September 23, 2010
By DAVID BROOKS
One of the oddities of the current moment is that the country wants a radical change in government but not a radical change in policy.
On the one hand, voters are completely disgusted with Washington. On the other hand, they have not changed their fundamental views on the issues. There has been some shift to the right over the past two years, but the policy landscape looks mostly the way it did over the last few decades. We’re still a closely divided nation; it’s just that we’re angrier about it.
The result is that over the next two years we’ll probably see gridlock on stilts. The energized Republicans will try to reduce the size of government, but they won’t be able to get their bills past President Obama. The surviving Democrats will try to expand government programs, but they will run smack into a closely divided Senate and possibly a Republican-controlled House.
Unable to do anything in the short term, both parties will devote their energies to nothing but campaign gestures for 2012. The rhetoric will fly. Childishness will mount. Public nausea will hit an all-time high.
Somewhere in the country, though, there is a politician who is going to try to lead us out of this logjam. Whoever that person is, I hope he or she is listening carefully to what the public is saying. Because when you listen carefully, you notice the public anger doesn’t quite match the political class anger. The political class is angry about ideological things: bloated government or the predatory rich. The public seems to be angry about values.
The heart of any moral system is the connection between action and consequences. Today’s public anger rises from the belief that this connection has been severed in one realm after another.
Financiers send the world into recession and don’t seem to suffer. Neighbors take on huge mortgages and then just walk away when they go underwater. Washington politicians avoid living within their means. Federal agencies fail and get rewarded with more responsibilities.
What the country is really looking for is a restoration of responsibility. If some smart leader is going to help us get out of ideological gridlock, that leader will reframe politics around this end.
Philip K. Howard has thought hard about the decay of responsibility and what can be done to reverse it. In a series of books ranging from “The Death of Common Sense” to “Life Without Lawyers,” Howard has detailed the ways our political and legal systems undermine personal responsibility.
Over the past several decades, he argues, a thicket of spending obligations, rules and regulations has arisen, which limits individual discretion, narrows room for maneuver and makes it harder to assign responsibility.
Presidents find that more and more of their budgets are precommitted to entitlement spending. Cabinet secretaries find that their agenda can’t really be enacted because 100 million words of existing federal rules and statutes prevent innovation this way and that. Even when a new law is passed, it’s very hard to tell who is responsible for executing it because there is a profusion of agencies and bureaucratic levels all with some share of the pie.
These things weaken individual initiative, discretion and responsibility. But the decay expands well beyond Washington. Teachers don’t really control their classrooms. They have to obey a steady stream of mandates that govern everything from how they treat an unruly child to the way they teach. Doctors don’t really control their practices but must be wary of a capricious malpractice system that could strike at any moment. Local government officials don’t really govern their towns. Their room for maneuver is sharply constrained by federal mandates and by the steady stream of lawsuits that push them in ways defying common sense.
What’s needed, Howard argues, is a great streamlining. He’s not calling for deregulation. It’s about giving teachers, doctors and officials the power to actually make decisions and then holding them accountable. Some of their choices will be wrong, Howard acknowledges, but it is better to live in an imperfect world of individual responsibility than it is to live within a dehumanizing legal thicket that seeks to eliminate risk through a tangle of micromanaging statutes.
Howard proposes expanding specialized health courts, which would be more predictable than the malpractice system. He would lift controls on teachers and civil servants — giving them more freedom but then ending tenure and holding them accountable. He would create commissions to eliminate obsolete laws. He would expand judges’ discretion and end mandatory sentencing.
Howard’s agenda raises some thorny issues. But he has seized the crucial theme of the moment. If bad government undermines responsibility then it should be restructured. And he’s offering one tool a creative politician could use to break through the logjam and help us avoid a truly awful few years.
NYT: Management Shuffle Seen at HSBC
September 23, 2010
By LANDON THOMAS Jr. and JULIA WERDIGIER
LONDON — The chief executive of HSBC, Michael Geoghegan, is expected to step down after failing to be promoted to the chairman’s job, a surprise development that has rattled a bank not generally known for boardroom intrigue.
Mr. Geoghegan is to be replaced by Stuart Gulliver, who currently runs HSBC’s investment banking business, according to a person with direct knowledge of the plan, who declined to be identified until the decision was made public.
While such sharp-elbowed tussles are common on Wall Street, they are unusual for tradition-bound HSBC, a global behemoth with roots dating to the heyday of the British Empire. They also underscore the extent to which bank boards have become sensitive to corporate governance issues in choosing leaders.
The shakeup is unlikely to affect the bank’s strategy, however, which has been to move away from its disastrous foray into the U.S. subprime market and expand its already substantial operations in Hong Kong, mainland China and elsewhere in emerging Asia.
“The strategy doesn’t look like it’s going to change, so that will calm investors,” said Keith Bowman, an analyst at the asset management firm Hargreaves Lansdown in London.
Mr. Geoghegan recently moved to Hong Kong to head the bank’s shift in focus toward Asia. He had received credit for having maintained the bank’s profitability during the financial crisis better than its peers.
But the ambitious and quick-tempered Mr. Geoghegan was resisting a move by a board succession committee to appoint a chairman from outside the bank’s ranks. That would have broken a longstanding precedent at HSBC of chief executives’ moving directly up to the role of chairman.
The issue came to a head two weeks ago when the current chairman, Stephen Green, said he was stepping down for a job as trade minister in the new British government, ending a 28-year career at the bank.
Over the past few months, John Thornton, a former Goldman Sachs president who recently joined HSBC’s U.S. operations as a nonexecutive chairman, had emerged as a leading candidate to take the overall chairman’s job, which is still based in London.
The chairman still has an executive role, but responsibility for the main strategic decisions has shifted over the past year toward the chief executive. Still, Mr. Geoghegan dug in, and the board succession committee began to look for other options.
It appears to have settled on Douglas Flint, the chief financial officer, as chairman based in London, according to the person with direct knowledge of the matter. The chief executive’s post would remain in Hong Kong.
HSBC’s board is scheduled to meet in Shanghai on Tuesday and is expected to vote on the appointments then.
“There seems to be an underlying sentiment that now may be a good time for a new management,” Mr. Bowman said. “There’s also an element of fatigue, and it seems banks are through the worst and now is a time to step aside and let someone else do the job.”
HSBC shares were up slightly in midday London trading.
The changes are the latest in a series at London-based banks. Earlier this month, Robert E. Diamond Jr. was named to replace John Varley as chief executive of Barclays, and Eric Daniels, the chief executive of Lloyds, has said he will step down at the end of the year.
For the ever-striving Mr. Thornton, the near miss with HSBC is certainly a blow.
