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PRC LESS CRITICAL OF US THAN MANY COUNTRIES; IT’S ALL ABOUT THE ALMIGHTY YUAN
JAN 14, 2005 - 3:56PM PDT
SHANTOU, GUANGDONG PROVINCE, CHINA
by Peter Herford

China, is an excellent example of the complexity of the American image abroad. U.S. China relations are intertwined at every level of politics, economics, and society and becoming more so daily. Let me put this in a factual context. China is now the seventh largest economy in the world. Within five years it is likely to be the fourth largest. China is already the third largest automobile market in the world behind the U.S. and Japan, having just passed Germany. But most important, and likely what you read about most is the debtor-creditor relationship between the U.S. and China. A vast imbalance that obscures an important fact. China has fallen into and out of international debt herself in the past few years. While the U.S. shortfall with China is expected to reach $ 57 billion in 2004, China's trade balance is expected to come in at only $ 3 billion. Why? That’s because China herself is a debtor in much of the world. Particularly in Asia. While many things in your home and the clothes on your back may say “Made in China,” all that manufacturing requires raw materials - materials that China has had to buy on the international market at rapidly inflating prices. As an example China's demand for oil this year has increased by 40%. She is the world's largest importer of scrap metal to make steel. (And most of that scrap metal comes from the U.S.) But the critical bottom line is that China has also become George Bush's banker. Every day, the Chinese and the Japanese combined buy 40% of the U.S. debt - American T bills. No single country - indeed, no two countries - even come close to these percentages. Without this daily flow of capital, the U.S. economy would suffer an instant economic earthquake. That one fact underlies much of the relationship between the two countries. For example, when President Chen Shui-bian of Taiwan was making aggressive noises toward China during his recent Presidential campaign, Beijing was very unhappy. Chairman Hu Jintao made a long-scheduled trip to the U.S. and sitting beside the President in the White House listened with a smile on his face while the U.S. President chastised the Taiwanese President and suggested that the rhetoric be toned down. You don't believe President Bush would have volunteered that on his own if his banker had suggested the script? We all recently saw how important China is to the U.S. when it comes to North Korea. The President's insistence on multi-lateral negotiations with the North Korean, led by the Chinese and Japanese, permits the administration to try to keep a lid on nuclear proliferation while fighting its battles in Afghanistan, Iraq, Israel and Palestine. And lest we forget, American troops are still stationed in the Balkans and will be needed in places like the Sudan. In short, the U.S. needs China's money and her clout. All this said what is the Chinese view of the U.S? China's position on Iraq is…... FULL TEXT
 
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