Wow!! Krugman on China: "Rare & Dangerous"

If you care about America, you need to read this:

http://www.bbc.co.uk/blogs/newsnight/paulmason/2009/11/rare_earth_the_new_great_game.html

and

http://www.bbc.co.uk/news/world-asia-pacific-11581288


This is a huge issue with strategic implications that go far beyond mining. China is attempting to control the entire high-tech industry and lock the world out. The time to stand up is now or we will see ourselves left out in the cold.

 

Why is this a issue? Since China only has 30% of the Rare Earth reserve, there should be plenty of alternatives.

Dont give me the bs that it would take 15 years to mine rare earth in the US. If they are so important, I am sure US could find a way to produce them in 1 year or less. The Fed could cover the loss easily by printing more paper money.

 

What am I supposed to take from this mumbo-jumbo? You can't stand any criticism of China. I get that and don't care. In this country one can say pretty much whatever one wants to say, without fear of being arrested and thrown in prison, so that's what I'm doing. Again, you simply can't stand to read criticism directed towards China. You aren't alone. Tough.

Oh, and answer me this... concerning your mention of North Korea, South Korea, and the Pacific Fleet, were you implying that North Korea didn't sink the South Korean warship? That the exercises weren't about North Korea at all, but rather to "teach China a lesson?" And that we should have bombed North Korea? Are you mad?

 

I've found a disturbing pattern in your posts, whenever there is something you don't agree with, you start to call people mumbo-jumbo, mad, ramble, whatever. Guess who is dog barking? Or someone's home country experienced a beat down long time ago by some neighbor and still suffers a inferior complex?

 

I missed this post my last time through. I'll bite.

Let's say you own a rare earth mine in China right now, here's your situation. You have capacity to produce 12 metric tons of rare earth per year. Your export quota is 10, soon to be dropped to 8 or maybe even 7. If you read your own article, that's pretty much what's happening right now, where when the ship incident happened, there are 2 1/2 months left in the year but only less than a month of quota left. Being in the oligopoly position that you are in, you CAN choose who you want to sell to. And if you're negatively pre-disposed towards the Japanese, and the price of REM being pathetically low (given the environment costs) that they are, why would you choose to ship to Japan over anyone else?

Heck, you can even score some free political points over those dumbass students camped outside the Japanese embassy in Beijing without negatively impacting your bottom line in any way. Otherwise how would you explain the ceasation of shipments to the rest of the world? China declaring political war on everybody?

If you're gonna believe in conspiracy theories, I've got a far better one for you. It's no secret that Beijing doesn't like exportng rare earth. The prices are too damn low and the environmental costs are too damn high. And of course, after China exports them (at too low a price), the Japanese (who has been stockpiling them for years) put them in computers, wind turbines, etc and sell them back to China at a MUCH higher price and margin. It's no secret that the Chinese government is trying to climb up the value chain. It wants to be the one selling high profit/high margin finished products instead of cheap materials.

If you're gonna spin a conspiracy theory, that's the one I'd spin. Unfortunately for you, that's entirely economical and politics has nothing to do with it.

 

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This is so idiotic I wonder how anyone can keep a straight face while telling it.

The US has been "easing" monetary policy many times in its history. Heck, as I've mentioned already, through good and bad economic times over the past 3 decades, it "eased" its monetary policy over 35% measured against a trade-weighted basket. As of right now, the US dollar is down against all 16 major traded currencies, despite that many of those 16 are in deep **** of their own.

We're just "easing" some more right?

 

Mumbo-jumbo? Hmm OK. So let's cut the crap here. Say a Chinese manufacturer produce shirts. He asks to be paid in an amount that buys 10,000 loaves of bread. 6 month later after he delivered those batch of shirts, he only got paid an amount that buys 9,800 loaves of bread because the US used the money printing press. And that is with "currency manipulation." So what the ***** are you gonna do about it? How are you gonna guarantee the Chinese manufacturer is paid the amount promised?