Earlier this decade, Mr. Thornton, as president of Goldman Sachs, missed out on the top job there when Henry M. Paulson Jr. passed him by, prompting his departure. Since then, Mr. Thornton has thrown his considerable energies into China, teaching at a university and advising corporations and politicians there.
The HSBC chairmanship would have been a coup, giving him a substantial corporate platform with one of the most globally oriented financial institutions.
While Mr. Gulliver is an investment banker by trade, he does not typify the risk-happy, larger-than-life mold set by Mr. Diamond — a prototype that has set political teeth on edge in Britain amid concerns that Barclays would become beholden to the big bets taken by its bankers and traders. In fact, since taking the helm of the bank’s markets division in 2006, Mr. Gulliver has worked on aligning investment banking efforts with the group’s broader focus of continuing to expand in emerging markets.
And in so doing, he has reversed an earlier course set by the bank to build up a U.S.-style investment institution by hiring banking superstars, most notoriously John Studzinski, a former Morgan Stanley banker who for a period shared the title of investment banking head with Mr. Gulliver before he left to join the Blackstone Group.
As with Barclays, the investment bank — called global banking and markets — drove profitability at HSBC, generating half of the group’s pretax profit through the first six months of last year. But with the focus on emerging markets, as opposed to U.S. capital markets, the risk profile for the division is lower.
Still, Mr. Gulliver, 51, a Briton who has worked at the bank since 1980, was paid £9 million, or more than $14 million at current rates, in shares last year, along with a base of £826,000, making him the highest-paid banker at HSBC.
As for Mr. Flint, he is a well-regarded executive whose tight grip on the bank’s finances should make him an appealing chairman for investors.
What remains unclear is the extent to which the boardroom divisions will heal over time. Mr. Thornton, in addition to his position in the United States, is a group director and head of the remuneration committee, and it is uncertain how his having narrowly missed out on the job would affect his fiduciary duty as a board member.
What is more, by having two longtime executives running the bank, HSBC runs the risk of being seen as having a less independent board than its main peers in London, Barclays and Lloyds, both of which have chairman who have not held executive positions at the banks they preside over.
“The decision to settle a bitter succession battle by appointing two insiders to top positions is a troubling reminder that an ‘independent board’ remains more hope than reality in financial services giants such as HSBC,” said James Post, a professor of corporate governance at Boston University school of management.
By LANDON THOMAS Jr. and JULIA WERDIGIER
LONDON — The chief executive of HSBC, Michael Geoghegan, is expected to step down after failing to be promoted to the chairman’s job, a surprise development that has rattled a bank not generally known for boardroom intrigue.
Mr. Geoghegan is to be replaced by Stuart Gulliver, who currently runs HSBC’s investment banking business, according to a person with direct knowledge of the plan, who declined to be identified until the decision was made public.
While such sharp-elbowed tussles are common on Wall Street, they are unusual for tradition-bound HSBC, a global behemoth with roots dating to the heyday of the British Empire. They also underscore the extent to which bank boards have become sensitive to corporate governance issues in choosing leaders.
The shakeup is unlikely to affect the bank’s strategy, however, which has been to move away from its disastrous foray into the U.S. subprime market and expand its already substantial operations in Hong Kong, mainland China and elsewhere in emerging Asia.
“The strategy doesn’t look like it’s going to change, so that will calm investors,” said Keith Bowman, an analyst at the asset management firm Hargreaves Lansdown in London.
Mr. Geoghegan recently moved to Hong Kong to head the bank’s shift in focus toward Asia. He had received credit for having maintained the bank’s profitability during the financial crisis better than its peers.
But the ambitious and quick-tempered Mr. Geoghegan was resisting a move by a board succession committee to appoint a chairman from outside the bank’s ranks. That would have broken a longstanding precedent at HSBC of chief executives’ moving directly up to the role of chairman.
The issue came to a head two weeks ago when the current chairman, Stephen Green, said he was stepping down for a job as trade minister in the new British government, ending a 28-year career at the bank.
Over the past few months, John Thornton, a former Goldman Sachs president who recently joined HSBC’s U.S. operations as a nonexecutive chairman, had emerged as a leading candidate to take the overall chairman’s job, which is still based in London.
The chairman still has an executive role, but responsibility for the main strategic decisions has shifted over the past year toward the chief executive. Still, Mr. Geoghegan dug in, and the board succession committee began to look for other options.
It appears to have settled on Douglas Flint, the chief financial officer, as chairman based in London, according to the person with direct knowledge of the matter. The chief executive’s post would remain in Hong Kong.
HSBC’s board is scheduled to meet in Shanghai on Tuesday and is expected to vote on the appointments then.
“There seems to be an underlying sentiment that now may be a good time for a new management,” Mr. Bowman said. “There’s also an element of fatigue, and it seems banks are through the worst and now is a time to step aside and let someone else do the job.”
HSBC shares were up slightly in midday London trading.
The changes are the latest in a series at London-based banks. Earlier this month, Robert E. Diamond Jr. was named to replace John Varley as chief executive of Barclays, and Eric Daniels, the chief executive of Lloyds, has said he will step down at the end of the year.
For the ever-striving Mr. Thornton, the near miss with HSBC is certainly a blow.
Earlier this decade, Mr. Thornton, as president of Goldman Sachs, missed out on the top job there when Henry M. Paulson Jr. passed him by, prompting his departure. Since then, Mr. Thornton has thrown his considerable energies into China, teaching at a university and advising corporations and politicians there.
The HSBC chairmanship would have been a coup, giving him a substantial corporate platform with one of the most globally oriented financial institutions.
While Mr. Gulliver is an investment banker by trade, he does not typify the risk-happy, larger-than-life mold set by Mr. Diamond — a prototype that has set political teeth on edge in Britain amid concerns that Barclays would become beholden to the big bets taken by its bankers and traders. In fact, since taking the helm of the bank’s markets division in 2006, Mr. Gulliver has worked on aligning investment banking efforts with the group’s broader focus of continuing to expand in emerging markets.
And in so doing, he has reversed an earlier course set by the bank to build up a U.S.-style investment institution by hiring banking superstars, most notoriously John Studzinski, a former Morgan Stanley banker who for a period shared the title of investment banking head with Mr. Gulliver before he left to join the Blackstone Group.
As with Barclays, the investment bank — called global banking and markets — drove profitability at HSBC, generating half of the group’s pretax profit through the first six months of last year. But with the focus on emerging markets, as opposed to U.S. capital markets, the risk profile for the division is lower.
Still, Mr. Gulliver, 51, a Briton who has worked at the bank since 1980, was paid £9 million, or more than $14 million at current rates, in shares last year, along with a base of £826,000, making him the highest-paid banker at HSBC.
