Recent rhetoric ( surchur.com) is not helping our relations with China.? This is a ploy, in my opinion, by Chinese leaders, to take the focus off troubles at home.? And it is a dangerous mistake.

This fairly recent?development by our economic partner/adversary?deserves some elucidation…and a word or two of cautionary warning.? Start with this.? Bully’s are not usually as strong as they act.? I had a problem with one once in?10th grade.? He was bigger, meaner and uglier.? He was a dude.? He also went down like a ton of bricks when I’d had enough (yeah, but I was the one that got in trouble at school, how does that work?).

First, China is openly beginning to?bring pressure to bear on the ‘American’ model in international finance and economic venues (like the G-20 conference).? Sure, we have failed in our own dilegence, and we have let?our capitalist model run beserk for a while, but let’s face it China is a far cry from achieving the long-term prosperity that our model has generated for decades (centuries).?

There is more to it than that.

Many of?China’s worried citizens, 9% of whom are unemployed (imagine 60 million+ people without jobs wandering the streets!) want the $2 trillion of U.S. debt their government owns to be returned and spent at home.? They also want the government to get tougher with us.? Some of their more vocal dissidents too (the government lets anti-Americanism flow freely, but not criticism of their own system).? Their leaders are behind this believe me.? It is a ploy, a tactic, and should not be allowed the light of day.

While the $2 trillion is a?tremendous lever against the U.S. and seems to be an equally tremendous?potential benefit for China, there is no reason to believe that button will be pushed.? Sure, $2 trillion is a lot for?improving their infrastructure, for their growing military (including a proposed aircraft carrier), for social spending or whatever.? But, that is not a real alternative.??A short term ‘fix’ at best.? Their leaders would be mistaken to?continue suggesting such a path?(even with?further internal pressure–though I doubt that pressure?is independently real).?

Our leaders must know it is a shallow threat and have to treat it as such.

China has the largest positive trade balance in the world (over $310 billion in the last 12 months–on total exports of about $1.4 trillion).? Where does much of that come from?? The U.S.!? We of course have the largest trade deficit (nearly $800 billion in the last 12 months).? Much, if not?all,?of that comes from our relationship with China.? That could end in an instant with trade barriers and further ridiculous ‘hints’ from them would encourage our rapacious, and hasty (usually only when inadvisable), Congress to act.

If China begins to?play recalcitrant in their financial ‘arrangement’ with the U.S. their trade balance would fall off a cliff . . . and unemployment would worsen rapidly.? That is a risk they simply cannot take.? Another 10 million or so added to their unemployment lines would be just enough to encourage open dissension.? Revolution.? Maybe.? No one wants that in today’s economic turmoil.

So, BHO and his team need to be firm when dealing with China.? Trade imbalances need to be fixed.? Currency imbalances need to be fixed.? Negative rhetoric needs to be stopped.? China needs to contribute more to the world-wide financial and economic crisis and forget about isolating?and distancing themselves from their original capitalist model (the U.S.’s by the way).?

Stop the negative vibes, China.? You need to make friendly with us, dudes, we are not (really) the bully here.? Let me be frank.? We need you to sell us the cheap inexpensive goods that fill the ‘five-high’ shelves in Walmart.? Shucks, I am not sure you can even buy a T.V. that isn’t made in China today, let alone one from Walmart (that I am sure of).? Yet, you need us to buy those goods.? And at ever increasing volumes.? At least for the forseeable future.?

Hu Jintao, start talking up the American/ Sino realtionship, we ought to be buddies, dude.? Make goodie – goodie with Barrack.? While you are at it, start paying your part of the international bill this recession has left.? China is not completely innocent in this scenario.? Start recognizing it takes two to Tango.? If you want to dance with ‘the star’ you’d better listen to the beat of the music.? Truth is I don’t even care if you become the star.? We’ll still be glad to dance (with all 1.3 billion of your partners for our 300 million).

As for our part.?? BHO should realize the hollowness of?the Chinese Rhetoric (what? A new currency to replace the $$ — yeah, Europe thought that would work too) and start playing hardball if it continues.? We are sure as heck not going to do all of this alone — our wonderful legislative branch (it hurts to say that) won’t let it happen.? Believe it, dude.

America can’t fight the worldwide recession on its own.? We don’t need to.? China needs to do?their part and stop whining.? Free trade means just that, free–open–transparent–competitive.? Try it for a change, China.

Let the Yuan float or trade freely against the $$ or any other currency.? I don’t care about the internal implications.? It’s a flat world.? Deal with it.? Start pushing your own consumer economy.? Let them buy American for a change.

I learned a long time ago.? You push a bigger guy too much and soon he is going to push back.? Goes the other way, too.? I realize that as well.? Stop pushing , Hu Jintao and all of your endlessly communist buddies.? Let your people think and act for themselves.

Worked for us.? Still is too, just see what happens a year or two down the road.?

Sure, America screws it up bad at times.? But, we innovate and create and pretty soon we are the prom queen (or king) again.

Gotta love it dude.

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thanks for the flickr pic from chesi – photos cc