FriendFoe by amazon.com
Talk about a conflicted, convoluted national agenda; that's how best to describe America's economic and foreign policy relationship with China. On the one hand China is the great friend and economic partner of Corporate America but, on the other, it is seen as a rising economic and military threat to America's supremacy.
*China: great friend and close associate of Corporate America
The relationship between these two close economic partners, the major corporations of this country and China, is exemplary, it could hardly be better. China has become America's prime, very dependable manufacturer of consumer products, it has been given open access to the vast American market and, as a result, it employs millions of Chinese workers and its economy continues to prosper.
Corporate America loves this relationship; it has a very reliable source for manufactured products at extremely low labor costs. These corporations no longer have to maintain costly production facilities in this country and they don't have to deal with American workers and their unions for whom they have no use. As a result their profits are soaring and the lives of corporate CEO's and managers could not be better.
*China: Threat to American supremacy, designated enemy of the U.S. government
That was the positive side of this relationship. Now let's take a look at the other side that presents a negative, adversarial relationship between the government of China and that of the U.S. While America benefits greatly from China's manufacturing and from its continued ongoing purchase of billions of dollars of U.S. securities, the U.S. government also considers China to be a distinct threat to its position as the world's #1 economic and military power.
The U.S. government, because of its great concerns of China eventually challenging its military domination in the world, has recently taken steps to substantially increase its military presence in the Asia-Pacific region; it wants to, in effect, box in China and negate its established regional power and influence. This is yet another hubristic move by the Washington war hawks that think that the solution to every problem is military power. The U.S. so-called "pivot" in that region might be better described as its latest "reckless lurch."
*A theory: perhaps something much deeper and more complex is involved
Sometimes things are not what they seem to be. When one really looks deeply into this, complex, convoluted situation, what we could have here is a classic example of the good cop/bad cop technique. In this relationship with China which is both bad and good the U.S. government is playing the bad cop as it uses aggressive military measures to try to intimidate China. But then the good cop, Corporate America, enters in to ease the tensions by continuing to pursue a close, mutually beneficial relationship with China.
What we may have in these seemingly contradictory attitudes and actions toward China may, in reality, be a very clever plan whereby corporations and the government are actually working together to achieve the same end result. Suppose the plan involves cementing China's position as America's major manufacturing source so that corporations are guaranteed the lowest possible labor rates and massive corporate profits for many decades to come.
And, further, that the real objective of the government/military is not to go to war with China but to intimidate it so that Chinese leaders realize that their best interests lie in economic benefits rather than confronting America militarily. If this is really the plan, and Corporate America and the U.S. government can pull it off, this would be the best of all worlds; an infinite supply of cheap labor, great corporate profits and a partner in China who, because of a desire to remain the major supplier to the world's largest market, would pose no threat; one that would maintain a passive, submissive role -- it might even become a kind of American manufacturing colony.
That may be the plan but the reality of the situation is that this kind of pacification program will not work because China will not allow itself to become subservient to America in any way. While America has plans to turn China into a toothless tiger, China has it own plans on how to deal with the increasing danger that it believes that the U.S. poses. The leaders of China know that to try to go up against this powerful military force is not the answer; they also know that America's greatest vulnerability lies with its economic instability and that's where I'd venture to say they will concentrate their efforts.
At the same time the U.S. is building up its military presence in the Asia-Pacific region China is attempting to establish a presence of its own right in America's backyard; Check out this article that reports on the current secret negotiations taking place in Mexico that involve possible crude oil sales to China. If and when this trade agreement is concluded, China will pay for these oil purchases with its own currency, the Yuan, to the total exclusion of the U.S. dollar. Should that deal be finalized it would be an astounding development and further proof that China is definitely planning to bring about the demise of the dollar as the world's reserve currency.
It's no longer news that China, Russia, Iran and numerous other countries are taking steps to conduct reciprocal trade in their own currencies and, if that trend continues, and is significantly increased, the days of the dollar as the primary vehicle in conducting world trade will be coming to an end.
China knows, as do many very knowledgeable economists, that if the dollar's position as the world's reserve currency is severely impacted the effect on America could be quite devastating; that such a monumental financial blow would shake the pillars of this nation and will have an extremely detrimental effect on the lives of every American.
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