As for Mr. Flint, he is a well-regarded executive whose tight grip on the bank’s finances should make him an appealing chairman for investors.
What remains unclear is the extent to which the boardroom divisions will heal over time. Mr. Thornton, in addition to his position in the United States, is a group director and head of the remuneration committee, and it is uncertain how his having narrowly missed out on the job would affect his fiduciary duty as a board member.
What is more, by having two longtime executives running the bank, HSBC runs the risk of being seen as having a less independent board than its main peers in London, Barclays and Lloyds, both of which have chairman who have not held executive positions at the banks they preside over.
“The decision to settle a bitter succession battle by appointing two insiders to top positions is a troubling reminder that an ‘independent board’ remains more hope than reality in financial services giants such as HSBC,” said James Post, a professor of corporate governance at Boston University school of management.
NYT: Downhill With the G.O.P.By PAUL KRUGMAN
September 23, 2010
Once upon a time, a Latin American political party promised to help motorists save money on gasoline. How? By building highways that ran only downhill.
I’ve always liked that story, but the truth is that the party received hardly any votes. And that means that the joke is really on us. For these days one of America’s two great political parties routinely makes equally nonsensical promises. Never mind the war on terror, the party’s main concern seems to be the war on arithmetic. And this party has a better than even chance of retaking at least one house of Congress this November.
Banana republic, here we come.
On Thursday, House Republicans released their “Pledge to America,” supposedly outlining their policy agenda. In essence, what they say is, “Deficits are a terrible thing. Let’s make them much bigger.” The document repeatedly condemns federal debt — 16 times, by my count. But the main substantive policy proposal is to make the Bush tax cuts permanent, which independent estimates say would add about $3.7 trillion to the debt over the next decade — about $700 billion more than the Obama administration’s tax proposals.
True, the document talks about the need to cut spending. But as far as I can see, there’s only one specific cut proposed — canceling the rest of the Troubled Asset Relief Program, which Republicans claim (implausibly) would save $16 billion. That’s less than half of 1 percent of the budget cost of those tax cuts. As for the rest, everything must be cut, in ways not specified — “except for common-sense exceptions for seniors, veterans, and our troops.” In other words, Social Security, Medicare and the defense budget are off-limits.
So what’s left? Howard Gleckman of the nonpartisan Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.”
The “pledge,” then, is nonsense. But isn’t that true of all political platforms? The answer is, not to anything like the same extent. Many independent analysts believe that the Obama administration’s long-run budget projections are somewhat too optimistic — but, if so, it’s a matter of technical details. Neither President Obama nor any other leading Democrat, as far as I can recall, has ever claimed that up is down, that you can sharply reduce revenue, protect all the programs voters like, and still balance the budget.
And the G.O.P. itself used to make more sense than it does now. Ronald Reagan’s claim that cutting taxes would actually increase revenue was wishful thinking, but at least he had some kind of theory behind his proposals. When former President George W. Bush campaigned for big tax cuts in 2000, he claimed that these cuts were affordable given (unrealistic) projections of future budget surpluses. Now, however, Republicans aren’t even pretending that their numbers add up.
So how did we get to the point where one of our two major political parties isn’t even trying to make sense?
The answer isn’t a secret. The late Irving Kristol, one of the intellectual godfathers of modern conservatism, once wrote frankly about why he threw his support behind tax cuts that would worsen the budget deficit: his task, as he saw it, was to create a Republican majority, “so political effectiveness was the priority, not the accounting deficiencies of government.” In short, say whatever it takes to gain power. That’s a philosophy that now, more than ever, holds sway in the movement Kristol helped shape.
And what happens once the movement achieves the power it seeks? The answer, presumably, is that it turns to its real, not-so-secret agenda, which mainly involves privatizing and dismantling Medicare and Social Security.
Realistically, though, Republicans aren’t going to have the power to enact their true agenda any time soon — if ever. Remember, the Bush administration’s attack on Social Security was a fiasco, despite its large majority in Congress — and it actually increased Medicare spending.
So the clear and present danger isn’t that the G.O.P. will be able to achieve its long-run goals. It is, rather, that Republicans will gain just enough power to make the country ungovernable, unable to address its fiscal problems or anything else in a serious way. As I said, banana republic, here we come.
Once upon a time, a Latin American political party promised to help motorists save money on gasoline. How? By building highways that ran only downhill.
I’ve always liked that story, but the truth is that the party received hardly any votes. And that means that the joke is really on us. For these days one of America’s two great political parties routinely makes equally nonsensical promises. Never mind the war on terror, the party’s main concern seems to be the war on arithmetic. And this party has a better than even chance of retaking at least one house of Congress this November.
Banana republic, here we come.
On Thursday, House Republicans released their “Pledge to America,” supposedly outlining their policy agenda. In essence, what they say is, “Deficits are a terrible thing. Let’s make them much bigger.” The document repeatedly condemns federal debt — 16 times, by my count. But the main substantive policy proposal is to make the Bush tax cuts permanent, which independent estimates say would add about $3.7 trillion to the debt over the next decade — about $700 billion more than the Obama administration’s tax proposals.
True, the document talks about the need to cut spending. But as far as I can see, there’s only one specific cut proposed — canceling the rest of the Troubled Asset Relief Program, which Republicans claim (implausibly) would save $16 billion. That’s less than half of 1 percent of the budget cost of those tax cuts. As for the rest, everything must be cut, in ways not specified — “except for common-sense exceptions for seniors, veterans, and our troops.” In other words, Social Security, Medicare and the defense budget are off-limits.
So what’s left? Howard Gleckman of the nonpartisan Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.”
The “pledge,” then, is nonsense. But isn’t that true of all political platforms? The answer is, not to anything like the same extent. Many independent analysts believe that the Obama administration’s long-run budget projections are somewhat too optimistic — but, if so, it’s a matter of technical details. Neither President Obama nor any other leading Democrat, as far as I can recall, has ever claimed that up is down, that you can sharply reduce revenue, protect all the programs voters like, and still balance the budget.
And the G.O.P. itself used to make more sense than it does now. Ronald Reagan’s claim that cutting taxes would actually increase revenue was wishful thinking, but at least he had some kind of theory behind his proposals. When former President George W. Bush campaigned for big tax cuts in 2000, he claimed that these cuts were affordable given (unrealistic) projections of future budget surpluses. Now, however, Republicans aren’t even pretending that their numbers add up.
So how did we get to the point where one of our two major political parties isn’t even trying to make sense?
