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March 18, 2010
Cal Thomas: Israel's New Enemy: America?
JWisdom.com Love me not? with Rabbi David Aaron (5 minutes)
Jonathan Rosenblum: Washington Throws a Tantrum
March 17, 2010
Rabbi Yonason Goldson: Orwell, Santayana, and Me
Jonathan Tobin: How Many Lives Is Biden's Pride Worth?
March 16, 2010
Steven Emerson: Combating Lawfare
JWisdom.com How to perform a miracle with Rabbi Yaakov Asher Sinclair (4 minutes)
Anne Bayefsky: Behind Obama's Dangerous Overreaction on Israel
March 15, 2010
The Jewish Ethicist By Rabbi Dr. Asher Meir: Father's obligations toward minor children
JWisdom.com Moody, Grumpy, Irritable Children with Sarah Chana Radcliffe (5 minutes)
Judith Graham: Get the whole picture before a CT
March 12, 2010
Rabbi David Aaron: You CAN have Heaven on Earth
JWisdom.com Manufacturing mediums with Rabbi Sroy Levitansky (4 minutes)
Caroline B. Glick: The march of the Red-Green brigades
March 11, 2010
Glenn Garvin: Conspiracy theories, why people believe them and how they spread
JWisdom.com For Yourself, Not By Yourself with Rabbi Lawrence Hajioff (8 minutes)
The Kosher Gourmet by Linda Gassenheimer : Turn leftovers into tasty New England hash
Paul Richter: Biden promises 'viable Palestine' is in the offing
March 10, 2010
Paul Greenberg: Death Checks In
JWisdom.com How To Get A (Real) Life with Rabbi Warren Goldstein ( EXTENDED EPISODE)
Paul Richter: Israel exerts soverign right to its capital as Biden looks on astounded
Richard A. Serrano: 'Jihad Jane' indictment alleges threat from within U.S.
March 9, 2010
Wesley Pruden: Joe's Israeli adventure
JWisdom.com Free To Be (Responsibly) You and Me! with Rabbi Naftali Brawer ( 8 MINUTES)
David G. Savage: Supreme Court to rule on free speech in case of soldier's funeral
March 8, 2010
The Jewish Ethicist by Rabbi Dr. Asher Meir: Make a fuss about those who cuss?
JWisdom.com Finding or Losing Yourself? Here's How! with Rabbi David Aaron ( 5 MINUTES)
Steven Emerson: America must learn from the UK about the future of Islamist subversion
March 5, 2010
Rabbi Berel Wein: Golden Calf still with us --- except it has multiplied
JWisdom.com The Limits of Eternity with Rabbi Sroy Levitansky ( 4 MINUTES)
Caroline B. Glick: Biden's lost cause
March 4, 2010
Alan M. Dershowitz: How About A Real Campaign Against Abuses?
JWisdom.com Using Things, Loving People with Rabbi Lawrence Hajioff ( 7 MINUTES)
Jordan "Gorf" Gorfinkel's Everything's Relative
March 3, 2010
JWisdom.com Grasping The Name of Your Life Game with Rabbi Warren Goldstein ( 8 MINUTES)
The Kosher Gourmet by Marialisa Calta : A cowboy's recipes for really good grub
March 2, 2010
Rabbi Avi Shafran: Someone's there
Diane Toroian Keaggy : Have we misunderstood Michelangelo?
March 1, 2010
JWisdom.com Whole in One with Rabbi David Aaron ( 5 MINUTES)
Michael Muskal: Hillary meets with Israeli official, discusses gefilte fish dispute
Feb. 26, 2010
Rabbi Francis Nataf: The Megilla of Spring
JWisdom.com A Biblical Secret for a More Powerful You with Rabbi Sroy Levitansky ( 5 MINUTES)
Caroline B. Glick: When rhetoric rules the roost
Feb. 25, 2010
The Jewish Ethicist By Rabbi Dr. Asher Meir: When walking away from your mortgage is both economically sound and makes ethical sense
JWisdom.com The Second Most Important Question in Your Life with Rabbi Yehoshua Karsh ( 5 MINUTES)
Seema Mehta : U.S.-Israel relations raised in California's Senate race --- by conservatives
Feb. 24, 2010
Rabbi Avi Shafran: The gift of the ‘prayer bomber’
Steven Emerson: Why Religious Freedom Commission is under attack
Feb. 23, 2010
Dennis Prager: Government, Yes! The Divine and Parents, No!
JWisdom.com The Last Laugh of Enlightenment with Rabbi Yaakov Asher Sinclair ( 5 MINUTES)
Anne Applebaum: Prepare for war with Iran --- in case Israel strikes
Feb. 22, 2010
Rabbi Yonason Goldson: Is it not refreshing Tiger Woods' career has crashed and burned so dramatically?
JWisdom.com Esther and the third Truth with Rabbi David Aaron ( 9 MINUTES)
Kelly Brewington: Going smoke-free may raise diabetes risk
Feb. 19, 2010
Rabbi David Aaron: Is the Divine beyond us or within us?
JWisdom.com Olympic Faith with Rabbi Sroy Levitansky ( 5 MINUTES)
Caroline B. Glick: Israel and the West are perpetrators of a myth that endangers the Jewish State
Feb. 18, 2010
Cal Thomas: Who is Rashad Hussain?
JWisdom.com A Wedding Disaster to Remember with Rabbi Y.Y. Rubinstein ( 3 MINUTES)
Feb. 17, 2010
JWisdom.com Think your life is messed up? with Rabbi David Aaron ( 11 MINUTES)
Greg Logan: 'Greatest Jewish sporting event of all time since David versus Goliath' may be postponed because of bar mitzvah
Feb. 16, 2010
Anya Martin : Boy's 'cerebral palsy' fixed with diet
JWisdom.com Feet On The Street Spirituality with Gavriel Aryeh Sanders ( 8 MINUTES)
Marty Peretz: Let Europe Mind Its Own Business. It Brings Nothing To The Table Save For Mischief
Feb. 15, 2010
Herb Geduld: Lincoln and the Jews
JWisdom.com Are Our Children Really Ours? with Rabbi Mordechai Becher ( 5 MINUTES)
Susan King: 'Wolf Man' reflected writer's wartime Jewish experience

