US-China Talks Cover Cyber Issues, Currency, Chinese Reform

[News_Editor]

US President Barack Obama, right, meets with China’s then Vice President Xi Jinping, second left, in the Oval Office of the White House in Washington on Feb. 14, 2012. (Photo: Reuters )

WASHINGTON — US officials appealed to China’s self-interest on Wednesday with calls for deeper economic reforms including changes to the exchange rate policy and a halt to cyber theft of trade secrets – actions they said would benefit both nations.

Vice President Joe Biden launched the annual US-China Strategic and Economic Dialogue by stressing the shared stakes and responsibility to support the global economy.

“The next steps that China needs to take for its own economy happen to be in the interests of the United States as well,†he said as the two-day talks opened in Washington.

“Your own plans call for the kinds of changes that have to take place, that are difficult, like here, but if they do, they will benefit us both, including free exchange rate, shifting to a consumption-led economy, enforcing intellectual property rights and renewing innovation,†said Biden.

But Biden did not mince words when he raised the hot-button issue of theft of intellectual property through hacking of computer networks, a conversation complicated by the fugitive spy agency contractor Edward Snowden’s revelations of US electronic surveillance around the world.

“Outright cyber-enabling theft that US companies are experiencing now must be viewed as out of bounds and needs to stop,†said Biden. US officials say all countries spy on each other, but China is unique in its theft of foreign technology.

Deputy Secretary of State Bill Burns and Treasury Secretary Jack Lew are hosting a Chinese delegation led by State Councilor Yang Jiechi and Vice Premier Wang Yang for annual talks that cover both economics and wider geopolitical issues.

Burns filled in for Secretary of State John Kerry, who left the meetings Wednesday to care for his ailing wife.

The talks were launched in 2008 with aim of managing an increasingly complex US-China relationship and avoiding competition between the world’s two largest economies from turning into destabilizing conflict.

US SEEKS LEVEL PLAYING FIELD

Wang’s remarks to open the forum highlighted China’s desire – voiced by Chinese President Xi Jinping last month in a summit with President Barack Obama – to forge a new relationship.

“Our job in this round … is to turn the important agreements between the two presidents into tangible outcomes, and add substance to this new model of major country relationship,†he said.

Lew welcomed reform plans circulating in China under the new administration of Xi, who took office in March.

However, Lew also aired a list of American complaints about Chinese policies that a watchful US Congress has pressed the Obama administration to tackle.

The United States seeks “an economic relationship where our firms and workers operate on a level playing field and where the rights of those who participate in the global economy – including innovators and the holders of intellectual property – are preserved and protected from government-sponsored cyber intrusion,†said Lew.

China denies being behind the hacking and insists it is a major victim of cyber attacks, including from the United States – an argument that Beijing sees as strengthened by Snowden’s revelations. The two countries held talks focused on cyber issues on Monday and discussed the issue again on Tuesday and Wednesday.

“We were exceptionally clear … that there is a vast distinction between intelligence-gathering activities that all countries do and the theft of intellectual property for the benefit of businesses,†said a senior US official.

“We were very frank with them that you cannot mix apples and oranges in this case,†added a second official.

US businesses also complain about policies that require foreigners to transfer technology to China to gain access to the market, barriers to farm goods, and financial and regulatory favoritism to China’s state-owned companies.

When the meeting split into separate strategic and economic talks, Lew again stressed the importance of reforms – including to the exchange rate – to shift China’s economy from reliance on investment and exports to growth driven by consumption.

“Exchange rate reform is an essential part of this process because it will boost the purchasing power of Chinese households,†he told senior US and Chinese officials.

“The transition will not be easy. But as long as it is delayed, risks in the system continue to build,†added Lew.

In response, Wang said, “I think it will take us at least 5 years to resolve those issues and reach consensus.â€

Wang said China had learned much from listening to other views as it modernized its economy since the 1970s. But there were limits to China’s tolerance of criticism, he said.

“Like the United States, we will never accept views, however presented, that undermine our basic system or national interests,†Wang said.

China was expected to air concerns of its own about US policy, including Beijing’s demand that Washington ease Cold War-era controls on high technology exports and clarify the approval process for Chinese acquisitions of American companies.