The answer isn’t a secret. The late Irving Kristol, one of the intellectual godfathers of modern conservatism, once wrote frankly about why he threw his support behind tax cuts that would worsen the budget deficit: his task, as he saw it, was to create a Republican majority, “so political effectiveness was the priority, not the accounting deficiencies of government.” In short, say whatever it takes to gain power. That’s a philosophy that now, more than ever, holds sway in the movement Kristol helped shape.
And what happens once the movement achieves the power it seeks? The answer, presumably, is that it turns to its real, not-so-secret agenda, which mainly involves privatizing and dismantling Medicare and Social Security.
Realistically, though, Republicans aren’t going to have the power to enact their true agenda any time soon — if ever. Remember, the Bush administration’s attack on Social Security was a fiasco, despite its large majority in Congress — and it actually increased Medicare spending.
So the clear and present danger isn’t that the G.O.P. will be able to achieve its long-run goals. It is, rather, that Republicans will gain just enough power to make the country ungovernable, unable to address its fiscal problems or anything else in a serious way. As I said, banana republic, here we come.
Dispute with Japan highlights China's foreign-policy power struggle
By John Pomfret
Washington Post Staff Writer
Friday, September 24, 2010; 7:43 AM
The increasingly bitter dispute between China and Japan over a small group of islands in the Pacific is heightening concerns in capitals across the globe over who controls China's foreign policy.
A new generation of officials in the military, key government ministries and state-owned companies has begun to define how China deals with the rest of the world. Emboldened by China's economic expansion, these officials are taking advantage of a weakened leadership at the top of the Communist Party to assert their interests in ways that would have been impossible even a decade ago.
It used to be that Chinese officials complained about the Byzantine decision-making process in the United States. Today, from Washington to Tokyo, the talk is about how difficult it is to contend with the explosion of special interests shaping China's worldview.
"Now we have to deal across agencies and departments and ministries," said a U.S. official who spoke on the condition of anonymity to discuss ties with China. "The relationship is extraordinarily complex."
Said a senior Japanese diplomat: "We, too, are often confused about China's intentions and who is calling the shots."
Japanese officials said the People's Liberation Army is responsible for the friction over the disputed island chain, known as the Senkakus in Japan and the Diaoyu islands in China. In early September, Japan's coast guard detained the captain of a Chinese fishing trawler, accusing him of ramming a Japanese coast guard vessel. In previous crises, China's Foreign Ministry has acted as a calming influence, but this time, Japanese diplomats said, the military led the charge.
China responded by demanding the captain's release, suspending talks, canceling the visits of Japanese schoolchildren and on Thursday arresting four Japanese who allegedly were taking photographs near a Chinese military installation.
In an apparent effort to defuse the escalating tensions, Japan announced Friday that it would release the Chinese captain.
Washington signaled to Beijing on Thursday that it would back Japan in the territorial dispute. Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters: "Obviously we're very, very strongly in support of . . . our ally in that region, Japan."
Other examples
The island dispute is the latest instance of players other than the party's central leadership driving China's engagement with the outside world.
Throughout this year, officials from the Ministry of Commerce, who represent China's exporters, have lobbied vociferously against revaluing China's currency, the yuan, despite calls to the contrary from the People's Bank of China and the Ministry of Finance.
In Iran, China's state-owned oil companies are pushing to do more business, even though Beijing backed enhanced U.N. sanctions against Tehran because of its alleged nuclear weapons program. The China National Offshore Oil Co. is in talks to ramp up its investment in the massive Azadegan oil field just as Japanese companies are backing out, senior diplomatic sources said. The move by CNOOC would have the effect of "gutting" the new sanctions, one diplomat said. U.S. officials have stressed to China that they do not want to see China's oil companies "filling in" as other oil companies leave, a senior U.S. official said.
China's main nuclear power corporation wants to build a one-gigawatt nuclear power plant in Pakistan even though it appears to be a violation of international guidelines forbidding nuclear exports to countries that have not signed onto the nuclear Non-Proliferation Treaty or do not have international safeguards on reactors. Pakistan has not signed the treaty.
"We have never had this situation before," said Huang Ping, the director of the Institute for American Studies at China's Academy of Social Sciences. "And it is troubling. We need more coordination among all agencies, including the military."
U.S. reaction
The U.S. government is trying to adapt to this new China with a mixture of honey and vinegar.
In July, Secretary of State Hillary Rodham Clinton talked tough with China about its claims to the whole of the South China Sea, joining with Vietnam and 10 other Southeast Asian nations to criticize China's recent aggressive behavior in that strategic waterway.
That message - that China should ensure freedom of the seas and negotiate disputed claims peacefully - is expected to be reinforced Friday when President Obama meets in New York with leaders from Southeast Asian nations. Several U.S. officials said the People's Liberation Army and China's state-owned oil companies had been driving China's more forceful claims to the sea.
U.S. officials have also moved to establish more personal connections with Chinese officials. Last month, Deputy Secretary of State James B. Steinberg, the second-ranking U.S. diplomat, spent a full day with Cui Tiankai, one of 12 assistant Chinese foreign ministers, taking him to the Inn at Little Washington, a restaurant in Virginia. The entourage proceeded to a 30-acre farm belonging to a senior State Department official, where Cui took a ride on a tractor. And in an attempt to engage more Chinese stakeholders than in the past, Clinton and Treasury Secretary Timothy F. Geithner led the largest-ever delegation of U.S. officials to Beijing in May.
Several factors account for the rise of competing interests. President Hu Jintao has led the Communist Party for eight years, but it is not clear that he has ever been fully in control. After Hu took power in 2002, his predecessor, Jiang Zemin, stayed on as chief of China's military for two years. And Hu was the top man in a nine-member Politburo standing committee, but at least five of the seats were occupied by Jiang's allies.
"This is a time when the Chinese government is weak," said Shen Dingli, the executive dean of the Center for American Studies at Fudan University in Shanghai. "As a result, different interest groups have been unleashed in a less coordinated and less centralized way."
Simultaneously, the influence of China's Foreign Ministry is waning. Dai Bingguo, the current foreign policy supremo has no seat on the powerful 25-member Politburo; the military has two, and the state-owned sector has at least one.
While there is competition across ministries in China, U.S. officials have focused on the gap between the civilian side of the government and the People's Liberation Army.
In recent months, military officers have begun to air their views on foreign policy matters, seeking to define China's interests in the seas around the country.
Gen. Ma Xiaotian, deputy chief of the army's general staff, has blasted the United States for its involvement in the South China Sea. And in August, Maj. Gen. Luo Yuan lashed out at the United States for reportedly planning to deploy the aircraft carrier USS George Washington in the Yellow Sea for joint exercises with South Korea. (The George Washington was subsequently sent to the Sea of Japan, farther from China.)