Another example. Some Chinese guy bought US dollar assets. Then the Fed used the money printing price to cheapen its way out of debt. What the ***** are you gonna do about it? How do you protect that Chinese guy's invesgtment?

 

I think you are wasting your time arguing with these Chinese posters. They have their view but their interests are not aligned with ours. They are going to see it their way. Maybe it's a result of brainwashing or whatever, but who cares.

At the end of the day, I'm genuinely disturbed by what I see as our gov't selling out Americans so companies can make a short term profit by bending over to the Chinese.

We need a real movement here, not a Democratic or Republican one but truly a more nationalistic one that recognizes that our gov't is no longer serving our interests. That it's all about serving short term quarterly profits and not the future which will shortly be controlled by the dragon on the other side of the world.

China is the most capable country in so many ways. Super smart people, super unified gov't and an industry completely in control. I have a newfound respect for China and I think we've been foolish to underestimate her aims for economic domination. China will be the biggest superpower and most powerful nation on earth - and I do think it will practice a type of merchantilsm far worse than the U.S. did.

We need to wake up. I know this sounds alarmist, but the whole REM thing is a really bucket of ice cold water. I wish the Tea Party had made this their signature issue - I would have totally supported it for that cause.

 

Sweet Lou and Deckard, since you are unhappy with China's policy of imposing rare earth quotas and "closing their markets", why don't you guys petition your government to "liberate" China and their markets The world needs more American "active involvement" in the perpetuation of free tributes to America :grin:

There are two precedents for economic liberation that America can refer to and use as a basis of her justification to "liberate" the Chinese economy

1. The Opium War

Diplomacy, gunboat style.

Send all 12 of your aircraft carriers to the Chinese coast. Carpet bomb Beijing and Shanghai until they surrender. The Chinese might be able to sink about 10 carriers, but hey, at least their market will finally be open, the US will get its rare earths, you get to steal... I mean, be given in tribute all the Chinese gold bullion + half China's foreign reserves, and you guys will get a couple of free ports. Who knows, the Chinese might even give Hong Kong and Macau to you

2. World War II

When the US imposed a trade embargo on oil against Japan, Japan said enough was enough and attacked the US at Pearl Harbour :grin: So why not apply this lesson back at China. Go destroy their navy at Hainan Island or at Liaoning. Show these Commie upstarts that they have NO RIGHT to impose a rare earths embargo on the US

Go on. Do the necessary. More action, less talk you guys :grin:

 

looks like our gov't is taking this more seriously than I had thought. It's a good relief.

http://www.nytimes.com/2010/10/26/world/asia/26china.html


Taking Harder Stance Toward China, Obama Lines Up Allies


WASHINGTON — The Obama administration, facing a vexing relationship with China on exchange rates, trade and security issues, is stiffening its approach toward Beijing, seeking allies to confront a newly assertive power that officials now say has little intention of working with the United States.

In a shift from its assiduous one-on-one courtship of Beijing, the administration is trying to line up coalitions — among China’s next-door neighbors and far-flung trading partners — to present Chinese leaders with a unified front on thorny issues like the currency and their country’s territorial claims in the South China Sea.

The advantages and limitations of this new approach were on display over the weekend at a meeting of the world’s largest economies in South Korea. The United States won support for a concrete pledge to reduce trade imbalances, which will put more pressure on China to allow its currency to rise in value.

But Germany, Italy and Russia balked at an American proposal to place numerical limits on these imbalances, a step that would have further isolated Beijing. That left the Treasury secretary, Timothy F. Geithner, to make an unscheduled stop in China on his way home from South Korea to discuss the deepening tensions over exchange rates with a top Chinese finance official.

Administration officials speak of an alarming loss of trust and confidence between China and the United States over the past two years, forcing them to scale back hopes of working with the Chinese on major challenges like climate change, nuclear nonproliferation and a new global economic order.

The latest source of tension is over reports that China is withholding shipments of rare-earth minerals, which the United States uses to make advanced equipment like guided missiles. Administration officials, clearly worried, said they did not know whether Beijing’s motivation was strategic or economic.