Across the US capital lawmakers showed their ambivalence about Chinese investment, questioning the head of Smithfield Foods over the proposed sale of the Virginia ham maker to China’s largest pork producer.

Source: Irrawaddy.org

[Publicus]

What Snowden and PRISM Mean to US-China Cyber Politics

http://www.chinausfocus.com/peace-security/what-snowden-and-prism-mean-to-us-china-cyber-politics/

Setting aside principle, there is a matter of how the leaks impact the broader geopolitics of cyberspace. Particularly important is the time and location of Edward Snowden choosing to announce his identity as the leaker to the world via his press contact, Glenn Greenwald. That Snowden, a U.S. government contractor working in the Intelligence Community, turned up in Hong Kong, was an incredibly interesting development. Why Hong Kong? Why the day after the Obama-Xi summit? Fine questions. Since Snowden’s outing himself as the leaker, there have been more leaks and on June 21, the U.S. government allegedly filed a sealed criminal complaint in the Eastern District of Virginia. Where and how the Snowden story will end is anyone’s guess.

The government of the Hong Kong Special Autonomous Region (HKSAR) has avoided a protracted diplomatic conflict in allowing Snowden to leave, no doubt annoying the U.S. in the process. Of the larger discussion on the U.S.-China bilateral position on cyber issues, the leaks regarding NSA operations make it more difficult for the United States government as a trustworthy steward in cyberspace. In the run-up to the Obama-Xi summit, the U.S. government made a concerted effort on the issue of Chinese government-sponsored cyber espionage. That discussion was set back enormously by timing and content of Snowden’s leaks.

China’s Premature Great Power Label

By Sir Malcolm Rifkind

http://thediplomat.com/2010/10/28/china%e2%80%99s-premature-great-power-label/

China’s past performance is not necessarily indicative of future results, says former British Foreign Secretary Malcolm Rifkind.

Even just a decade ago, the impact of ‘China’s rise’ used to be spoken of in the long term. Yet those days are already behind us.

The Long and the Short of China’s Credit Crunch

http://www.theepochtimes.com/n3/142435-the-long-and-the-short-of-chinas-credit-crunch/

Edited July 12, 2013 by Publicus

[mania]

That really is a great picture

Edited July 13, 2013 by Scott

[Publicus]

China agrees to currency, procurement reforms in talks with U.S

https://socialreader.com/me/content/L8vUf?chid=33339&utm_medium=Widgets&utm_source=fp&utm_campaign=TopicPWForeignPolicyStandardLarge&_monetaVisitor=eyJwIjoiZnAiLCJ2IjoiYTA0YWFkMGQtY2RjYi00MGMxLTg4MjUtYmY4Mzg4NjdiNTA2In0-

China acknowledged U.S. concerns about cyber theft of intellectual property and trade secrets and agreed to steps that would open its financial and government procurement markets, the U.S. Treasury Department said on Friday.

In a statement on outcomes of the annual U.S.-China Strategic & Economic Dialogue that concluded Thursday in Washington, the Treasury Department also said China had committed to move to a market-determined exchange rate for its yuan currency.

"During the S&ED, Chinese officials acknowledged U.S. concerns over the growing problem of the cyber-enabled theft of trade secrets and business confidential information," the statement said.

"China pledged to better protect against trade secret misappropriation through strengthened enforcement," it added, referring to an issue that Washington has made a top priority with China as U.S. economic losses from intellectual property theft mounted.

Previous U.S. efforts to get Beijing to address the issue of hacking into American networks to steal intellectual property had met denials and a tendency by China to conflate cyber espionage with cyber-enabled trade secret theft.

Fugitive spy agency contractor Edward Snowden's disclosure of U.S. surveillance programs compounded the difficult for Washington in raising the issue.

Aiding and Abetting Why are the United States and Japan still giving tens of millions of dollars in aid to China?

http://www.foreignpolicy.com/articles/2013/07/12/why_does_us_still_give_millions_of_dollars_to_china?page=full

The stories, facts, and figures that show how global wealth and influence is shifting from the Western world and Japan to China and other developing nations are widely known. What most people overlook, however, is that the United States and Japan -- China's two largest trading partners, and its most significant geopolitical rivals -- still provide China with tens of millions of dollars annually in aid and assistance.

