If the barriers become too steep and attempted interference in the value of the renminbi becomes too high handed, the Chinese may decide they have nothing to lose by expressing their displeasure.
In any case, trade is gradually being shifted towards Europe. Europe can't quite fill the gap, but Euro-trade gives the Chinese an alternative market and another incentive to dump the dollar, which is drifting downwards in value even if they don't decide on the nuclear option.
If they hold on for too long they won't be left with much, so - like everyone else who has stocked up on dollar securities - the question isn't so much if, but when.
And neither side (China or US) imo understands the other. The US political capital conglomerates have, apparently, no understanding of social value, and the Chinese Communist Party has no understanding of the recursive Love-Me numbers that rule the minds of the US financial markets.
The 'rational' win-lose estimations of game theory are less illuminating when each player thinks that they are in a different game, but I think they will govern play anyway.
The other interesting factor that will play a part is the wildcard of dollar-based oil trading. In a one dimensional view, the insatiable energy demand of China is satisfied more cheaply as the dollar goes down. You can't be me, I'm taken
the Chinese Communist Party has no understanding of the recursive Love-Me numbers that rule the minds of the US financial markets.
Last year China's trade deficit with the United States reached $233 billion, up from $202 billion in 2005. In the first four months of this year, the most recent figures available, the gap has widened by an additional 16 percent. China's trade gap with Europe is expanding at an even faster rate. In the 12 months leading up to May, China ran a $216.7 billion surplus with Europe. May's $22.45 billion figure was the third-highest monthly surplus on record and a 73 percent increase over the previous year's figure.
China's trade gap with Europe is expanding at an even faster rate. In the 12 months leading up to May, China ran a $216.7 billion surplus with Europe. May's $22.45 billion figure was the third-highest monthly surplus on record and a 73 percent increase over the previous year's figure.
I had done the numbers for 2006 but cannot dig them up right now, but European exports to China are a lot bigger than America's.
Some numbers here but with no aggregate EU numbers. In the long run, we're all dead. John Maynard Keynes
Exports: $963.0 billion (2006) Exports - partners: US 21.0%, EU 18.1%, Hong Kong 17.0%, Japan 12.4%, ASEAN 7.2%, South Korea 4.7% (2004) Imports: $795.0 billion (2006) Imports - partners: Japan 16.8%, EU 12.4%, ASEAN 11.2%, South Korea 11.1%, US 7.9%, Russia 2.2% (2004)
Imports: $795.0 billion (2006) Imports - partners: Japan 16.8%, EU 12.4%, ASEAN 11.2%, South Korea 11.1%, US 7.9%, Russia 2.2% (2004)
Not directly usable. In the long run, we're all dead. John Maynard Keynes
lots of numbers and graphs. In the long run, we're all dead. John Maynard Keynes
2007 CIA World Factbook (2006 estimates) shows Europe barely a blip on the screen. 21% of Chinese exports go to the US, and a further 16% to Hong Kong which is likely transhipment rather than consumption, again largely to the US.
And that's mushroomed from $11 billion in 1989, to almost $300 billion now. Yet, the EU27 is still a larger source of imports (by value) than China.
The US DOC maintains a detailed database of US trade statistics.
Does the EU mantain something similiar? And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
