Thomas P.M. Barnett :: Weblog

"... they give us trouble on dollar but we deny them a sales market they cannot live without ..."

They are being really, really stupid to make open threats against the United States. Many people here respond to that with immediate anger. Many people here do not like "Red China" to start off with, who don't like our workers competing with a workforce working with no safety or health protections at all. There is a large and diverse constituency in this country that would like to dismantle the bilateral US-China economic relationship for all kinds of reasons. There are competitors of China who would like to replace them in whole and in part as our suppliers. The Chinese need us more than we need them. Cutting them off, and replacing the source of supply from other places would be hard and expensive, and would lead to a global recession. But if they want to threaten to bring on a global recession, they should understand that our regime will survive, but theirs may not.

Very, very foolish conduct by the Chinese. Brings out my Jacksonian streak, the part of me that says the response to any threat or ultimatum is: "F***you. Do it. Do your worst. We will see who is standing when this is over. It won't be you." I am not unique in this kind of visceral response.

They know nothing about us. They are playing with fire.

So you shut out Chinese imports, business sets up shop in India, you shut out Indian imports, business moves to Africa, you shut out African imports etc. How will they react? By effectively shutting American exports out of the worlds fastest growing markets.

I like the concept of financial interdependence as a 21st century MAD. But MAD worked because we had 2 cities and a couple dozen large craters in the desert that made it clear to everyone what a nuclear war would look like. My fear is that too many policy makers both in the U.S. and China simply do not understand what a "trade war" or a "currency war" would do to the global economy. Hopefully, "get tough on China" will just turn out to be silly campaign bluster, otherwise both the U.S. and China mind as well apply for E.U. membership, so that we'll be able to hang out with all the other has-been superpowers.

It is all crazy talk, when rationally examined. That's why the references to MAD work so well: you get your gumption up and want to pull a trigger or two, but it's just nuts--and you know it.

I'm not surprised by this sort of language out of China. We've been saying many provocative things for so long--despite being so much further down the road. So what do we expect from a China whose maturity level equates to roughly 1890 America?

We're supposed to be the adults in this relationship, and instead we're stuck with a bunch of Boomer politicians forever stuck in their youth.

It remains--in the political realm--largely a dialogue of the deaf--and dumb.

The lower the value of the dollar, the less stuff we can buy from overseas-- aka, from them. Also, the cheaper we can sell our own stuff overseas. Combined with the hurt put on some of China's OTHER partners who's sales would also suffer, and this is not a smart move on their part. Not that we come out smelling like roses, either. Here's hoping someone in the White House has an adult moment over this.

Norman Angel predicted that there would be no war between the European powers in the early 20th century because England and Germany were each other's major trading partners and a war would be disasterous for everybody. Well, it turned out that Norman Angel underestimated the ability of human beings to do stupid things that are contrary to their best interests.

With nukes in the equation, we and the Chinese probably won't get to the point of shooting at each other, no mater who is in charge of either country but that doesn't mean that a modern day Senator Smoot won't upset the economic apple cart in order to pander to a domestic constituency.

And with Gen X candidate Barak Obama making the most inflamitory and stupid statements that I have heard any serious Presidential candidate make in a real long time, I think that we can be confidant that dangerous stupidity is not a monopoly of Boomer politicians.

This story comes off to me as just another threat, but also a statement - it is unsurprising and is the sort of rhetoric we will have to get used to from Beijing in the near-term. Of course they won't sell off their dollars, but it's important to point out that many other countries have already done just that - China wants some credit here for helping us out!

We have plenty of cards in our hand too - China needs Iraqi oil, and selling off the dollar removes some incentive to try to make it work over there. China will not have any fun sucking oil out of a raging civil war. But if they're going to continue to play nice and keep buying our dollars, we may be willing to cooperate on a number of issues...

I feel this 'story' will be oft-repeated every couple of months - it's important to remember that nothing happens in a vacuum.

Lexington Green,

Aside from using this event to make it all about you and the art of braggadocio. Have you considered how restrained the Chinese rhetoric up until now have been and how much and how long's been the threats from U.S. politicians?

grow up! Or at least be fair.

Shooting yourself in the foot is one thing. Stomping on a live land mine is quite another.

As far as generations go, remember that China has only just begun to pass authority to ITS "Boomer" generation. I haven't seen much analysis here of their perspective on life, the universe, and everything. How 'bout it, Thomas?