The US 2012 Once-in-a-Century Election: US-China Cooperation or Global Trade Wars? The U.S. 2012 election will also pave way to the most complicated international power transition in the past 140 years as the rising China may replace the United States as the leading growth engine of the world economy by 2020. US presidential elections of 2012 will take place in the most challenging environment, which will not be immune to catastrophic crises.
In the coming months, the US economy will be close to or in recession territory. Due to the Eurozone crisis, risks are heavily tilted to the downside. Meanwhile, large emerging economies, spearheaded by China and other BRIC nations as well as the surging Asia, are driving global growth. To make things even more complicated, the US presidential election will coincide with China’s 18th Party Congress in 2012, when current Vice President Xi Jinping will succeed President Hu Jintao, and Vice Premier Li Keqiang is expected to replace Premier Wen Jiabao. Once-In-A-Century Transition During President Obama’s first term, the broadened U.S. More On China And Jobs. Rob Johnson of INET sends me to an interesting paper by Autor, Dorn and Hanson (pdf) that uses regional data to estimate the impact of China imports on manufacturing employment.
The idea is to exploit the major differences among US metro areas in industrial specialization: some areas produce a mix of goods that is in effect in China’s path, while others don’t. The results suggest, as I have been arguing, that it’s wrong to dismiss Chinese exports as not really being in competition with US production. Now, some people will ask, didn’t I used to be a free-trader? Yes, and under normal circumstances I still mostly am.
But these are not normal circumstances! Like everything in economics, support for free trade should be based on analysis, not slogans. Who Will Eclipse America? - Simon Johnson. Exit from comment view mode. Click to hide this space WASHINGTON, DC – According to Voltaire, the Roman Empire fell “because all things fall.” It is hard to argue with this as a general statement about decline: nothing lasts forever. But it is also not very useful. In thinking, for example, about American predominance in the world today, it would be nice to know when it will decline, and whether the United States can do anything to postpone the inevitable. Contemporary commenters despaired of the Roman Empire for several hundred years before it finally collapsed. Could America find its way to a similar extension?
In terms of providing an essential structure for discussion of this problem, Arvind Subramanian’s new book, Eclipse: Living in the Shadow of China’s Economic Dominance, is a major contribution. The basic facts are incontrovertible. The US surpassed the UK in terms of industrial production as early as the end of the nineteenth century, but that was not enough to tip the balance. China, U.S. could tangle over Mideast oil. China Is Not America's Banker, RealClearWorld - The Compass Blog. Nathan Gardels: Kissinger: G-20 Is the Key Forum for Adjusting Global Power Shift. Henry Kissinger is a former US secretary of state. His most recent book is On China. He spoke with me for the Global Viewpoint Network on November 3. Nathan Gardels: Senior Chinese strategist Zheng Bijian has recently moved on from his doctrine of "peaceful rise" -a defensive posture which he proposed as a way of saying China is not a threat to the world --- to a doctrine of global engagement: "expanding the convergence of interests to build a community of interests.
" Do you see this convergence of interests between China and the West? What are some examples of where this convergence is taking place? Henry Kissinger: There are trends in both China and in the US and the rest of the West that support engagement around converging interests. The obvious places where there is a need for cooperation are in the new areas of global concern that have appeared: the environment, energy and nuclear proliferation. China is of the view that a new international system is emerging. Beyondbrics | News and views on emerging markets from the Financial Times. Guest post: don’t discount risks of trade protectionism By William R.
Rhodes, William R Rhodes Global Advisors Political and economic conditions are evolving in ways that could promote the onset of a new era of global protectionism. A revival of beggar-thy-neighbor policies cannot be discounted. The leading industrial economies today, five years after the financial crisis, continue to underperform. India elections: daily wrap It is a bank holiday in Mumbai, meaning markets are closed, but there was still lots for India to debate in the midst of a general election.
A new book on Sonia Gandhi’s control over Prime Minister Manmohan Singh has the public up in arms. India elections: how Gandhi undermined her PM Guest post: why is Akhmetov not combating separatism? By Taras Kuzio After the fall of president Viktor Yanukovich, the Euromaidan leadership turned to Ukraine’s eastern oligarchs to take charge of the Donbas region. It's free - so sign up here. By Saurabh Mukherjea of Ambit Capital. China and Russia Are Snubbing American Chicken. For years, the U.S. chicken industry has boosted profits by selling white meat to Americans, who eschew darker cuts, and exporting tons of thighs, legs, and feet to China, Russia, and Mexico, where consumers are less fussy.
