China's State Press Calls For 'Building a De-Americanized World'

Hugh Pickens DOT Com writes "Businessweek reports on some not-so-subtle commentary from China's official Xinhua News Agency on the U.S. budget showdown: 'It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.' Key among its proposals: the creation of a new international reserve currency to replace the present reliance on U.S. dollars. 'The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising the debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized,' the authors write. 'The world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites.' The commentary calls for a greater role for developing-market economies in both the World Bank and the International Monetary Fund, adding 'the authority of the United Nations in handling global hot-spot issues has to be recognized. That means no one has the right to wage any form of military action against others without a UN mandate.' The commentary concludes that 'the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs.'" Meanwhile, U.S. Senate Leaders are claiming a deal is close to reopen the federal government until mid-January and defer the debt ceiling debate until mid-February.

Comments

Everything they say is true.

[Anonymous Coward]

US strategy is to print dollars and the rest of the world have to live with the consequences(inflation), as they control militarily the main sources of energy and people need their petro-dollars.

Re: Everything they say is true.

[Aighearach]

No they don't, Europe gets a lot of its energy from Russia. You don't have the monopoly you think you do.

There are not many countries that would prefer to be under Russia's thumb, however loudly they complain about the US.

Re: Everything they say is true.

[Anonymous Coward]

There are not many countries that would prefer to be under Russia's thumb, however loudly they complain about the US.

Historically not. This is because it was widely known that Russia would screw you over hard.
With the recent revelations about NSA it is pretty clear that the US us following the same fucked up realpolitik and that you have to think of dealing with US in the same way as you think about dealing with Russia.
While both nations have a lot of wealth it is generally more beneficial to deal with other more idealistic nations.
It may seem like it is naive to be "soft" and kind hearted but in the long run people learn that they can trust you. I have seen this a lot in the business sector. Companies that makes sure that everyone involved benefits form the deals makes it in the long run.
Those who screws people over only lasts until word gets around. They do great for a decade or two until everyone else realizes that there is more money in working with other people.

Re:Everything they say is true.

[Anonymous Coward]

Well other countries (UK, Japan, China, Australia et al.) apparently don't believe they should "live with the consequences" of importing the USA's inflation, so they devalue their own currencies in an attempt to help their exports. Unfortunately this race to the bottom erodes the faith in the US dollar, and BRICS countries (Brazil, Russia, China, South Africa) are dissatisfied with the status quo and always call for a replacement of the US dollar at their annual meetings. BRICS are already drawing up their own version of the IMF and also will be trading among each other & non-BRICS without the US dollar! Agreements are in place. Most people in the US are completely unaware of the current situation.

Summary says it all

[muecksteiner]

The Slashdot summary already nicely shows why the Chinese do have a point of sorts:

"a deal is close to reopen the federal government until mid-January and defer the debt ceiling debate until mid-February."

In other words, the only thing they seem to be able to come up with is a deal to kick the can down the road for four months - and in the meantime, in all probability do exactly nothing about the underlying fundamental problems which have caused this mess in the first place.

You know, these pesky little details, like the U.S. habitually spending way more than it actually takes in tax earnings. As in: WAY more. A bit more could be argued to work in some lets-fudge-the-books-and-rely-on-inflation-to-make-it-work way, but the U.S. is light years from that sort of sustainable level. And no one wants to admit it.

The bit where the Chinese are IMHO wrong is that it will need any sort of centralised planning to achieve this replacement of the U.S. as hub of the global economy. That will just happen, inevitably. The fundamentals are gone, no way the U.S. can stay where it is. What will come afterwards is very uncertain - but things can stay the way they are.

Re:Summary says it all

[Anonymous Coward]

Actually the real problem is passing the budget 25 teabagger members of congress will refuse to let a budget pass unless the ACA is delayed or repealed. But otherwise nice troll based on Fox News talking points. Thanks for playing.

Re:Summary says it all

[Anonymous Coward]

Thank George W Bush junior for destroying the trust in the US around the world. Thank the Tea Party for making it look like the US is having a civil war of words over obamacare reminiscent of the slavery abolition talks during the actual civil war. At the end of the day Obamacare isn't going away, The Tea Party will be the losers, along with most of congress. The American people will win by finally having healthcare and being competitive with foreign nations who do. However the by the time it's in full force, the healthcare, welfare/disability fraud will probably have sunk the budget worse.

The US is on the road to ruin and all the gerrymandering possible is not going to save the republican party.

Re:Summary says it all

[Anonymous Coward]

$16.7 trillion is not a partisan issue. Toss the lot of them for not knowing the difference between deficit and debt. The deficit could be zero and we'd still be screwed. We need 50 years of surpluses.

Re:Summary says it all

[jcr]

Here's a little tip for you, sparky: tossing off terms like "tea bagger" and invoking the anathema name of "fox news" doesn't in any way invalidate what someone is saying.

The real problem is that pinheads like you want to keep pretending that the USA has a revenue problem instead of a spending problem. It's still possible to prevent the USA from having a Soviet-style collapse, but to do that we'd have to immediately cut government spending to less than it collects in tax revenues.

