Showing posts with label China. Show all posts
Showing posts with label China. Show all posts

Monday, March 29, 2010

Empire of Bases or Baseless Empire?

The US has the most impressive array of bases in the history of the world. Yet there is growing reason to question whether the US can actually exercise power--get others to do what they want--through the empire of bases.

It is striking that even in Iraq and Afghanistan,countries where the US maintains a giant military presence and the political leadership perhaps could be described as US puppets, the US is increasingly seen as just one of several countries to deal with, by actors including that leadership ("Karzai has coolly defied the President Barack Obama's do-or-die diplomatic campaign to "isolate" Iran in the region - not once but twice during the past fortnight"). Controlling foreign policy is, after all, practically the first directive of empire. Whether you have direct or indirect rule, whether you regard the ruled as citizens of the empire or something else, all that may vary. But if a state is part of your empire, you must be 'the decider' as to who they are allying themselves with worldwide. Otherwise the concept of empire--real or de facto--is meaningless. In the New Left Review, Tariq Ali commented that China may be building pipelines and importing oil and gas from Afghanistan, but it remains dependent on US troops for protection. The concept should be turned around. Why would China complain if the US is picking up the tab and doing the dirty work of policing these resource routes. And what exactly is the US accomplishing if the oil and gas are heading east?


Sunday, March 28, 2010

Alternative Explanations for the US v. China currency confrontation

Could US bluster about the Chinese currency overvaluation be rooted in the frustrations of US multinationals? " A growing number of U.S. companies feel unwelcome in China, according to
a new survey by the American Chamber of Commerce in China...Negative
sentiment among Amcham's members, which traditionally have been a ...strong
lobby in Washington arguing for more engagement with China, adds to
wider risks in U.S.-China relations...." (quote is from the Wall Street Journal). Mike Whitney explains "
The multinationals see a "deteriorating investment environment" because of "rules on indigenous innovation." In other words, China's leaders want to strengthen their own industries and keep more of the profits for themselves (which is what governments are supposed to do.) The proposed rules will affect "dozens of products sold by foreign companies, including servers, mobile base stations, security and finance software, and wind-power generators." So, naturally, the multinationals are angry."

And what if China devalues, rather than revalues, the remimbi? Again, from Whitney: "China's economy is dangerously off-kilter and headed for a reckoning. The current rate of investment is over 50 per cent and rising. That's clearly unsustainable. By focusing on real estate and exports, China has failed to create strong domestic demand; personal consumption needs to increase and investment needs to slow. But that will take time, and now the situation is dire. If exports collapse because of a stronger currency, China might do "the unthinkable" (as Auerback suggests) and devalue the remnimbi which would further widen the trade deficits, exacerbate global imbalances, and increase the present rate of inflation. That would force Obama to step in and take decisive action whether he wants to or not. Perhaps a full-blown trade war is not so far fetched, after all."