The United States provided $28.3 million in foreign assistance and funding programs to China via USAID and the State Department in 2012, according to a May report from the Congressional Research Service. It projects that number to decrease slightly in 2013, to $25.5 million.

Roughly half of the U.S. funding is administered by the U.S. Agency for International Development (USAID), which focuses on four main areas in China: environmental protection, rule of law, HIV/AIDS, and sustainable development for Tibetans. "I believe that our foreign aid to China furthers U.S. interests," said Sen. Ben Cardin (D-MD), who chairs the East Asian and Pacific Affairs Subcommitttee of the Foreign Relations Committee, in a phone interview.

But a USAID official, who asked to speak on background, took issue with calling the assistance to China "aid." "We are using some assistance to do technical cooperation in a few key areas, which are narrow and defined in scope," the official said. It's "directed" assistance, the official added, noting that these programs were not controversial.

New Developments Threaten To Burst China's Staggering Housing Bubble

Read more: http://soberlook.com/2013/06/new-threats-to-chinas-property-bubble.html#ixzz2XqPoT5SY

Societe Generale's Wei Yao like other experts believes that policymakers are willing to stomach short term pain for stable long-term economic growth. Bottom-line: A credit burst is painful and inevitable:

"In our view, there is no other ending to China’s massive credit misallocation than a painful burst. The question is when will it start unwinding and at what pace. Given the control that Beijing has over the economy and financial system, the answer lies more with the political willingness and/or policy (mis-)calculation, at least at the beginning of the process.

[Publicus]

17 Reasons Why Experts Are Convinced China's Economy Is Doomed

Read more: http://www.businessinsider.com/scary-china-charts-2013-7?op=1#ixzz2ZFQe3Bph

Economists and investors around the world are finally getting used to the idea that China's years of blazing hot growth are a thing of the past.

While GDP will continue to be above average for years to come, China's policymakers are pushing reforms to cool its housing market, legitimize its financial system, reduce corruption, and rebalance its economy as one driven consumption, not exports.

However, the cost of all of these efforts is slower growth. And with public and private financial liabilities sky-high, more and more experts are worried that China will experience a hard landing, a scenario where the economy decelerates to roughly less than 5% causing unemployment to spike and social unrest to sweep the cities.

[boomerangutang]

One of the biggest ironies in the Snowden thing, is the US doesn't abuse internet snooping near as much as the Chinese do. Both the Chinese Premier and Obama know it, but it was the US which got its pants split (by Snowden's antics), and that's why the Chinese head honcho is grinning in the photo.

[Publicus]

The US seems now to be always onto the latest and the most extensive CCP-PRC cyber spying and cyber warfare techniques, strategies, efforts.

Chinese Hackers Dropbox Their Viruses

http://www.theepochtimes.com/n3/182688-chinese-hackers-dropbox-their-viruses/

Disguised as government papers, viruses sent by Chinese hackers have been making their rounds through Dropbox, a popular cloud-based Internet service that allows users to share files, in a new method detailed in a cyber security report published last week.

Hackers have grown more creative with their methods now that security teams are concentrating on weeding them out. The attacks are the work of DNS Calc, a Chinese hacker group that uses techniques similar to those of Comment Crew, the Chinese group behind the attack on the New York Times last year, says Cyber Squared, a security company based in Arlington, Virginia.

As the first step in their scheme, Chinese hackers signed up for Dropbox, uploaded the malware and sent an email invitation linking to it to their targets.

Using this technique, hackers were able to maintain anonymity, draw targets in with the credibility of the Dropbox brand, and avoid traditional anti-virus detection.

[Publicus]

What makes the West so insecure about itself and so certain the CCP-PRC will either rule or dominate the world?

The CCP's economy is structurally wrong through and through. The CCP is a fascist dictatorship that is repressing its youngest generation who want government with direct accountability. After four years in the CCP-PRC, I can easily say the PRChinese themselves are insecure, uncertain, worried about their future and the reality of the economy and financial system they have, i.e., the state owns and runs practically everything. The population know the CCP is the Chinese Corruption Party through and through, cares nothing about the people themselves.

The CCP's economy is a huge property and bank credit bubble which is going to burst this year or next, which will crash the whole of the economy and the financial system - the crash in the U.S. in 2008 will look like a minor blip compared to how devastating to the PRChinese and the CCP the crash will be when the bubbles pop. Down will come baby, cradle and all.

