China: Friend or Foe?
He describes America's frustrations with the Chinese refusal to allow their monetary unit to float like most of the others, and China's frustration with the US for menacing to put barriers against Chinese imports.
I would add that the barriers are already rising. According to an article by Sarrah Filus in the LA Business Journal of 8/20/07, "some 3000 companies in LA's apparel industry could be affected by the so-called 'safeguard quotas' ", whatever those are. "The quotas went into effect in 2006 on 34 categories of apparel imported only from China. In 2005, there were no quotas. The quotas were imposed as a result of pressure from U.S. textile manufacturers who were alarmed at the rising imports from China.... For example, the limit of 271 million cotton pants and 261 million pairs of underwear from China are expected to be reached as early as October. Thereafter, no more imports will be allowed on those items until next year."
Add this to the poisonous toothpaste, the lead-painted dolls, the tainted fish and dog food, and all the other scares we've been hearing about recently, and you have a de facto embargo against China that the latter don't appreciate.
[Thanks to BizHat.com and Nokia for this photo.]
Only trouble is, as Mr. London points out, this very same China is holding 44 percent of the American national debt.
This would be okay, but given the instability of the US financial markets--indeed world markets--at this time, I'd be careful how I threw names, sticks and stones at them, all the more so in light of the fact that the US Federal Reserve is a partner in crime when it comes to creating the wherewithal for American citizens and their government to spend away their children's future and make it possible for China to hold so much of our debt. (For more on this, see my previous posts, like this one.)