Countering military
Not all of the military statements went over well in China. In recent weeks, the Foreign Ministry has begun to push back against the military. In recent interviews in Beijing, officials and senior advisers to the government excoriated the military for making policy pronouncements.
"For me, it is surprising that I'm seeing a general from the People's Liberation Army making a public statement regarding foreign policy, but this is China today," said Wu Jianmin, a former ambassador who helps run a think tank and advises China's leadership on foreign policy.
"This is not something the military should do," said Chu Shulong, professor of international relations at Tsinghua University. "These people don't represent the government, but it creates international repercussions when they speak out."
China's media is another factor in the fracturing of China's foreign policy. Another foreign policy player, the Ministry of Propaganda, has allowed the state-run press to criticize foreign governments as a way to bolster the Communist Party's position at home. As a result, China's newer publications, such as the mass-circulation Global Times, cover international affairs - in particular relations with the United States and Japan - with all the verve that People magazine pours into the adventures of Paris Hilton.
"We are not happy about many of the stories published today," Wu said. "We Foreign Ministry people have told them you shouldn't do that, but they say, 'So what? Let the Americans hear a different voice.' "
Shen, the American studies scholar, said some in China's leadership may support the idea of sending mixed messages on foreign policy as a way of testing the United States or Japan.
"The civilian government may think it does no harm," he said. "After all, if they succeed, it may advance China's interests."
Washington Post Staff Writer
Friday, September 24, 2010; 7:43 AM
The increasingly bitter dispute between China and Japan over a small group of islands in the Pacific is heightening concerns in capitals across the globe over who controls China's foreign policy.
A new generation of officials in the military, key government ministries and state-owned companies has begun to define how China deals with the rest of the world. Emboldened by China's economic expansion, these officials are taking advantage of a weakened leadership at the top of the Communist Party to assert their interests in ways that would have been impossible even a decade ago.
It used to be that Chinese officials complained about the Byzantine decision-making process in the United States. Today, from Washington to Tokyo, the talk is about how difficult it is to contend with the explosion of special interests shaping China's worldview.
"Now we have to deal across agencies and departments and ministries," said a U.S. official who spoke on the condition of anonymity to discuss ties with China. "The relationship is extraordinarily complex."
Said a senior Japanese diplomat: "We, too, are often confused about China's intentions and who is calling the shots."
Japanese officials said the People's Liberation Army is responsible for the friction over the disputed island chain, known as the Senkakus in Japan and the Diaoyu islands in China. In early September, Japan's coast guard detained the captain of a Chinese fishing trawler, accusing him of ramming a Japanese coast guard vessel. In previous crises, China's Foreign Ministry has acted as a calming influence, but this time, Japanese diplomats said, the military led the charge.
China responded by demanding the captain's release, suspending talks, canceling the visits of Japanese schoolchildren and on Thursday arresting four Japanese who allegedly were taking photographs near a Chinese military installation.
In an apparent effort to defuse the escalating tensions, Japan announced Friday that it would release the Chinese captain.
Washington signaled to Beijing on Thursday that it would back Japan in the territorial dispute. Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters: "Obviously we're very, very strongly in support of . . . our ally in that region, Japan."
Other examples
The island dispute is the latest instance of players other than the party's central leadership driving China's engagement with the outside world.
Throughout this year, officials from the Ministry of Commerce, who represent China's exporters, have lobbied vociferously against revaluing China's currency, the yuan, despite calls to the contrary from the People's Bank of China and the Ministry of Finance.
In Iran, China's state-owned oil companies are pushing to do more business, even though Beijing backed enhanced U.N. sanctions against Tehran because of its alleged nuclear weapons program. The China National Offshore Oil Co. is in talks to ramp up its investment in the massive Azadegan oil field just as Japanese companies are backing out, senior diplomatic sources said. The move by CNOOC would have the effect of "gutting" the new sanctions, one diplomat said. U.S. officials have stressed to China that they do not want to see China's oil companies "filling in" as other oil companies leave, a senior U.S. official said.
China's main nuclear power corporation wants to build a one-gigawatt nuclear power plant in Pakistan even though it appears to be a violation of international guidelines forbidding nuclear exports to countries that have not signed onto the nuclear Non-Proliferation Treaty or do not have international safeguards on reactors. Pakistan has not signed the treaty.
"We have never had this situation before," said Huang Ping, the director of the Institute for American Studies at China's Academy of Social Sciences. "And it is troubling. We need more coordination among all agencies, including the military."
U.S. reaction
The U.S. government is trying to adapt to this new China with a mixture of honey and vinegar.
In July, Secretary of State Hillary Rodham Clinton talked tough with China about its claims to the whole of the South China Sea, joining with Vietnam and 10 other Southeast Asian nations to criticize China's recent aggressive behavior in that strategic waterway.
That message - that China should ensure freedom of the seas and negotiate disputed claims peacefully - is expected to be reinforced Friday when President Obama meets in New York with leaders from Southeast Asian nations. Several U.S. officials said the People's Liberation Army and China's state-owned oil companies had been driving China's more forceful claims to the sea.
U.S. officials have also moved to establish more personal connections with Chinese officials. Last month, Deputy Secretary of State James B. Steinberg, the second-ranking U.S. diplomat, spent a full day with Cui Tiankai, one of 12 assistant Chinese foreign ministers, taking him to the Inn at Little Washington, a restaurant in Virginia. The entourage proceeded to a 30-acre farm belonging to a senior State Department official, where Cui took a ride on a tractor. And in an attempt to engage more Chinese stakeholders than in the past, Clinton and Treasury Secretary Timothy F. Geithner led the largest-ever delegation of U.S. officials to Beijing in May.
Several factors account for the rise of competing interests. President Hu Jintao has led the Communist Party for eight years, but it is not clear that he has ever been fully in control. After Hu took power in 2002, his predecessor, Jiang Zemin, stayed on as chief of China's military for two years. And Hu was the top man in a nine-member Politburo standing committee, but at least five of the seats were occupied by Jiang's allies.
"This is a time when the Chinese government is weak," said Shen Dingli, the executive dean of the Center for American Studies at Fudan University in Shanghai. "As a result, different interest groups have been unleashed in a less coordinated and less centralized way."
Simultaneously, the influence of China's Foreign Ministry is waning. Dai Bingguo, the current foreign policy supremo has no seat on the powerful 25-member Politburo; the military has two, and the state-owned sector has at least one.
While there is competition across ministries in China, U.S. officials have focused on the gap between the civilian side of the government and the People's Liberation Army.