People globally just don't know the realities concerning the CCP-PRC. They will find out however, soon enough, which will bring the world to the reality they are oblivious to or about.

The Developing World Is Not Sold On China’s Rise

http://thediplomat.com/china-power/the-developing-world-is-not-sold-on-chinas-rise/

The Pew Research Global Attitudes Project released an impressive survey of worldwide opinion of China and the U.S, based on interviews of 37,653 people in 39 countries between March and May this year.

Although the poll deserves to be read in full, some of its major conclusions, which have been reported elsewhere, include

:

1. The majority of people now think China will overtake the U.S. as the world’s superpower.

2. Generally speaking, China’s rise in power has not made it any more popular.

3. People (particularly non-Muslims) are still more favorable to the U.S. than China, more likely to see Washington as a partner and less likely to see it as an enemy.

However, one of the survey's most interesting findings, in my opinion, was how much the West and "developed" world took China’s rise for granted compared with the "developing" nations.

For example, in Canada and Europe, only in Italy did less than a majority (48 percent) of respondents say that China is or will eventually become the world’s leading superpower.

Among developed Asia, only in Japan did less than 50 percent of the population (24 percent) believe China was or will be the world’s leading superpower. By contrast, 67 percent of Australians and 56 percent of South Koreans believed that China would overtake the U.S.

However, the Middle East and Arab world is practically a mirror image of the industrialized world, with Palestine being the only country included in the survey where a majority (56 percent) of respondents felt China was or will become the world’s leading state. On the other end of the scale, only 37 percent of Egyptians and 36 percent of Turks felt the same way.

Similarly, in non-developed Asia (excluding China), a slight majority of Pakistanis (51 percent) felt that Beijing would surely become the world’s leading superpower; only 39 percent of Indonesians, 30 percent Malaysians, and 22 percent Filipinos felt China’s rise was inevitable (the Philippines was the lowest number in the entire survey on this question).

[Publicus]

When the CCP-PRC economy slows to the point there aren't enough spoils for the Chinese Corruption Party to apportion among itself, then the knives will come out. The reformers and the Maoists will slug it out, never mind the people of the PRC.

Meanwhile, once the sheeple transform into economically hurting and jobless unemployed, they will become the angry people, as in urban mobs.

The whole thing is headed full speed toward an ever nearing brick wall.

How Much Slowdown Can Beijing Tolerate?

http://thediplomat.com/2013/07/22/how-much-slowdown-can-beijing-tolerate/

By Minxin Pei

The once-mighty Chinese economy is now headed in one direction only – downward.

GDP growth was 7.5 percent in the second quarter of this year, down slightly from 7.7 percent in the first quarter.

In the last quarter of 2012, the Chinese economy grew 7.9 percent. The deceleration from 7.9 to 7.5 percent may seem relatively minor – only 0.4 percentage point in six months. However, when annualized, this figure means that the Chinese economy has lost about one-tenth of its growth momentum since last year.

The question on the minds of most people is how much of a slowdown Chinese leaders can tolerate.

The truth is that Chinese leaders themselves probably do not know the magic growth number that will force a decisive response. The factors that go into the political calculations of Chinese leaders are complex and dynamic

What Chinese top leaders really fear is the impact of a slowing economy on elite unity.

In China’s investment-driven economy, slow growth means less investment, which in turn means fewer spoils to be divided among the ruling elites. Local officials with less money to build projects will lose corruption income and opportunities to burnish their record and advance their careers. Their anger and frustrations will be concentrated on the top leadership, which will be heavily lobbied to loosen credit and rekindle growth. In this case, economic policymaking at the top will be swayed not by the relationship between growth and employment, but by pure elite politics.

If there is one economic factor that truly worries top Chinese leaders, it is the systemic fallout from economic slowdown. More specifically, in a highly leveraged economy, as China is today, a significant deceleration could quickly lead to cascading financial defaults. Deeply indebted real estate developers, local governments, and state-owned enterprises will not pay their creditors (both banks and suppliers), thus triggering chain default. This could throw the entire economy into turmoil. We saw a little preview of this during the credit squeeze in June.

