Quasi-weekly China bash

As long as China keeps buying mountains of U.S. debt to support their currency peg, global imbalances will continue.

As long as global imbalances continue, it will be difficult for the U.S. to export its way out of recession, work off our current-account deficit, and avoid future speculative bubbles.

Some have postulated that alternative energy technology would be a great thing for us to export to China, given our advantage in technology. No such luck; China is very keen on protecting its alternative energy industry with every trade barrier in the book. Meanwhile, it is fighting strenuously against U.S. plans for a carbon tariff (i.e. the only thing that will make cap-and-trade have any net effect on global carbon emissions).

Essentially, China's policy goal is simple: export as much as possible to the U.S. while importing as little as possible from the U.S. This is called "mercantilism." It's not good for the world, and there's much argument about whether it's smart policy for a poor developing country.

But something (and yes, that something may be "paranoia") tells me that China's reasons for mercantilism have less to do with prosperity and more to do with the balance of power between it and the U.S.; if they hold all our debt and we have no manufacturing capacity, we can't oppose them geopolitically or militarily no matter what our headline GDP-per-capita number is or how many SUVs our consumers consume.

The question then becomes: Are our lawmakers willing to override the interests of those U.S. businesses who value their cheap China factories above all else, in order to stop China from pulling this kind of thing?


Unrelated Bonus China Bash: China is an empire in a way that the U.S. isn't; they exert military control over separatist territories populated mainly by ethnic minorities.