Containing China

President Obama’s announcement that he was sending 2500 Marines to Darwin Australia sent shockwaves through government circles in China. The Chinese, who are taking giant leaps to expand and modernize their military, should not have been surprised by the US-Australian action, in what many policy wonks believe to be the first shot across the bow of a more aggressive response to China’s designs in Asia.

But while the military move by the US and Australia may have caught the Chinese off guard, the real threats to the security of the western nations is not China’s building of new aircraft carriers and fighter jets, but rather its financial and trade policies that Washington policy-makers and politicians seem unwilling to address. Placing 2500 Marines in Darwin will do nothing to stop China’s one way economic relations with the United States and Europe.

With little but infrequent grumbling by the Obama administration and the Congress, China has maintained its practices of industrial espionage, undervaluing the yuan, setting up restrictive trade practices and insisting that companies hand over inside information on their products as a precondition to entry into the lucrative Chinese market. It is clear that both Washington and corporate America are not only so anxious to continue the cheap goods practices with the Chinese export sector, but also realize that any kind of trade, currency or intellectual property war would be a losing battle, especially since China holds so many of our debt obligations.

So far the Obama administration takes the position that talking quietly to the Chinese is the best way to bring about trade reform and compliance with established financial standards, but there doesn’t appear to be any specific actions that are being contemplated or implemented to even the playing field and get China to play by a new set or rules. Sending the Marines to Australia is not going to level the playing field.

Currently there is a lot of hoopla in the media and in some consumer sectors to Buy American and stick it to the Chinese by supporting our own industries and workers. But this campaign is just in its infancy and likely will only be patriotic talk. It is simply impossible to counteract cheap Chinese goods with more expensive US goods, that is unless the US government starts backing up its talk with action.

 

 

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