China And The U$

[Craig Read]

Conventional wisdom - ie. manipulated left liberal media opionion which always backs up the hacks and flacks in society, in this case protectionists and union members - states that China's currency is unfairly valued, that China is the US' enemy and that protectionism and anti-Chinese posturing is needed.

Hooey on all acounts.

On the currency issue, China needs a stable currency. It really needs banking and capital control reforms not a floating [ie. descending] currency. Greenspan says it best,

American manufacturers contend that China’s currency practices have kept the currency undervalued by as much as 40 percent, giving the country a huge trade advantage that is reflected in the record U.S. trade deficits with China which hit $103 billion last year and is expected to top $120 billion this year.

       Greenspan said that if China did allow the value of its currency to float and the currency rose in value, as U.S. manufacturers expect, it might cut Chinese exports of such goods as textiles to the United States. But he said rather than boosting production of textiles in the United States, it was “far more likely” that U.S. imports from other low-wage countries in Asia would simply replace the Chinese textiles.

       In addition, Greenspan cautioned that allowing the Chinese currency’s value to be set by market forces could threaten to destabilize the Chinese economy as the country relaxes its controls on capital flows as part of a changed currency regime.

Right on. Let other reforms go ahead first before you free float the currency.

On the political level - China is not an enemy - not if you approach China maturely. They are certainly needed to defang North Korea and act as a 'buffer' with an unstable and undemocratic Russia.

Watch for Bush to renounce the longstanding US policy of unbridled support for Taiwan.

Let China grow and let it mature.

[Neal.F.]

Gopod post Craig. Like it or not China is a major power, and is here to stay.

I want to speak to the issue of Taiwan. For those who are not aware, Taiwan has never been an independent country. It's official name is "Republic of China" . this comes from the time in 1949, when Chiang Kai-Shek and his Guomindang (Nationalist) Party rule was driven out of Mainland China by the Communists. They took refuge on Taiwan, and declared themselves the legitimate government of ALL China. Therefore it must be understood that Chiang kai-Shek and Guomindang never declared independence, therefore in their view, as in the view of the Communist government in Mainland china, Taiwan was a province of China. Then in teh 1970's the United States, United nations and most other countries decided to recognize the Communist regime in Beijing as the legitimate government of China, so taiwan became a unique case in the world, where it had no diplomatioc recognition, but was a de-facto independent country. For example, canada and many other countries have a Tarde office in Taipei, which is really an Embassy in all but name.

This situation would probably be allowed to continue indefinitely, but in the late '90s, Guomindang under tremendous pressure, lost its one-party rule, and was eventually voted out of office by a younger generation of Taiwanese who feel no affinity toward China, and want to establish their own nationhood in Taiwan, ie: No more Republic of China, but rather a republic of Taiwan.

CHina cannot tolerate this, as it is a matter of losing face, as a renegade province thumbs its nose and declares independence. This is intolerable to a superpower.

Had Chiang Kai-Shek immediately declared independence in 1949, instead of foolishly believing he would be restored to power on the mainland, this probably would never have become an issue.

What must happen now, is that George Bush must now inform the new President of Taiwan, that if they want to have contytinued US support, they must leave well-enough alone, and continue the charade of the last 50 years. The referendum on idependence must be stopped, NOW.

China WILL invade if there is a declaration of independence. CHina is not a single ethnic monolith, and cannot tolerate one province breaking away. If Taiwan goes, then on what grounds can they claim continued sovereignty over Tibet? Manchuria? Inner Mongolia?

China will not want to lose "face" in the world, so they cannot stand idle in this instance.

The young Taiwanese who support independence had really better take a long hard look at the costs involved. Not only in terms of lives, but also standard of living. At this point, Taiwan enjoys one of the highest standrds of living in the world. Do they want to see that change by actually being absorbed into China? They should also remember where alot of that wealth comes from: It so happens that the largest investor in the Chinese economy is Taiwan. In other words, they are making money hand over fist under the current arrangement.

Is losing all that worth exchanging "trade offices" for Embassies and ambassdors? for a seat at the UN? Those are just trappings. and what bloody good are they, at the sacrice of one of the soundest economies in the world, and one of the freest places in which to live?

Union with China one day is pretty much inevitable. This situatioin could continue for another 50-100 years, and by that time, China will hopefully have matured into a relatively free country, with an economy that will mesh well with Taiwan's.

[righturnonred]

Gentlemen, I have disagreements on China.

China's currency is unfairly valued

Regardless of whether Greenspan thinks its justified or not, the fact remains that China's currency is unfairly valued for the purpose of lowering the price of Chinese goods on the international market. You can't tell me that the US should just simply turn a blind eye to this tremendous advantage.

Greenspan says that other low-wage countries in Asia would fill the gap - then so be it, those countries are playing fairly and deserve a larger piece of US markets.

I mostly agree with Neal on the status of Taiwan. While I am certainly an advocate of the "Status Quo", I think there are convincing arguments to justify Taiwanese independence. Specifically, the sovereignty of Taiwan after it's secession by Japan after the conclusion of WWII is highly disputable.

China ceded the island of Taiwan to Japan at the end of the first Sino-Japanese War. In the Cairo Conference of 1943, the allied powers agreed to have Japan cede Taiwan to the Republic of China upon Japan's surrender. According to both the People's Republic of China and the Republic of China, this agreement was given legal force by the instrument of surrender of Japan in 1945.

Advocates of Taiwan independence argue that because the Instrument of Surrender of Japan made no mention of the Cairo Conference, it did not transfer title of Taiwan and that when Japan renounced sovereignty of Taiwan in the Treaty of San Francisco in 1951, the sovereignty of Taiwan returned to the people of Taiwan according to the UN charter on self determination.

The legal status of Taiwan is certainly disputable and is not set in stone.

Legal status aside, The PRC didn't really give a hoot about Taiwan until economic and political reforms in that "renegade province" transformed it into one the most powerful industrial and technological giants in the region. Now that Taiwan is perceived as valuable, the PRC is suddenly strongly committed to the "One China" policy.

For all intensive purposes, as Neal said, Taiwan is basically a independent state. Her achievements were accomplished without interference or assistance

from the mainland. Therefore, it seems to me, from a moral standpoint, that the people of Taiwan have a legitmate justification and desire to protect what they've built there, specifically a free and prosperous democracy.

With all that said, let's look at the political realities:

Reunification is inevitable as China is becoming a regional superpower. Bush is right to warn the Taiwanese from taking further steps towards independence. A conflict with China over Taiwan is simply not worth the cost.

On the political level - China is not an enemy - not if you approach China maturely. They are certainly needed to defang North Korea and act as a 'buffer' with an unstable and undemocratic Russia.

Craig, I don't know how you come to the apparent conclusion that China harbors no animosity towards the United States and simply wishes to prosper along side us. The sheer amount of evidence just doesn't support you here.

Any poltical or economic cooperation with the United States on the part of China is conducted under the guise of achiveing regional and global domination, in place of the United States. Regardless of how many economic reforms are enacted, political control will never be wrested from those who hold it now.

Do freindly nations conspire to steal our most vaunted nuclear secrects? Do freindly nations develop military technologies designed specifically to nutralize American forces? Do freindly nations intercept and threaten our unarmed surveillance aircraft (operating in international airspace)? Do freindly nations publish nuclear threats against the United States in state run media? Do the militaries of freindly nations attempt to influence our political elections through illegal campaign donations? Do freindly nations help rouge states (Iraq) build improved air defenses in order to shoot down American aircraft?

You're going to have to provide more proof to convince me of China's unabridged ambivalence towards the United States.