In recent months, military officers have begun to air their views on foreign policy matters, seeking to define China's interests in the seas around the country.
Gen. Ma Xiaotian, deputy chief of the army's general staff, has blasted the United States for its involvement in the South China Sea. And in August, Maj. Gen. Luo Yuan lashed out at the United States for reportedly planning to deploy the aircraft carrier USS George Washington in the Yellow Sea for joint exercises with South Korea. (The George Washington was subsequently sent to the Sea of Japan, farther from China.)
Countering military
Not all of the military statements went over well in China. In recent weeks, the Foreign Ministry has begun to push back against the military. In recent interviews in Beijing, officials and senior advisers to the government excoriated the military for making policy pronouncements.
"For me, it is surprising that I'm seeing a general from the People's Liberation Army making a public statement regarding foreign policy, but this is China today," said Wu Jianmin, a former ambassador who helps run a think tank and advises China's leadership on foreign policy.
"This is not something the military should do," said Chu Shulong, professor of international relations at Tsinghua University. "These people don't represent the government, but it creates international repercussions when they speak out."
China's media is another factor in the fracturing of China's foreign policy. Another foreign policy player, the Ministry of Propaganda, has allowed the state-run press to criticize foreign governments as a way to bolster the Communist Party's position at home. As a result, China's newer publications, such as the mass-circulation Global Times, cover international affairs - in particular relations with the United States and Japan - with all the verve that People magazine pours into the adventures of Paris Hilton.
"We are not happy about many of the stories published today," Wu said. "We Foreign Ministry people have told them you shouldn't do that, but they say, 'So what? Let the Americans hear a different voice.' "
Shen, the American studies scholar, said some in China's leadership may support the idea of sending mixed messages on foreign policy as a way of testing the United States or Japan.
"The civilian government may think it does no harm," he said. "After all, if they succeed, it may advance China's interests."
Xinhua: British economist: China has promising growth prospects
June-2-2010
China has promising growth prospects and should not be blamed for world imbalances, says Danny Quah, a renowned British economist.
"Emergency financing that was placed in the Chinese economy to counter the downturn from the 2008 global financial crisis was the right thing...The imbalances is a global problem, not a China problem," said Quah, a professor at the London School of Economics and Political Science.
China did the right thing in infusing its economy with fiscal stimulus, Quah said in a recent interview with Xinhua.
He also declined to describe the ballooning real estate prices as a bubble, pointing out "the strong fundamentals" of China's economy.
He said the expansion of China's housing construction will be proved useful eventually, given the fact that "China is still engaging in the task of moving hundreds of millions of people from rural areas to urban China to continue to power its manufacturing and industrial progress."
"So I would not describe it as a collapse of real estate bubble, we can look forward to a rationalization of housing and real estate prices," Quah said. "The improvement and expansion of housing stock will play an important role in continuing to move the Chinese economy forward."
"I think Chinese fundamentals will continue to be strong. And a little bit of high inflation, as long as it doesn't break out into some kind of runaway high inflation, is probably no bad thing," he said. "We will get it under control again as the Chinese government did previously."
On allegations that China deliberately keeps its currency RMB weak to obtain unfair advantages in trade with countries like the United States, Quah said people who draw such a false conclusion are misguided.
"The United States is running a trade deficit not just against China. It is running a trade deficit against almost 100 other countries," he said. "China is not unique in how it is exporting more to the United States than it's importing."
The U.S. government was beginning to run a large trade deficit long before China's trade surpluses started grow, he added.
"If you take the ratio of China's bilateral trade surplus against the U.S. as a fraction of the U.S.' overall bilateral trade deficit against all of the countries, it has remained constant over the last 15, 20 years," Quah said.
He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.
Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.
"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."
When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."
"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.
"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.
Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.
"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."
Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.
However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.
China has promising growth prospects and should not be blamed for world imbalances, says Danny Quah, a renowned British economist.
"Emergency financing that was placed in the Chinese economy to counter the downturn from the 2008 global financial crisis was the right thing...The imbalances is a global problem, not a China problem," said Quah, a professor at the London School of Economics and Political Science.
China did the right thing in infusing its economy with fiscal stimulus, Quah said in a recent interview with Xinhua.
He also declined to describe the ballooning real estate prices as a bubble, pointing out "the strong fundamentals" of China's economy.
He said the expansion of China's housing construction will be proved useful eventually, given the fact that "China is still engaging in the task of moving hundreds of millions of people from rural areas to urban China to continue to power its manufacturing and industrial progress."
"So I would not describe it as a collapse of real estate bubble, we can look forward to a rationalization of housing and real estate prices," Quah said. "The improvement and expansion of housing stock will play an important role in continuing to move the Chinese economy forward."
"I think Chinese fundamentals will continue to be strong. And a little bit of high inflation, as long as it doesn't break out into some kind of runaway high inflation, is probably no bad thing," he said. "We will get it under control again as the Chinese government did previously."
On allegations that China deliberately keeps its currency RMB weak to obtain unfair advantages in trade with countries like the United States, Quah said people who draw such a false conclusion are misguided.
"The United States is running a trade deficit not just against China. It is running a trade deficit against almost 100 other countries," he said. "China is not unique in how it is exporting more to the United States than it's importing."
The U.S. government was beginning to run a large trade deficit long before China's trade surpluses started grow, he added.
"If you take the ratio of China's bilateral trade surplus against the U.S. as a fraction of the U.S.' overall bilateral trade deficit against all of the countries, it has remained constant over the last 15, 20 years," Quah said.
He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.
Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.
"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."
When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."
"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.
"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.
Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.
"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."
Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.
However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.
Xinhua: IMF forecasts China's 2010 GDP growth to 10.5%
Xinhua, July 8, 2010
The International Monetary Fund ( IMF) lifted China's GDP growth forecast for 2010 to 10.5 percent from the earlier projection of 10 percent, the IMF said in a latest world economic outlook released on Thursday.
The body also revised the country's GDP growth projection for 2011 to 9.6 percent, down 0.3 percentage point from the previous estimate released in April.
With the revised figures, China still ranks first in terms of GDP growth among all economies listed in the World Economic Outlook Projections, followed by India, which is forecast to grow 9.4 percent in 2010 and 8.4 percent in 2011.
The IMF attributed the upward revision of China's 2010 GDP growth to the strong rebound in exports and resilient domestic demand so far this year in the country.
The organization said that China could take further measures to slow credit growth and maintain financial stability, and thus comes the lower growth estimate for 2011.
The International Monetary Fund ( IMF) lifted China's GDP growth forecast for 2010 to 10.5 percent from the earlier projection of 10 percent, the IMF said in a latest world economic outlook released on Thursday.
