US and China

It appears that China was quite upset over the debt ceiling debate in the Congress, and the fact that our politicians couldn't come to an agreement. This shouldn't surprise anyone, considering how poorly the Chinese stock markets did during that debating period or right afterwards when S&P downgraded US Debt. Nor should we be surprised that one of China's credit rating agencies decided to go ahead and downgrade the credit rating of US treasuries a week before S&P.

There was an interesting article in Industry Week on August 3, 2011 titled; "China Isn't Satisfied With U.S. Debt Deal - In a blistering commentary, China's official news agency says the deal did nothing to curb America's addiction to borrowing," by Allison Jackson, AFP. The article stated:

"China warned that tortured efforts to raise the U.S. limit on borrowing failed to defuse Washington's "debt bomb," & said it will diversify its holdings away from the dollar. Obama signed the debt deal, but in a blistering commentary, China's official Xinhua news agency ridiculed the U.S. political process and warned that the deal had done nothing to change the country's addiction to borrowing."

Obviously, China wants the US to keep spending on certain things which will flow dollars into their exports, but wants the US to drastically cut our military, and are willing to use any and all possible international rhetoric and tactics to see that's what happens. China would be better off if we kept giving more money to our citizens through social programs, so they can keep buying Chinese goods.

Funding money to our military does not help China, as it actually makes things tougher in the future on China as they go on a worldwide global scavenger hunt for raw materials and oil, pushing their weight around, and securing their outer territories (String of Pearls theory). China doesn't want the United States to get involved in the South China Sea, or the Taiwan Straits. China also doesn't want the United States involves with South Korea preventing North Korea from pushing their agenda either.

China doesn't want the United States telling it how much pollution or CO2 it can put into the atmosphere, how much fishing it can do, or how big it's dead zones off its coast can become. China does everything it can to curtail the United States from slowing down its progress or its regional domination.

Therefore, you should not be surprised that the Chinese government was angry at the United States over the debt deal crisis for a number of reasons, the least of which being the most obvious, that China owns a large portion of US treasuries. There's a lot more to the story than most people realize, and China has a lot more pull in such issues, than most people give them credit for, no matter how much our politicians pretend China doesn't matter. Indeed I hope you will please consider all this and think on it.