U.S. vs. China?
Yesterday, the U.S. and the eleven other nations announced that they had finally – after rounds and rounds of delays – an agreement. The Trans-Pacific Partnership (TPP) have been controversial and widely criticized, with secret negotiations taking place behind closed doors.
Even the ultra liberal and Western brain-washed readers of the New York Times see little to like about the agreement. For example, within a day of the announcement of the agreement, the top 10 comments (as voted by the readers) in the piece in which the NYT reported read: Read more…
The EU begins officially to investigate Google for alleged anti-competitive practices. According to this aljazeera report,
European Union regulators are to investigate whether Google has abused its dominant position in the online search market in what will be the first major inquiry into the internet giant’s business practices.
The competition watchdogs formally announced their investigation on Tuesday after complaints by rivals that Google gave their services “unfavourable treatment” in unpaid and sponsored search results.
Authorities will investigate whether Google’s services are being given preferential placement in search engine results, some of which may lead to consumer spending.
One of the complainants, British search site Foundem, said in a that its revenue “pales next to the hundreds of billions of dollars of other companies’ revenues that Google controls indirectly through its search results and sponsored links”.
French legal search engine ejustice.fr and Microsoft-owned shopping site Ciao also lodged complaints against Google with the EU commission in February. Read more…
Intro: China’s accumulation of foreign currency is a hotly debated topic. Secretary of Treasury Geithner recently characterized it as “currency manipulation,” a legal term of art which allows the United States to take retaliatory measures.
I have written a paper that approaches this practice from a different angle, and recommends a different solution. The paper can be downloaded here http://ssrn.com/abstract=1332842
In this paper, I revisit the historic ideas surrounding miserliness and usury. I explain why these were economically pernicious activities, and why they were socially stigmatized or made illegal. The paper then moves onto international relations. I argue that China has been acting as miser and usurer on the world stage, at the expense of its own needs and global productivity. The world needs to balance spending vs. saving/investing/lending, and if there is too much of the latter then a rebalancing is inevitable. China has been doing too much of the latter, and the current economic crisis is that rebalancing.
The preferred solution to this problem is not trade protectionism, but rather increased trade. Over the past decade Americans have spent trillions of dollars on Chinese goods and services. This created employment in China and helped the country achieve its potential. The Chinese have responded by hoarding and lending that money. But a relationship where Americans spend and Chinese save and lend is not viable. Only when China takes the dollars Americans spend to employ Chinese, and uses it to employ Americans, will there be a sustainable relationship that can tap the productive potential of both countries. The United States has taken the first step and spent to establish this relationship. It is now China’s turn to spend, to advance that relationship.
I am interested in comments before the paper is published, so please do not hesitate to write me at the link above with any feedback.
Note: post title and content changed per the author’s request. -admin
Apparently, at least one of the columnists at the Washington Post reads this blog. Sebastian Mallaby, a veteran from the Economist and contributor to Foreign Affairs, Foreign Policy, Prospect, the National Interest, the New York Times, Policy Review, Slate and the New Republic, and specializing in globalization, trade, investment trends, international development and economic policy, has apparently taken my advice for Tim Butcher to heart. Mr. Mallaby decided to follow up with Tim Geithner’s recent and much discussed comment about China’s “manipulation of currency” and penned a piece that’s not safe for your computer if you are drinking coffee while reading it.
The Doha round of WTO talks in Geneva collapsed on Tuesday. It was the US vs. India and China, without being able to resolve their differences in farm products. In my view, it’s a good thing that the talks collapsed because the real benefits of the proposed deal to developing countries were minimal but risks were very high indeed. India pulled the plug, with China assisting.
What do you people think? Collapsed, is it good?