Aghast and Adrift: a Change in the Current

Not neccessarily in the order the Editors would have liked.

...lawmakers stressed caution. "We must be thoughtful in our actions and get it right," said Senator Charles E. Grassley, Republican of Iowa and chairman of the Finance Committee. "We can't afford to act rashly, and get it wrong."

Senator Jim Bunning, Republican of Kentucky, complained that the administration had made little progress in prodding China over its trade and currency policies. "They've kind of told us to take a hike," Mr. Bunning said.

"What the administration wants to do is avoid putting all these issues together into what some would want to call a single 'coherent' China policy,' " he said. "A 'coherent' policy would probably be one that sees China as an emerging adversary."

No it wouldn't, but that's what Karl Rove, John Bolton, and Dick Cheney would like you to think is the only kind of coherence America has.

The problem?

...the political debate about China is lagging behind events on the ground. The $18 billion bid for Unocal by the China National Offshore Oil Corporation ( CNOOC), China's third-largest oil company, was merely the latest and by far the biggest move by a Chinese company to buy a formidable American company.

The move represents an evolution for China from being a major exporter, using its earnings to acquire Treasury securities, to becoming a significant foreign investor in hard assets as well.

...For months, many lawmakers in both parties have become almost frantic about China's soaring trade surplus and its impact on American manufacturers. Anxiety is so high that Republican lawmakers from industrial states like Ohio and Pennsylvania are loath to vote for anything that sounds like a free-trade agreement.

But anxiety is at least as great about a disruption of American business ties to China.

"I think there is a reluctance to confront China," said Representative Phil English, a Republican from Pennsylvania and the leader of the Congressional steel caucus. "The problem is that many companies are depending on Chinese inputs and on imported goods to sell at retailers."

China is also a leading creditor of the United States; it acquired more than $200 billion of Treasury securities over the last year.

Moreover, China is already home to a growing number of American-owned factories, many of them exporting to the United States, and a large number of factories that are suppliers to American companies...

The negative trade balance is something the robber barons could care less about as long as they own the factories and exploit the cheap- often prison labor. The fat cats' problem is nicely summarized here. Unocal, the Company subsidiary of the Carlyle Group we gave Afghanistan to after 9-11, is basically an Asian company in China's back yard.

So they would like it themselves. They're being polite: they're offering more for it than Chevron did. Of course, if Chevron took over, it's still in the family.

That's the essence of the problem. The Chinese government directly backs all of its corporations, unlike the United States, where the corporations secretly control the government. So the Chinese government's been nibbling: "the committee permitted the $1.75 billion sale of I.B.M.'s personal computer business to Lenovo of China." Now Team Xinhua's starting to take big bites of the pie owned by the owners of Bu$hCo.

And if we piss them off, why, they simply cash in all their Treasury bonds.

Cleaning out the Treasury, and the cash cow the Carlyle Group depends on.

The Saudis are likely pissing blood right now and wondering about their hot date.

John Bolton is, too.

The rest of the world? If the United States insists on letting a crowd of oligarchs take it over, and the World has to choose between Chinese oligarchs and Bu$hCo 'Murikan oligarchs, it seems Team Xinhua wins the popularity contest in many circles.

Why?

It's something to do with the fact China doesn't start pre-emptive wars against other nations. Nor has it ever dropped an nuke on anyone. Things like that get you talked about.