That equation is now changing as China and Russia reduce imports and increase their domestic supplies, leaving dark meat piling up in the U.S. Compounding the pain for producers such as Tyson Foods (TSN), Sanderson Farms (SAFM), and Pilgrim’s Pride (PPC), feed costs are rising and bird prices have fallen. With production increasing as the big players jockey for position, investment bank Stephens says processors are losing an average of 12¢ on every pound they produce this year. Since last summer at least two producers, Townsends and Allen Family Foods, have filed for bankruptcy. “It’s a bloodbath out there,” says Tom Elam, president of consultancy FarmEcon in Carmel, Ind.
“The industry has a real problem. Read China’s Lips - Stephen S. Roach. Exit from comment view mode. Click to hide this space NEW HAVEN – The Chinese have long admired America’s economic dynamism. But they have lost confidence in America’s government and its dysfunctional economic stewardship. That message came through loud and clear in my recent travels to Beijing, Shanghai, Chongqing, and Hong Kong. Coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw. China is no innocent bystander in America’s race to the abyss.
Not only did China feel secure in placing such a large bet on the once relatively riskless components of the world’s reserve currency, but its exchange-rate policy left it little choice. Those days are over. First, the crisis and Great Recession of 2008-2009 were a wake-up call. Second, the costs of the insurance premium – the outsize, largely dollar-denominated reservoir of China’s foreign-exchange reserves – have been magnified by political risk. Four Reasons China is Betting On Europe (And Will Lose) | zero hedge. Slip-Up in Chinese Military TV Show Reveals More Than Intended | China News.
By Matthew Robertson & Helena ZhuEpoch Times Staff Created: August 21, 2011 Last Updated: April 7, 2012 EXPOSED: A picture of the hacking software shown during the Chinese military program. The large writing at the top says 'Select Attack Target.' Next, the user choose an IP address to attack from (it belongs to an American university). The drop-down box is a list of Falun Gong websites, while the button on the left says 'Attack.' (CCTV) Updated August 28, 8:50am EDT A standard, even boring, piece of Chinese military propaganda screened in mid-July included what must have been an unintended but nevertheless damaging revelation: shots from a computer screen showing a Chinese military university is engaged in cyberwarfare against entities in the United States.
The documentary itself was otherwise meant as praise to the wisdom and judgment of Chinese military strategists, and a typical condemnation of the United States as an implacable aggressor in the cyber-realm. U.S. War with China “Inevitable,” Author Glain Says | Daily Ticker. Outside of the market madness, the biggest global news this week might be China sending its first aircraft carrier to sea. The launch was not unexpected and China sought to downplay its significance, saying "it will not pose a threat to other countries. " Still, "it is the most potent symbol yet of China's desire to develop the power both to deny U.S. naval access to Asian waters and to protect its global economic interests, including shipping lanes," The WSJ reports.
Like many others, Stephen Glain, author of State vs. Defense, believes the U.S. and China are, indeed, on a collision course. Just as America adopted the Monroe Doctrine to project power in the Western Hemisphere, the Chinese believe they have a right to their own sphere of influence in the Asia-Pacific region. But to those who believe the U.S. and its allies must "bottle up" China, Glain says "there's nothing in those 3000 years of Chinese history" to suggest China's intentions are to militarily dominate the region.
A U.S. Sovereign Credit Downgrade Is No Laughing Matter. By EconMatters With a stalemate heading into the weekend, the debt drama of the United States is going down to the wire, and when the clock strikes twelve midnight on August 2 (countdown clock at our homepage), the world's largest economy could be looking at an unprecedented technical default. The current consensus suggests that although a total default is nothing but a remote possibility, the damage is already done to the dollar, and a sovereign debt downgrade could be inevitable even after the debt ceiling deadlock is resolved. China, as the largest foreign holder of the U.S. debt, is totally freaking out. as NPR reported, "State Department officials now admit that China has been using diplomatic channels to express its concern. It has sent several official demarches urging Washington to abide by its financial commitments. " Beijing has been trying to diversify away from the dollar in recent years; however, with its huge reserve size, the effort has not made much of a dent.
Welcome to Center for America-China Partnership ! Is China driving the wrong kind of structural change in the U.S.? By Maggie McMillan, guest blogger When economists talk about structural transformation, they typically have in mind developing countries and the dual economy models à la W. Arthur Lewis that emphasize productivity differentials between broad sectors of the economy, such as agriculture and manufacturing. They don't usually think about countries like the United States where this type of transformation has already taken place. But the figure below indicates that it is something we should be thinking about. Note: Abbreviations are as follows: (agr) Agriculture; (min) Mining; (mfg) Manufacturing; (pu) Public Utilities; (con) Construction; (wrt) Retail and Wholesale Trade; (tsc) Transport and Communication; (fire) Finance and Business Services; (cspsgs) Community, Social, Personal and Government Services.
The cost of this transformation has not been well understood. The key question is: what is driving this pattern?