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The Public Diplomacy Blog is intended to stimulate dialog among scholars, researchers, practitioners and professionals from around the world in the public diplomacy sphere. The opinions represented here are the authors' own and do not necessarily reflect the views of the USC Center on Public Diplomacy at the Annenberg School.

HU JINTAO’S U.S. VISIT HIGHLIGHTS DEBT AND DIPLOMACY
JUN 20, 2006 - 6:51PM PDT
Posted by Peter Herford

Do you remember Hu Jintao's April 2006 visit to Washington, D.C? If you watched any of the news coverage on television you likely bring to mind the image of a Falun Gong protester and other odd faux pas. What received less attention were the circumstances surrounding the visit. The visit began weeks before the Chinese President and Party leader arrived. Chinese Vice Minister Wu Yi dropped in on the White House before the visit to be reassured that Washington supports the one-China policy of the mainland. Lest anyone have any illusions, "one-China policy" means that Taiwan is considered a province of the mainland; in no sense an independent entity of any kind. Why does every administration in recent memory dutifully reiterate this support? Given the fact that the United States is committed by treaty to defend Taiwan against attack, why would the defender agree with the notion that its client isn’t even a state? We have a saying in journalism: Follow the money. In this case follow the U.S. trade deficit and the overall U.S. indebtedness. There may be some of you old enough to remember when the late Senator Everett Dirksen (R-Ill.), carping about excessive government spending said: "A billion here, a billion there, sooner or later you're talking about real money." Since the senator's days the billions have turned into trillions. To help put the U.S. debt into focus consider the following statistics: This year's U.S. indebtedness is estimated to be 477 billion dollars. US public debt increases at the rate of 1.74 billion dollars per day. To personalize that figure, consider that the U.S. population (estimated to be 298 million people) splits up this debt by everyone owing 28 thousand dollars to a variety of creditors. Or go to the this website and you will find a clock unwinding to let you see the debt growing. I watched for a few seconds and then estimated that U.S. indebtedness is growing at about 20 thousand dollars every five seconds. What has all this got to do with China and Hu Jintao's visit to George Bush? Everything. China and Japan together daily buy 40% of the U.S. debt in the form of United States Treasury Bonds. There is little doubt that both countries could have been doing better until recently when the return on Treasuries increased, but diplomatic niceties and a globalized economy being what they are, Japan and China seem content to be primary lenders -- or looked at another way: Bankers -- to the United States. That was an important and little noted aspect of the Chinese President's visit to President Bush. President Bush's banker was paying a call. Those of you with debtor relationships with banks will understand that a visit from the banker is when you make nice. Therefore there was little surprise when Mr. Bush once again reiterated the US support for the "one China policy." The U.S. President generally has a slightly grim, or at best wan, look on his face when he…... FULL TEXT
 
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