The body also revised the country's GDP growth projection for 2011 to 9.6 percent, down 0.3 percentage point from the previous estimate released in April.
With the revised figures, China still ranks first in terms of GDP growth among all economies listed in the World Economic Outlook Projections, followed by India, which is forecast to grow 9.4 percent in 2010 and 8.4 percent in 2011.
The IMF attributed the upward revision of China's 2010 GDP growth to the strong rebound in exports and resilient domestic demand so far this year in the country.
The organization said that China could take further measures to slow credit growth and maintain financial stability, and thus comes the lower growth estimate for 2011.
Xinhua: China has promising growth prospects: economist
Xinhua, June 2, 2010
China has promising growth prospects and should not be blamed for world imbalances, says Danny Quah, a renowned British economist.
"Emergency financing that was placed in the Chinese economy to counter the downturn from the 2008 global financial crisis was the right thing...The imbalances is a global problem, not a China problem," said Quah, a professor at the London School of Economics and Political Science.
China did the right thing in infusing its economy with fiscal stimulus, Quah said in a recent interview with Xinhua.
He also declined to describe the ballooning real estate prices as a bubble, pointing out "the strong fundamentals" of China's economy.
He said the expansion of China's housing construction will be proved useful eventually, given the fact that "China is still engaging in the task of moving hundreds of millions of people from rural areas to urban China to continue to power its manufacturing and industrial progress."
"So I would not describe it as a collapse of real estate bubble, we can look forward to a rationalization of housing and real estate prices," Quah said. "The improvement and expansion of housing stock will play an important role in continuing to move the Chinese economy forward."
"I think Chinese fundamentals will continue to be strong. And a little bit of high inflation, as long as it doesn't break out into some kind of runaway high inflation, is probably no bad thing," he said. "We will get it under control again as the Chinese government did previously."
On allegations that China deliberately keeps its currency RMB weak to obtain unfair advantages in trade with countries like the United States, Quah said people who draw such a false conclusion are misguided.
"The United States is running a trade deficit not just against China. It is running a trade deficit against almost 100 other countries," he said. "China is not unique in how it is exporting more to the United States than it's importing."
The U.S. government was beginning to run a large trade deficit long before China's trade surpluses started grow, he added.
"If you take the ratio of China's bilateral trade surplus against the U.S. as a fraction of the U.S.' overall bilateral trade deficit against all of the countries, it has remained constant over the last 15, 20 years," Quah said.
He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.
Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.
"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."
When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."
"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.
"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.
Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.
"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."
Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.
However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.
China has promising growth prospects and should not be blamed for world imbalances, says Danny Quah, a renowned British economist.
"Emergency financing that was placed in the Chinese economy to counter the downturn from the 2008 global financial crisis was the right thing...The imbalances is a global problem, not a China problem," said Quah, a professor at the London School of Economics and Political Science.
China did the right thing in infusing its economy with fiscal stimulus, Quah said in a recent interview with Xinhua.
He also declined to describe the ballooning real estate prices as a bubble, pointing out "the strong fundamentals" of China's economy.
He said the expansion of China's housing construction will be proved useful eventually, given the fact that "China is still engaging in the task of moving hundreds of millions of people from rural areas to urban China to continue to power its manufacturing and industrial progress."
"So I would not describe it as a collapse of real estate bubble, we can look forward to a rationalization of housing and real estate prices," Quah said. "The improvement and expansion of housing stock will play an important role in continuing to move the Chinese economy forward."
"I think Chinese fundamentals will continue to be strong. And a little bit of high inflation, as long as it doesn't break out into some kind of runaway high inflation, is probably no bad thing," he said. "We will get it under control again as the Chinese government did previously."
On allegations that China deliberately keeps its currency RMB weak to obtain unfair advantages in trade with countries like the United States, Quah said people who draw such a false conclusion are misguided.
"The United States is running a trade deficit not just against China. It is running a trade deficit against almost 100 other countries," he said. "China is not unique in how it is exporting more to the United States than it's importing."
The U.S. government was beginning to run a large trade deficit long before China's trade surpluses started grow, he added.
"If you take the ratio of China's bilateral trade surplus against the U.S. as a fraction of the U.S.' overall bilateral trade deficit against all of the countries, it has remained constant over the last 15, 20 years," Quah said.
He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.
Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.
"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."
When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."
"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.
"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.
Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.
"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."
Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.
However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.
Obama: China's growth is 'good for' U.S.
1 CommentsPrint E-mail Xinhua, September 21, 2010 Adjust font size: U.S. President Barack Obama said Monday that China's rapid economic development is in the interest of U.S. economy.
U.S. President Barack Obama hosts a press conference in the East Room of the White House in Washington D.C., capital of the United States, Sept. 10, 2010. [Xinhua]
"It's good for us that China has done well," Obama said at a town-hall-style meeting telecast live on CNBC before heading to Pennsylvania to raise money for a Democratic Senate candidate.
His address is in line with U.S. Secretary of Treasury Timothy Geithner's testimony to the Congress last Thursday.
"We have very significant economic interests in our relationship with China," Geithner said, "a strong and growing China benefits the United States, just as a strong and growing United States is good for China."
In responding to a question about China's currency issue, Obama said that China's currency is lower than the market says that it should be, but trade is in the benefit for both sides.
"I just want to make sure trade is good for American businesses and American workers," Obama said.
"We are going to continue to insist that on this issue, and on all trade issues between us and China, that it is a two-way street, " he said.
Facing November elections shaped by voter anger at the sour economy, U.S. lawmakers are weighing bills that would slap sanctions on Chinese goods, amid accusations that China keeps its currency -- and thereby its exports -- artificially cheap.
The Obama administration acknowledged that China's imports supported the global economy and contributed substantially to recovery around the world.
With over 1.3 billion people and an economy continuing to grow at or near double-digit rates, China is the U.S.' fastest-growing major overseas market.
China's record of bringing hundreds of millions out of poverty, building a rapidly growing middle class, and now its efforts to encourage growth led by domestic demand, ultimately mean more demand for American goods and services.
In order to pull the economy out of recession, Obama launched National Export Initiative (NEI) in March and set the goal of doubling the U.S. export in five years and creating two million jobs in the country.
The Obama administration is clear that the vast Chinese market is a crucial part to fulfill the goal.
"Increasing opportunities for U.S. firms and workers through expanded trade and investment with China will be an important part of the success of the President's National Export Initiative and our efforts to support job growth more broadly."
According to the Treasury Department, China is a critical market for a broad range of American products, from agriculture, to manufacturing, to services.
China was the largest market for U.S. soybeans last year, importing over 9 billion dollars.
