The Other China Syndrome
[col. writ. 11/21/09] (c) '09 Mumia Abu-Jamal
We are all taught to think about things like economics, as things to be placed in boxes, like mail is sorted at the post office.
This goes in this box; that goes in that box.
But economics is such that it goes into every box -- and every box leaks into it.
It's not just a matter of dollars and cents; it's actually a matter of pesos, rupees, euros and yen.
And it's also a matter of foreign affairs, of international relations, of wealth and power.
If we ever questioned this notion, we need only look at America abroad, especially the recent visit of President Barack Obama to China. Traditionally, U.S. presidents go abroad to engage in bouts of global bullying, to bark or lecture host governments about the terms of their relationship (think of U.S. politicians in Afghanistan, for example).
Not so in China today, where Obama neither barked nor bellowed.
That's because China is different. China holds almost a trillion bucks worth of U.S. debt. If they called it in, the lights would go out from Maine to New Mexico.
Now, they won't do it because it'll cause chaos in China; but they could.
According to a recent article in Foreign Affairs, China's financial reserves makes it the world's wealthiest country!*
That doesn't mean they have the most money, but the most unencumbered money, and the freest available resources. They can therefore choose where to use those resources.
China is America's banker. And with its economy growing at about 8% annually, that relationship can only expand.
China is propping up the U.S. economy, had has been doing so for years. Their purchase of U.S. stocks and bonds has buffered the domestic effects of the recent recession, by preventing the fall from becoming even worse. In fact, they may have prevented a depression.
If you want more money, you don't bark at your banker.
You talk to her with quiet respect.
-(c) '09 maj
[Source: *Altman, Roger, : Globalization in Retreat: "Further Geopolitical Consequences of the Financial Crisis", Foreign Affairs, (Jul/Aug '09), p.3.]