The China Word

Both President Obama and Mitt Romney have spoken about getting tough with China over its’ unfair trade policies such as artificially undervaluing its’ currency the Yuan relative to the U.S. dollar, which gives it an unfair advantage in the dog eat dog global economy.

But I am forced to wonder whether such harsh rhetoric will actually lead to meaningful action when the heat of electoral politics has faded. I have my doubts.

Presidents can say whatever they want on the campaign trail, but Congress ultimately makes the laws in this country. It would be naïve to believe that there isn’t a pro-China lobby somewhere on Capitol Hill that is pressuring our legislators into not turning either candidates’ rhetoric into meaningful action.

 Sure, Congress may produce some watered down bill on trade with China, but it will be largely fangless out of fear of upsetting our great Chinese lender.

Rise of China: The Cyber Dragon

A recent cyber-attack on the gas industry in the United States may have the fingerprints of the China on it.

 Cyber-attacks have grown in prominence over recent years and will likely become an increased focus of national security experts in the coming years and decades.

The type of cyber-attack carried out against our gas industry would need the resources available to a national government. Though many governments may engage in cyber espionage, China has been particularly aggressive on the cyber front as articulated in Death by China by Peter W. Navarro and Greg Autry


China’s aggressive use of cyber-piracy coupled with their need to keep the vast engine of economic growth growing makes it a likely suspect.

 Cyber-crime is tricky by nature, however, because in cyberspace matters, governments have no real friends. Everyone spies on everyone else. The question is which entities serve to do us harm and which enemies are engaging in the practice of cyber-crime to give themselves a technological leg up?

 I don’t think China’s motives for engaging in cyber-crime are simply technological theft.

The Philippines and China go Bananas

The Philippines and China are engaged in a territorial dispute in the South China Sea, that has now spread to bananas. China blocked the import of Philippine bananas, after a Philippine naval ship attempted to arrest a group of Chinese fisherman working off the Scarborough Shoal.

The Philippines and China have competing claims on these islands and the Philippines see the blocking of imported bananas as a way of making them give in to China. Unfortunately, the strategy is quite sound because the Philippines is dependent on Chinese demand for its’ products.

 Source: http://www.csmonitor.com/World/Asia-Pacific/2012/0511/China-s-standoff-with-the-Philippines-heats-up-with-travel-warnings-oil-drilling

Another government verses government territorial dispute in Asia, great. The real losers here are the exporters and the farmers who grew the bananas because the fruits of their labor are rotting in containers or have been destroyed, meaning that they don’t get paid for having their hard toiled crop at market.

 This case is endemic of a problem that has infected this world. We have all these conflicts where two governments are wielding economic weapons against each other with no regard for who their really hurting.

Governments are by their nature, big and complex things that harder to hurt than sanctions regimes would lead one to believe. The farmers and laborers who produce the product may be a failed crop or economic blockade from ruins.

 But why should governments give a crap about people?

WTO: Ten Years with China

China has been a member of the World Trade Organization for ten years. Membership in the WTO has provided a great engine for Chinese economic growth, while China continues to skirt many WTO regulations.

China offers many advantages to nationalized companies that include: free land, low loans, cheap electricity, sneak peaks at government regulation, and bid rigging that make it hard for foreign companies to offer meaningful competition in China…foreign competitors claim.

Source: http://www.csmonitor.com/World/Asia-Pacific/2011/1214/How-WTO-membership-made-China-the-workshop-of-the-world

Piracy is a huge problem within China making any company who dares to do business there face a losing proposition because why buy the genuine article at full price when a pirated version can be had for a significant discount?

Membership in the WTO has been a boom for China, but at what cost to the international order of global trade? If global trade has a huge benefit for some countries, while being a money pit for others, can it really be called global trade or highway robbery?

International corporate types have made a bargain with the dragon for profit that will eventually prove to be a loser.

Techno Espionage and The Road East

CBS News ran a report tonight detailing a United States report that named Russia and China as the two most aggressive cyber espionage countries against the United States, stealing a variety of technological secrets ranging from military to our electrical grid.

 This isn’t really a new development, our power grids and military secrets have been of concern for many years. China and Russia are seeking to build their economies as quickly as possible. Why waste billions of dollars and time on the machinery of economic growth, when one can develop a team of cyber hackers and steal what you need?

The real question is: How do targeted governments deal with the problem? IT specialists may be able to offer more insights then I can on the technological aspects of the problem, but greater security systems are an absolute given.

 Overall though, we became a global power in part by using our minds to create and innovate things that were bigger and better than everyone else. To beat back the challenges of cyber criminals, we need to rediscover our innovative spirit to create bigger and better things.

Will China Save Europe?

In the midst of a European debt crisis, some European leaders are headed to China seeking its' help. But help from China, is unlikely to come at least on this trip.

Europe would like to see China show support for the European Financial Stability Facility (Europe's bailout fund), by buying European bonds. At present, China seems reluctant to do so because they are looking for stability before making a big financial commitment. Furthermore, China wants to be given market economic status and easing of Chinese exports, a move Europe seems less than enthusiastic about.

China is in the catbird seat here…conspiracy theories aside. China has large amounts of capital and Europe is desperate need. China mustn’t use this moment to gloat over their good fortune and Europe’s troubles because China’s economic success is not so great that it cannot go awry at a moments notice.

It’s actually in China’s interest that Europe remains viable as a trading partner. My guess is that China will provide some assistance, when Europe stops playing the house of cards that is about to topple. The real question for China is: When do you step in, and under what terms?