In the manufacturing sector, the United States has already exported nearly 3.5 billion dollars in aircraft to China this year alone, and U.S. exports of automobiles and parts to China have grown over 200 percent.
The issues in China and U.S. economic relations and trade should be properly solved through consultations on an equal footing. Exerting pressure cannot solve the issue. Rather, it may lead to the contrary, China's Foreign Ministry said recently.
U.S. President Barack Obama hosts a press conference in the East Room of the White House in Washington D.C., capital of the United States, Sept. 10, 2010. [Xinhua]
"It's good for us that China has done well," Obama said at a town-hall-style meeting telecast live on CNBC before heading to Pennsylvania to raise money for a Democratic Senate candidate.
His address is in line with U.S. Secretary of Treasury Timothy Geithner's testimony to the Congress last Thursday.
"We have very significant economic interests in our relationship with China," Geithner said, "a strong and growing China benefits the United States, just as a strong and growing United States is good for China."
In responding to a question about China's currency issue, Obama said that China's currency is lower than the market says that it should be, but trade is in the benefit for both sides.
"I just want to make sure trade is good for American businesses and American workers," Obama said.
"We are going to continue to insist that on this issue, and on all trade issues between us and China, that it is a two-way street, " he said.
Facing November elections shaped by voter anger at the sour economy, U.S. lawmakers are weighing bills that would slap sanctions on Chinese goods, amid accusations that China keeps its currency -- and thereby its exports -- artificially cheap.
The Obama administration acknowledged that China's imports supported the global economy and contributed substantially to recovery around the world.
With over 1.3 billion people and an economy continuing to grow at or near double-digit rates, China is the U.S.' fastest-growing major overseas market.
China's record of bringing hundreds of millions out of poverty, building a rapidly growing middle class, and now its efforts to encourage growth led by domestic demand, ultimately mean more demand for American goods and services.
In order to pull the economy out of recession, Obama launched National Export Initiative (NEI) in March and set the goal of doubling the U.S. export in five years and creating two million jobs in the country.
The Obama administration is clear that the vast Chinese market is a crucial part to fulfill the goal.
"Increasing opportunities for U.S. firms and workers through expanded trade and investment with China will be an important part of the success of the President's National Export Initiative and our efforts to support job growth more broadly."
According to the Treasury Department, China is a critical market for a broad range of American products, from agriculture, to manufacturing, to services.
China was the largest market for U.S. soybeans last year, importing over 9 billion dollars.
In the manufacturing sector, the United States has already exported nearly 3.5 billion dollars in aircraft to China this year alone, and U.S. exports of automobiles and parts to China have grown over 200 percent.
The issues in China and U.S. economic relations and trade should be properly solved through consultations on an equal footing. Exerting pressure cannot solve the issue. Rather, it may lead to the contrary, China's Foreign Ministry said recently.
Xinhua: Chinese PM meets Obama
0 CommentsPrint E-mail Xinhua, September 24, 2010 Adjust font size: Chinese Premier Wen Jiabao met with U.S. President Barack Obama in New York on Thursday, focusing on bilateral ties and regional and world issues and calling for more cooperation.
Chinese Premier Wen Jiabao (L) meets with U.S. President Barack Obama in New York, the United States, Sept. 23, 2010. [Huang Jinwen/Xinhua]
China and the United States can deepen their cooperation on significant international affairs and major regional issues as well as on efforts to handle global financial woes and climate change, Wen said.
He said China and the United States could forge an even closer and wider-ranging trade and financial relationship.
At the beginning of the meeting, Wen said the China-U.S. relationship has advanced beyond the bilateral scope and has a major impact on the world.
The common interests of the two countries far outweigh their differences, Wen said.
Although there exist differences between China and the United States, the problems can be well solved through dialogue and cooperation, the premier said.
The meeting at the United Nations added to the increasing number of meetings held between Chinese and American leaders since Obama took office in 2009.
Obama, for his part, noted that since taking office, he has had good cooperation with the Chinese leadership. The United States will continue to enhance its ties with China on the basis of common interests and mutual respect, Obama added.
The two sides have already cooperated on a range of important issues, including the global financial crisis, and have also cooperated well under the G-20 framework, the president said.
With the global economic situation gradually restoring stability, Washington and Beijing need to consolidate cooperation to fight nuclear proliferation and climate change, Obama added.
"On economic terms, it is important for us to have frank discussion and to work cooperatively in order to achieve a type of more balanced and sustainable economic growth," the president said.
"We also have to work cooperatively together to achieve regional peace and stability" because the world regards the China-U.S. relationship as critical criteria on the whole range of security cooperation, he added.
The meeting arranged on the sidelines of U.N. conferences, was expected to improve bilateral ties and deepen mutual trust at a time when Sino-U.S. relations are clouded by trade arguments but dominated by both countries' willingness to cooperate.
Wen arrived in New York on Tuesday evening to attend a series of U.N. meetings.
Chinese Premier Wen Jiabao (L) meets with U.S. President Barack Obama in New York, the United States, Sept. 23, 2010. [Huang Jinwen/Xinhua]
China and the United States can deepen their cooperation on significant international affairs and major regional issues as well as on efforts to handle global financial woes and climate change, Wen said.
He said China and the United States could forge an even closer and wider-ranging trade and financial relationship.
At the beginning of the meeting, Wen said the China-U.S. relationship has advanced beyond the bilateral scope and has a major impact on the world.
The common interests of the two countries far outweigh their differences, Wen said.
Although there exist differences between China and the United States, the problems can be well solved through dialogue and cooperation, the premier said.
The meeting at the United Nations added to the increasing number of meetings held between Chinese and American leaders since Obama took office in 2009.
Obama, for his part, noted that since taking office, he has had good cooperation with the Chinese leadership. The United States will continue to enhance its ties with China on the basis of common interests and mutual respect, Obama added.
The two sides have already cooperated on a range of important issues, including the global financial crisis, and have also cooperated well under the G-20 framework, the president said.
With the global economic situation gradually restoring stability, Washington and Beijing need to consolidate cooperation to fight nuclear proliferation and climate change, Obama added.
"On economic terms, it is important for us to have frank discussion and to work cooperatively in order to achieve a type of more balanced and sustainable economic growth," the president said.
"We also have to work cooperatively together to achieve regional peace and stability" because the world regards the China-U.S. relationship as critical criteria on the whole range of security cooperation, he added.
The meeting arranged on the sidelines of U.N. conferences, was expected to improve bilateral ties and deepen mutual trust at a time when Sino-U.S. relations are clouded by trade arguments but dominated by both countries' willingness to cooperate.
Wen arrived in New York on Tuesday evening to attend a series of U.N. meetings.
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