“This administration came in with one dominant idea: make China a global partner in facing global challenges,” said David Shambaugh, director of the China policy program at George Washington University. “China failed to step up and play that role. Now, they realize they’re dealing with an increasingly narrow-minded, self-interested, truculent, hyper-nationalist and powerful country.”

To counter what some officials view as a surge of Chinese triumphalism, the United States is reinvigorating cold war alliances with Japan and South Korea, and shoring up its presence elsewhere in Asia. This week, Secretary of State Hillary Rodham Clinton will visit Vietnam for the second time in four months, to attend an East Asian summit meeting likely to be dominated by the China questions.

Next month, President Obama plans to tour four major Asian democracies — Japan, Indonesia, India and South Korea — while bypassing China. The itinerary is not meant as a snub: Mr. Obama has already been to Beijing once, and his visit to Indonesia has long been delayed. But the symbolism is not lost on administration officials.

Jeffrey A. Bader, a major China policy adviser in the White House, said China’s muscle-flexing became especially noticeable after the 2008 economic crisis, in part because Beijing’s faster rebound led to a “widespread judgment that the U.S. was a declining power and that China was a rising power.”

But the administration, he said, is determined “to effectively counteract that impression by renewing American leadership.”

Political factors at home have contributed to the administration’s tougher posture. With the economy sputtering and unemployment high, Beijing has become an all-purpose target. In this Congressional election season, candidates in at least 30 races are demonizing China as a threat to American jobs.

At a time of partisan paralysis in Congress, anger over China’s currency has been one of the few areas of bipartisan agreement, culminating in the House’s overwhelming vote in September to threaten China with tariffs on its exports if Beijing did not let its currency, the renminbi, appreciate.

The trouble is that China’s own domestic forces may cause it to dig in its heels. With the Communist Party embarking on a transfer of leadership from President Hu Jintao to his anointed successor, Xi Jinping, the leadership is wary of changes that could hobble China’s growth.

There are also increasingly sharp divisions between China’s civilian leaders and elements of the People’s Liberation Army. Many Chinese military officers are openly hostile toward the United States, convinced that its recent naval exercises in the Yellow Sea amount to a policy of encircling China.

Even the administration’s efforts to collaborate with China on climate change and nonproliferation are viewed with suspicion by some in Beijing.

Mr. Obama’s aides, many of them veterans of the Clinton years, understand that especially on economic issues, there are elements of brinkmanship in the relationship, which can imply more acrimony than actually exists.

But the White House was concerned enough that last month it sent a high-level delegation to Beijing that included Mr. Bader; Lawrence H. Summers, the departing director of the National Economic Council; and Thomas E. Donilon, who has since been named national security adviser.

“We were struck by the seriousness with which they shared our commitment to managing differences and recognizing that our two countries were going to have a very large effect on the global economy,” Mr. Summers said.

Just before the meeting, China began allowing the renminbi to rise at a somewhat faster rate, though its total appreciation, since Beijing announced in June that it would loosen exchange-rate controls, still amounts to less than 3 percent. Economists estimate that the currency is undervalued by at least 20 percent.

Meanwhile, trade tensions between the two sides are flaring anew. The administration recently agreed to investigate charges by the United Steelworkers that China was violating trade laws with its state support of clean-energy technologies. That prompted China’s top energy official, Zhang Guobao, to accuse the administration of trying to win votes — a barb that angered White House officials.

Of the halt in shipments of rare-earth minerals, Mr. Summers said, “There are serious questions, both in the economic and in the strategy realm, that are going to require close study within our government.”

Beijing had earlier withheld these shipments to Japan, after a spat over a Chinese fishing vessel that collided with Japanese patrol boats near disputed islands. It was one of several recent provocative moves by Beijing toward its neighbors — including one that prompted the administration to enter the fray.