Jewish World Review May 19, 2005 / 10 Iyar, 5765

The ongoing muddle of U.S.-Chinese trade

By George Friedman


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http://www.JewishWorldReview.com | The United States has told China that it expects a revaluation of the yuan within six months. This comes on top of moves to limit the import of Chinese textiles into the United States and discussion in Europe of a similar move. In response, Chinese Premier Wen Jiabao said May 16 that China's exchange rate is the concern of China, a sovereign country, and that Beijing will not bow to foreign pressure to let its currency rise.

The pressure of Chinese exports on the United States is becoming unsupportable. Economists like to think it's all about economics, but it isn't, except in a particular micro way. Export surges do not affect all Americans similarly: Some are enriched by it, others benefit from lower-priced exports, and still others can be completely devastated. Economic effects are not equally distributed, but are confined to particular sectors and regions.

In economic theory — or fantasy — the ideal solution is to accept the low-cost imports, abandon the affected industries and move on. In the long run or in some moral sense, that might be a good idea. In reality, though, that just isn't how the world works. Those who are being devastated do not respond at the economic table. They move to the political table, where they bring pressure on the government to protect them.

For a small group that profits immensely from China trade, there is a motivation to fight back. For the vast majority (think Wal-Mart shoppers) who enjoy Chinese exports, the motivation on an individual level is much smaller or nonexistent. But if the size and strategic position of the major losers reaches critical mass, the government will start shifting policy. That is what is happening now, and it was unavoidable.

The dilemma is that the Chinese have their own problems. Logically, they could defuse the situation by reducing export pressures on the United States: They have a huge economic pie, and they could give up a bit. Except that they can't. The Chinese financial system is a shambles, and Beijing needs the massive outflow of exports to support the system. In this case, while cutting exports makes political sense, it doesn't make economic sense. Not only can China not reduce the export surge, Beijing wants to increase it. Plus, it has its own sectoral and regional problems. Unemployment has caused substantial unrest in China; exports keep people at work.

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Now, the pressure from the United States is not nearly as great as it looks. Giving China six months to revalue is the same as giving it forever. Who knows what things will look like in six weeks? Put another way, the Bush administration told the Chinese that they have six months before they have to do something. The administration does not want a confrontation with China, so Washington made a nasty face at the Chinese and gave them a long deadline.

But the administration is not in control of the situation, and neither are the Chinese. Political pressure is mounting for President George W. Bush, and he is not strong enough to resist it. He has other places to spend his political capital. Beijing is not in control of the situation, so it cannot cut exports or revalue the yuan easily. The two major powers have limited room for maneuver.

The Chinese do not really believe the Americans will take effective action. The Americans cannot believe that the Chinese won't, in the event, revalue. Both may be right. Some revaluation is possible, and U.S. trade sanctions rarely bite. There are too many other ways to sell things to the United States — say, through Europe as repackaged goods.

What is important now is to compare the economic atmosphere of a year ago to the atmosphere today, and observe the trend lines. The situation is deteriorating, and things are being said at the official level that never would have been said a year ago. This is getting interesting indeed.

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George Friedman is chairman of Strategic Forecasting, Inc., dubbed by Barron's as "The Shadow CIA," it's one of the world's leading global intelligence firms, providing clients with geopolitical analysis and industry and country forecasts to mitigate risk and identify opportunities. Stratfor's clients include Fortune 500 companies and major governments.


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