[SinglePot]

One of the biggest ironies in the Snowden thing, is the US doesn't abuse internet snooping near as much as the Chinese do. Both the Chinese Premier and Obama know it, but it was the US which got its pants split (by Snowden's antics), and that's why the Chinese head honcho is grinning in the photo.

Yeah. thanks a lot Snowden.

As for the photo. I known that soft Chinese smile very well.

There is no dialogue with China. Everything is ON THEIR TERMS.

[SinglePot]

That really is a great picture

Yep. One picture, a thousand words.

And the words of Mao Zedong fill that room silently and with menace:

It will be easy to blame Chinas economic failures on the machinations of foreign powers, even as Mao Zedong did in his famous speech proclaiming the founding of the Peoples Republic in 1949. The fact that China had fallen behind, he said, was due entirely to oppression and exploitation by foreign imperialism and domestic reactionary governments.

China fell behind. Too bldy right they did. Japan flourished. China went backwards.

Now China is angry and hell bent on their single minded purpose.

The soft Chinese smile. oh yeah!

[SinglePot]

A question for the likes of NeverSure and Publicus and others who have knowledge:

Why does the US not just sever all ties with this pitiful and dangerous nation China?

Is China too important economically to the West? Are we too indebted to them?

Is the lure of 1.4 billion consumers too seductive for the likes of motor car manufacturers like BMW and drug companies like Bayer and Pfizer? Etc etc etc etc.

If I was Obama I would say to the Chinese 'We don't want anything to do with You."

The knowledge I have is companies like the ones I have mentioned are in China but OPERATING ON CHINESE TERMS.

There is no goodwill or generosity from China. Just greed and lust for revenge.

The Chinese Dream behind the cosy menacing smile of Xi Jinping.

[antfish]

A question for the likes of NeverSure and Publicus and others who have knowledge:

Why does the US not just sever all ties with this pitiful and dangerous nation China?

Is China too important economically to the West? Are we too indebted to them?

Is the lure of 1.4 billion consumers too seductive for the likes of motor car manufacturers like BMW and drug companies like Bayer and Pfizer? Etc etc etc etc.

If I was Obama I would say to the Chinese 'We don't want anything to do with You."

The knowledge I have is companies like the ones I have mentioned are in China but OPERATING ON CHINESE TERMS.

There is no goodwill or generosity from China. Just greed and lust for revenge.

The Chinese Dream behind the cosy menacing smile of Xi Jinping.

Probably because they don't think that China is a pitiful and dangerous nation and ties should be cut.

[SinglePot]

Fine. Suggest Obama moves all of his military out of Asia Pacific then.

[Publicus]

A question for the likes of NeverSure and Publicus and others who have knowledge:

Why does the US not just sever all ties with this pitiful and dangerous nation China?

Is China too important economically to the West? Are we too indebted to them?

Is the lure of 1.4 billion consumers too seductive for the likes of motor car manufacturers like BMW and drug companies like Bayer and Pfizer? Etc etc etc etc.

If I was Obama I would say to the Chinese 'We don't want anything to do with You."

The knowledge I have is companies like the ones I have mentioned are in China but OPERATING ON CHINESE TERMS.

There is no goodwill or generosity from China. Just greed and lust for revenge.

The Chinese Dream behind the cosy menacing smile of Xi Jinping.

It's no surprise it's all about bucks. Get 'em while you can, is the philosophy of Western investors, not only those of the United States.

Ten years ago Western investors figured the inherent, fundamental structural failures of the CCP economy wouldn't manifest until around 2015 or 2016. However, the structural fault lines of the CCP's economy are showing sooner than expected, which should be no real surprise to investors or to anyone else.

The collapse now is expected by the end of this year or, at the latest, during next year. Consequently, foreign and domestic capital has been fleeing the CCP-PRC for the past couple of years. FDI keeps finding new lows each quarter for the past umpteen quarters.

The CCP's economic structures, its financial system - its banks - are built on quicksand. Jim Chanos is a good source of all of this, has been saying it for years. Chanos was hollering in 2004 about the coming bust in the US housing bubble so he's exactly on top of these things. But Jim Chanos isn't the only one, just the most vocal over the longest period of time, the most consistent and the most openly on the record. Chanos is gonna make a zillilion bucks shorting on the CCP's catastrophic system of economics and finance.

