When we start looking at the political posturing around the world, we see world leaders and their advisors making serious mistakes. The President of China made a huge mistake when he condemned the United States of America at the Davos World Economic Forum. Now, it is true that there were many people upset with the Credit Default Swaps, and to the Mortgage Bundles that helped bring down the global economy.
Still, the president of China owes the United States a great sense of gratitude. If it were not for the US middle class consumer, China could not have experienced the 10% GDP growth year-over-year that they have for the last two decades. In fact, China would not have the third of fourth largest GDP of any nation on this planet if it weren’t for the United States buying all of their exports.
With the United States in recession, China has noted that their exports have fallen over 35% by their estimates, although global economic analysts, and even the factors considered when reporting the Baltic index show it to be more like 50%.
Meanwhile, China has claimed that they have achieved 7 to 8% growth in 2009; that simply isn’t so, they are making up numbers, but since they own the media, they can control what is said. But you can’t fool all the investors all of the time, and a 25% hit in the Shanghai index shows a completely different story.
Did the Chinese president shoot himself in the foot by condemning US monetary policy at both the Davos World Economic Forum and the BRIC Conference? If you will recall at the Brazil-Russia-India-China meeting, the Chinese president stood with the leaders of those other nations and suggested that perhaps, we need a different global currency than the US dollar.
That is completely outrageous, as if the Russian Ruble, or the Chinese Yuan could be a replacement currency, and even if they knew currency was created, who in the WTO would trust using it, not me. If China is upset with US monetary policy, then perhaps China should change some of its policies for free trade, and the way it float currency.
China has taken advantage of the United States trading policies and caused problems for their greatest trading partner. If anyone is to be blamed for what has happened, it really would be China. If the Chinese do not stop talking trash about the United States, then the US consumer will turn on China and boycott all of their products.
Nothing could be worse for the future of China that, because if those peasants don’t get some work soon they are going to starve, then they will riot, and then they will overthrow the government of China. Historically that’s what happens, and just because we live in the 21st century does not mean it cannot happen today.
The United States and China are friends, and the Chinese government needs to start acting as if it is a friend. That is if they want to continue their GDP growth and ever reach Super World Power Status. Please consider all this. Not long ago, I mentioned this to Guang Wu, the author of a new book; “China: Has the Last Opportunity Passed by!?” and he said there are many challenges that lie ahead for their great nation, and nothing was set in stone, and all issues should be discussed.
Tags: 21st Century, currency, economic, economy, government, monetary, monetary policy, Mortgage, trading