like "At the moment...the level of the yuan [sic] is close to reasonable and balanced."
The reply is simple and direct...well then let''s float your currency and more objectively test your statement. Many think the Yuan is still 30-40 percent undervalued making our goods relatively more expensive for the Chinese consumer, among other things.
UPDATED 01/15/2010 NYT, Murray: US Senators Urge China Action on Currency.
A nation shifting from an export to import model must lawfully or unlawfully build its intellectual property assets—unfortunately most nations, and China is no exception, engage both lawful and unlawful channels (the recent Google-China incident is about this in spades) for increasing their intellectual property assets.
Authoritarian regimes will tend toward unlawful channels simply because their governing model is in conflict with the freedoms necessary for lawful generation of cutting-edge intellectual property assets.
However our leader are shortsighted not to recognize the untenability (from China''s perspective) of asserting that China floats its currency and abandon its efforts to lawfully increase its intellectual property assets.
Our leaders are also shortsighted to place all their focus on the necessity of prying open China''s markets to the exclusion of developing, protecting, and securing our next generation intellectual property assets.
We simply do not want to be in the position of competing with an authoritarian China using an export model to exploit an infinite supply of low-cost labor!
Hopefully, our forthcoming Google incident demarche will implicitly (if not explicitly) make clear to China and other American companies we have no such intention of doing so.
UPDATED 07/27/2009 Reuters, Obama calls for deeper U.S.-Chinese ties.
Vice Premier Wang, Secretary of State Clinton, and Treasury Secretary Geithner at U.S.-China Strategic and Economic Dialogue in Washington July 27, 2009.
"...The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world,..."--President Obama--
This is a huge issue and one not easily solved by China''s leaders.
China''s leaders would like to achieve market status because it eliminates "price imputation" on a host of trade related issues.
In a "planned economy" (as opposed to market economy) prices are not objectively and reliably determined (central planning sets prices)—so in some trade related circumstances market economies will calculate an approximate market price and impute it to China''s goods.
...Of course if you are trying to build confidence in your currency it is helpful to subject that currency to market forces ("float").
If over time the currency maintains its value investors gain confidence. If on the other hand you peg your currency at a predetermined value and intervene in the currency markets to maintain that value investors have no simple way of objectively determining if the currency value reflects its true value or a "manipulated value".
But if China "floats" its currency its true market value may cause unintended or undesirable (from the perspective of China''s leadership) consequences. For example it may cause an outflow of currency from China''s banks; it may cause export prices to rise making them less competitive internationally; it may increase the cost of vital infrastructure projects; etc.
It''s no easy task to float your currency while simultaneously avoiding all undesirable consequences—just ask our secretary of Treasury, Timothy Geithner!
In case you think its simple or black-white consider whether it's better to have hedge fund managers and currency speculators manipulating your currency or your nation's central bankers?
UPDATED 05/22/2009 UPI, Pelosi, U.S. delegation to visit China [May 24-31, 2009].
Whether you agree or disagree with China''s leaders many most acknowledge and credit their Herculean efforts to transform China; reduce its crippling poverty; and place it on a path of global participation (sometimes it''s easy to forget China is a developing nation).
Our leaders will do well to assume China''s leaders have objectively studied and thoroughly understand most of the critical problems confronting China—demonstrating that same understanding and communicating how America can play a constructive and accommodating role in solving those problems will be most welcomed.
...And who knows what together we can accomplish?
UPDATED 05/17/2009 NYT, The China Puzzle. It is not often we read an article, even in the NYT, that aims at educating the reader—David Leonhard has accomplished this in a infinitesimal incremental way—kudos!
It''s not that our trade imbalance with China is per se the problem—it''s what our policymakers for the previous eight years did with China''s loaned foreign exchange surplus that is an enormous problem—they consumed it instead of investing and now have nothing to show for it, except rusting military hardware, scrap metal, and a cheap DVD player with a MTBF of 200 to 400 hours!
Competing with China in the low to medium skilled labor market is not something America wants to accomplish—whether and why we need to are different and most unfortunate questions our policymakers are currently asking and debating among themselves and others?
Ironically, China, a communist country with socialist and egalitarian aspirations currently has one of the world''s most unequal income distributions.
China has annual average urban income of ¥3,411 and rural income of ¥1,2442 (note the imbalance between rural and urban).
"We must set ourselves on a path so that one country, or group of countries, does not consume in excess while another set of countries produces in excess,"--Reuters, quoting Geithner--
"But Mr. Wen stressed the importance of confidence among world leaders, calling it "more valuable than gold" and said that hope was also important, like a "beacon.""--VOA quoting China''s Premier at Boao Forum--
"I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets,"--China''s Premier Wen Jiabao--
We''re a little concerned too—but, our Secretary of State likely has it about right—thanks for your directness—if there''s anything Paul Volcker has demonstrated a dislike for it''s inflation.
"He [Wen] said it has been proved by 30 years of Sino-U.S. relations that both will benefit from cooperation and both will be hurt by bitter fights."--Xinhua, reporting chat--
Hopefully, soon both Chinese and American leaders will be conducting unrestricted, uncensored routine reciprocal cross-culture online chats with the netizens of the others nation.
[America enabled] "...an excessive expansion of financial institutions in blind pursuit of profit, lack of self discipline among financial institutions and ratings agencies..."--China''s Politburo, Wen Jiabao--
Point taken—perhaps the illusion of profits is a better descriptor—the net profits and wealth remain to be studied and determined.
Only the speculators (cowboys) benefit from engaging in the harmful practices aimed at creating and profiting from artificial differential swings in the market, most recently from 12,000 to 8,000.
The rest of us benefit from sustainable stable linear growth, but then most of us aren''t walking the halls of Congress purchasing the enabling "cowboy policies" from members of Congress (it''s called corruption in China and everywhere else, we call it campaign contributions).
In fact if or when we all begin acting like the "cowboys" our system will no longer function and will collapse—in just eight years the "cowboys" have produced a warning disaster!
Hopefully, together we''ll study and learn from this warning and avoid triggering another.
1. China''s Yuan is pegged against a weighted composite of international currencies, but China''s domestic currency is the Renminbi (see Wikipedia, Currency Signs for other country''s currency symbols).
2. Loren Brandt and Thomas Rawski, China''s Great Economic Transformation, 2008 page 729 et seq. (Dwayne Benjamin, Loren Brandt et al. Income Inequality during China''s Economic Transition)—published in Loren Brandt and Thomas Rawski, China''s Economic Transformation, 2008
Figures are for 2001 data.
China''s 2008 HDI PPP GDP per capita based on 2006 U.S. dollars is $4,682.
3. UPDATED 03/17/2021 The SEC has recently release a report containing a series of notional histograms for the Security Based Swap known as a Credit Default Swap (CDS), which frequently insure a Collateral Debt Obligation (CDO).
There is an intense debate over what threshold should trigger swap dealer regulation—high threshold to exempt many dealers or a low threshold to exempt few dealers.
Hey Senator McConnell your partial mea culpa is ineffectual and disingenuous. You and your party have spent the past four plus years fomenting a fanciful insurrection instead of saying "enough"! Your party's platform and deviant behavior has exclaimed strongman, insurrection, deceit, duplicity and dictatorship. Forget the mea culpa. Immediately dissolve and replace your party!
There is a difference between corporate complexity and corruption. Yes, software is extraordinarily complex—software defeat devices✈ are corrupt. Boeing has been doing extraordinarily "complex" products, including software for decades, using talented engineers and risk analysis—not rent-seeking behavior or shameless calls by its chief executive officer.