The PRC market is 500million at the most, which was a lot by any standard. The 1.3 billion number is the headline number, worthless and meaningless, as it's impossible to make 1.3 billion people middle class by any standard. Add in India and the race for resources becomes impossible. Combined with corruption and incompetence, neither country will succeed, can succeed.

The CCP however is far worse in the corruption department and is destroying itself in its greed, something like Thailand when it precipitated the 1997 East Asian economic and financial meltdown. But the CCP-PRC is another universe from Thailand, Thailand being small potatoes compared and contrasted to the huge PRChina.

Western investors wanted the bucks out of the 500m who got a brief flash of development in the CCP's PRC. After the fall, the Chinese are on their own. And Washington won't need to pay the $2 trillion of T-Bills Beijing holds, which is the final kicker that destroys the RMB, the yuan. The RMB is practically monopoly money as it's been, and will be worthless paper beyond even the worst times of the Wiemar Republic - the Chinese would be lucky to get inflation in place of an absolute worthlessness of the yuan..

When it happens, the Chinese people are going to string up their CCP leaders by the balls. They're gonna hang 'em high. But that still doesn't feed the 500 million who lose everything, their life savings included. A lot of CCP will be long gone however before the people can get their hand on 'em, escaping abroad with their loot.

[mania]

Why does the US not just sever all ties with this pitiful and dangerous nation China?

Is China too important economically to the West? Are we too indebted to them?

You do know who the USA's biggest creditor is yes?

http://www.bloomberg.com/news/2013-05-15/china-retains-position-as-the-largest-foreign-creditor-of-u-s-.html

http://people.howstuffworks.com/5-united-states-debt-holders.htm

If countries like China did not buy the USA's debt the USD would be worthless paper.

It is not far from that considering the US is printing, creating so much paper to fund its many undeclared wars, overspending programs etc.

That the FED Reserve has taken to buying their own paper/IOU's with guess what?

More of their own IOU's

This will not end well.

Edited July 23, 2013 by mania

[SinglePot]

I don't give a monkey's toss about China and their past, present or future problems.

All I am concerned about is China's impact on the west, SE Asia, and Japan.

Dump them.

[SinglePot]

Why does the US not just sever all ties with this pitiful and dangerous nation China?

Is China too important economically to the West? Are we too indebted to them?

You do know who the USA's biggest creditor is yes?

Yep. so do the Chinese.

Cut the losses. default.

They ain't worth it.

[mania]

Yep. so do the Chinese.

Cut the losses. default.

They ain't worth it.

You really don't have a clue do you?

[SinglePot]

Yep. so do the Chinese.

Cut the losses. default.

They ain't worth it.

You really don't have a clue do you?

What's your solution?

[mania]

What's your solution?

Unlike some I do not see a boogieman in China

I also do not think the USA's crap does not smell at times like everyone else.

To suggest some crazy knee jerk reaction like default on debt is so silly though.

The debt is US Treasury Bonds

Do you think the US can say ...ok our US Treasury Bonds are now worthless we default?

You think that is reality?

To have all the US Dollars in the world suddenly become toilet paper?

Or do you think the US can say ...oh just the bonds that China holds is now no good?

Lastly you seem to think it is not a two way street?

You think Americans dont go to Walmart's for a reason?

You are suggesting isolationism for some belief that They are the bad & we are the Good

Which is Simplistic false thinking

Truth is that it is a partnership that both like.

[SinglePot]

china doesn't offer partnership.

one way traffic.

[mania]

china doesn't offer partnership.

one way traffic.

If they stop buying the USA's debt which allows the USA to print more dollars you will see how

one way it could be

Edited July 23, 2013 by mania

[SinglePot]

up to you.

if you are happy for a Chinese to have an american's arm twisted up his back, fine.

I don't like their style.

[Scott]

An off-topic post has been deleted. Stick to the topic.

[mania]

up to you.

if you are happy for a Chinese to have an american's arm twisted up his back, fine.

I don't like their style.

I am guessing your on topic of Currency issues as your post stands.

All I will say is I do not see it as arm twisting

As a lender is not twisting anyone's arm to borrow.

[SinglePot]

it's about power.

money is part of it but not all.

