some therapeutic chat from its special relations in London
US Treasury reports last week also showed that in the second quarter, more than half of US Treasury bonds were held by foreigners, mostly Asian, and increasingly by China. But it is not just treasury bonds. Foreign central banks spent $125.2 billion on US assets in the last quarter, which helped finance the record $136.9 billion balance of trade deficit.
It is not Beijing's fault that foolish policies in Washington have created a consumer boom that is drawing in imports more than stimulating domestic production. Beijing did not create currency policies that allow Americans both as individuals and as a nation to live on debt.
So despite all that bluster from the commission, Congress is highly unlikely to act in the aggressive and assertive way the commission suggests, unless Beijing does something silly like disband the Hong Kong government or attack Taiwan, almost certainly not.
Simply put, there are too many companies in the US, from Wal-Mart onwards, making a lot of money by selling Chinese products. They are hardly likely to call for protective tariffs when they are designing, ordering and importing their products from China. Indeed, they will lobby and have lobbied strongly and successfully against any restrictions on outsourcing. And no one is going to stifle credit or increase taxes when there are closely contested and highly partisan elections in the offing.
Ian Williams/Asia Times Jun.22.04