In Hanoi in July, Mrs. Clinton said the United States would help facilitate talks between Beijing and its neighbors over disputed islands in the South China Sea. Chinese officials were livid when it became clear that the United States had lined up 12 countries behind the American position.

With President Hu set to visit Washington early next year, administration officials said Mrs. Clinton would strike a more harmonious note in Asia this week. For now, they said, the United States feels it has made its point.

“The signal to Beijing ought to be clear,” Mr. Shambaugh said. “The U.S. has other closer, deeper friends in the region.”

 

I would just like to point out that if they are Chinese, then it's hardly being brainwashed if you're defending your countries practices isn't it?

IMO this probably comes down to one fundamental question: Do you think China, as a developing country, should impose tariffs?

 

We're not attacking the country, rather what the gov't is doing. The U.S. is criticized all the time, and I recognize legitimate criticism. Not accuse people of imperialism or hypocrisy.

This is far more than a developing nation imposing tariffs. No one is trying to stop China from being a rich country - there's plenty of room at the top. But we don't want China to squash all the industries and make it so we are unable to compete. These tariffs aren't being done to just protect China's industry, it's being done to gain a strategic advantage.

and it doesn't stop at tariffs. There's much much more being to make it so that American companies can't compete in China and that China will flood our markets so essentially China turns the U.S. into a declining power.

The U.S. has every right to protect her industries against this type of targeting from China's gov't.

 

(Cue Twilight Zone music)

We've entered Bizarro World, folks. Do not attempt to adjust your television set. What you are seeing is an alternate reality, an artificial construct from the mind of...

Karlfranklin!

 

http://www.ft.com/cms/s/0/cbbdbc42-e056-11df-99a3-00144feabdc0.html

US pushes India to take bigger Asian role

By James Lamont and Anjli Raval in New Delhi and Michiyo Nakamoto in Tokyo
Published: October 25 2010 17:54 | Last updated: October 25 2010 17:54

The US is pushing India to lift its role in Asia as one of the continent’s leading democracies and largest economies at a time when the region is becoming increasingly anxious about a more assertive China.

Ahead of US President Barack Obama’s visit to India early next month, senior US government officials said on Monday they wanted India to take a “more active” role outside of its immediate south Asian region, in trade and political and security co-operation.

 

I think it's safe to say that the U.S. no longer views China as a cooperative partner to share the world with. This is probably one of Obama's biggest foreign policy mistakes as it was with Clinton and Bush.

I think we're officially into the next cold war.

 

I agree, a government should protect their industries, BUT (and this is a big but) not through protectionism, but by encouraging investment and saying that 'We as, the gov, will help you along the way to becoming better, not by directly blocking off other countries competition, but subsidising improvement'.

I understand where you are coming from, but I would also argue that USA should set an example, to show that they CAN take the high road and not stoop to China's level.

 

Obviously, mumbo-jumbo has struck a nerve with you two. Why, I have no idea, it being something I first heard as a kid in the early 1950's, and have used from time to time ever since. To be sure, however, that you know just what it means, here's the first description I found on Google:

Mumbo jumbo, or mumbo-jumbo, is an English phrase or expression that denotes a confusing or meaningless subject. It is often used as humorous expression of criticism of middle-management and civil service non-speak, and of belief in something considered non-existent by the speaker (such as ghosts or other superstitious beliefs).

http://en.wikipedia.org/wiki/Mumbo_jumbo_(phrase)


(goofus!)

 

Brainwash my *ss.

Here is another fact check. A large quantity of Chinese rare earth export is black market. If China simply actively enforce existing quotas, 35% or so supply would vanish. In fact, the stop-shipping could very well be black market ones. Do any Western journalists check that out?

What I read from the situation is the failure of the U.S. rather than evil Chinese. In fact, what I see what U.S. needs most these days is to self-reflect, rather than blame failure on others - other political party, other folks, other country - from the top right down to general public. (Just take a cursory read around this bbs)

Making the U.S. weak isn't in my interest, and I believe isn't in China's interest also.