[mania]

it's about power.

money is part of it but not all.

One usually begets the other no?

How does one buy power or strength for military buildup etc?

Or infrastructure to broaden their economy?

I do not think anyone would call a financially poor country powerful.

[Scott]

it's about power.

money is part of it but not all.

One usually begets the other no?

How does one buy power or strength for military buildup etc?

Or infrastructure to broaden their economy?

I do not think anyone would call a financially poor country powerful.

North Korea, maybe? At any rate, they manage to get everyones attention fairly often!

[NeverSure]

A question for the likes of NeverSure and Publicus and others who have knowledge:

Why does the US not just sever all ties with this pitiful and dangerous nation China?

Is China too important economically to the West? Are we too indebted to them?

Is the lure of 1.4 billion consumers too seductive for the likes of motor car manufacturers like BMW and drug companies like Bayer and Pfizer? Etc etc etc etc.

If I was Obama I would say to the Chinese 'We don't want anything to do with You."

The knowledge I have is companies like the ones I have mentioned are in China but OPERATING ON CHINESE TERMS.

There is no goodwill or generosity from China. Just greed and lust for revenge.

The Chinese Dream behind the cosy menacing smile of Xi Jinping.

It's no surprise it's all about bucks. Get 'em while you can, is the philosophy of Western investors, not only those of the United States.

Ten years ago Western investors figured the inherent, fundamental structural failures of the CCP economy wouldn't manifest until around 2015 or 2016. However, the structural fault lines of the CCP's economy are showing sooner than expected, which should be no real surprise to investors or to anyone else.

The collapse now is expected by the end of this year or, at the latest, during next year. Consequently, foreign and domestic capital has been fleeing the CCP-PRC for the past couple of years. FDI keeps finding new lows each quarter for the past umpteen quarters.

The CCP's economic structures, its financial system - its banks - are built on quicksand. Jim Chanos is a good source of all of this, has been saying it for years. Chanos was hollering in 2004 about the coming bust in the US housing bubble so he's exactly on top of these things. But Jim Chanos isn't the only one, just the most vocal over the longest period of time, the most consistent and the most openly on the record. Chanos is gonna make a zillilion bucks shorting on the CCP's catastrophic system of economics and finance.

The PRC market is 500million at the most, which was a lot by any standard. The 1.3 billion number is the headline number, worthless and meaningless, as it's impossible to make 1.3 billion people middle class by any standard. Add in India and the race for resources becomes impossible. Combined with corruption and incompetence, neither country will succeed, can succeed.

The CCP however is far worse in the corruption department and is destroying itself in its greed, something like Thailand when it precipitated the 1997 East Asian economic and financial meltdown. But the CCP-PRC is another universe from Thailand, Thailand being small potatoes compared and contrasted to the huge PRChina.

Western investors wanted the bucks out of the 500m who got a brief flash of development in the CCP's PRC. After the fall, the Chinese are on their own. And Washington won't need to pay the $2 trillion of T-Bills Beijing holds, which is the final kicker that destroys the RMB, the yuan. The RMB is practically monopoly money as it's been, and will be worthless paper beyond even the worst times of the Wiemar Republic - the Chinese would be lucky to get inflation in place of an absolute worthlessness of the yuan..

When it happens, the Chinese people are going to string up their CCP leaders by the balls. They're gonna hang 'em high. But that still doesn't feed the 500 million who lose everything, their life savings included. A lot of CCP will be long gone however before the people can get their hand on 'em, escaping abroad with their loot.

Well, I have been "preaching" in the financial forum for months that China's economy is doomed and warning people to get their investments out of there. You've posted some good links.

What I'm not sure has been made clear is China's massive debt. They have what's called a "shadow banking system" where perhaps half of all lending is done by those other than banks such as insurance companies and others. They are unregulated but they are buried in those "ghost cities" and other bubbles.

While China's GDP numbers,taken at face value don't look bad, much of it is stimulus spending and debt driven.

Many people think that China is awash in money, even holding some of the US's debt. No, they are broke and they need the US dollars to do international trade - FOREX. If they sold the approximately 4 trillion they have in FOREX they couldn't do foreign exchange meaning import/export. Their economy would stop.

China is broke and deeply in debt and we're just waiting for the crash.