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Saturday, May 19, 2007

China v. US in Important Talks

A Chinese delegation is coming to DC to negotiate new trade policies.

They are also continuing with their "We're China, #^&% You!" philosophy.

Yesterday, the Chinese announced that they will allow the yuan to appreciate faster, which the US has been pushing for for a long time. However, the allowed appreciation is well below the 30 to 40% correction the US thinks they should appreciate the yuan. Also, the Chinese are doing it more to help keep their economy from overheating - the Chinese economy grew at around 11% last quarter.

I don't want the US to be isolationist; besides that, growing the Chinese economy has lifted literally hundreds of millions of Chinese out of poverty over the last 30 years. China's economic relations with other developing market countries will also help raise people in those countries out of poverty. So, on the whole, the growth of the Chinese economy is a good thing, if you care about poverty. That said, the US can't sustain this inequitable trade relationship with China forever.

No matter what comes out of these trade talks, it is important to remember that everything China does, it does for China - I'm not judging that as being right or wrong, it's just a fact. One to keep in mind.

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