-jcr

Re:Summary says it all

[jfengel]

This is a problem that has been decades in the making. The Teapers and Bush II were the pointy end of a very, very long needle that goes all the way back to the founding of the country.

The problem is that Americans don't trust each other, and they never have. The battle lines here aren't all that different from the ones over which we fought a civil war. It was only an act of tremendous courage and foresight that let us even be a single country in the first place; the first draft essentially left us as a collection of weak, separate countries less closely bound than the EU.

America managed to prosper despite the fact that the country folk and the city folk seem to despise each other. They achieved it largely by ignoring each other, going on about their business and doing it very well, selecting their friends and associates. But as a world leader, we're required to work together, and our self-reliance turns into a weakness: we can't even be civil with each other.

The world can't rely on us, not as we are now. We've had better periods, when we established programs to look after each other, while keeping each other at arm's length by doing it through the federal government. These programs are the ones most under attack: national-scale programs are expensive and cause the deepest resentment. We end up fighting about them and hating each other all the more for it.

I don't know if any country can replace us. Our individualism has crafted the innovations that put us in this position. A de-Americanized world would advance a lot more slowly unless other countries can figure out how to do what we've done. But they may find that it comes at the same cost we pay of self-reliance becoming self-centeredness.

Re:Summary says it all

[Aryden]

The real problem is that pinheads like you want to keep pretending that the USA has a revenue problem instead of a spending problem. It's still possible to prevent the USA from having a Soviet-style collapse, but to do that we'd have to immediately cut government spending to less than it collects in tax revenues.

There are both problems. The US Government spends like a bored trophy wife, meanwhile, incredible sums of taxes are not collected from higher wealth citizens because of loopholes and offshore accounting.

Re: Summary says it all

[Anonymous Coward]

Obama wants to close those loopholes but the Teabagger controlled congress won't let him.

That's one of the reasons they can't agree on a budget.

Republitards only want yo help their rich friends instead of helping the country and the general public. It's special interest lobbying.

That's the problem.

Re:Summary says it all

[Anonymous Coward]

What's wrong with Thatcherism?

It was the one period of recovery and improvement in the last 50 years of British politics. It got us out of the mess that goverments of the 60's and 70's put us in and able to weather another 10 years of Labour's financial mismangement before we started to collapse again.

This time around we really are fucked though, since there is no Thatcher to save us and it looks like we will have a crazy union controlled Labour government in a few years time because of all the bickering about Europe which has crippled the right of British politics for 20-odd years now.

Re:Summary says it all

[DarkOx]

If you really study the problem its pretty clearly a spending one. People moan all day about the corporate taxes not collected but they fail to realize that its that if not for the off shoring of assets and other tax avoiding loops holes we'd have some of the highest corporate tax rates in the world. The big internationals would simple leave for greener pastures.

As far as wealthy individuals dodging taxes you really are talking tiny sums of money compared to federal spending.

The big revenue gains if there are any pretty much need to come from taxing what most of us consider to be the middle class, or the upper end thereof any way. That family of four earning just a little more than 250K Obama keeps talking about. The thing is if you hike the taxes on them given demographically where they live its likely to have palpable and negative impact on their standard of living. They probably live near a big city on one of our coasts and all their income spoken for in debt service on property, or some incredibly high rent. Start trying to actually extract that 35% tax from their employer and that great paying job will probably shift to someone in Ireland.

Here is where the GOP is so stupid and the DNC is so smart. All the DNCs talk of revenues is a rope a dope. They know the result of "talking" about revenues will make most GOP members start frothing at the mouth and appear crazy, they will expend tons of political capital trying to block. The DNC won't raise taxes or if they do it would be a paltry sum because they know how fragile the recovery is, they tell us so every day. Just look how fast they gave away the "single payer" concept for health care reform. What they wanted was a corporate giveaway from the start. They let the GOP burn a bunch of energy fighting a "public option" that was never to be, rather than direct all the energy at killing the effort entirely.

The reality is they only answer is to cut spending, and it has to be

1. Discretionary ( not because it makes much gains but its easiest ) the sequester has been really successful. It got done because it spread the pain around. Despite liberal screams about how the sky was surely to fall, its had little measurable impact on main street, if it lowered GDP in any its almost strictly an accounting matter.

2. Defense, we don't need a military and defense industry that is 17 times larger than our nearest competitor. We simply don't need it. Our fellow NATO signatories need to buck up and meet their 2% spending commitments to secure Europe and we need to get out of the intervention business in the Middle east. At the end of the day we are secure against attack because we have the bomb, and SAM capability to strike anyone anywhere; it removes the need to have an outsized conventional defense force. We should have a conventional military force that is formidable enough the likes of China and Russia don't consider a conventional war with us a practical option and no more so.

3. Entitlements probably the hardest to do even as a libertarian I think we need some safety net, although their needs to be a point where we shed the burden of supporting those who won't help themselves as well. What we have in place needs to be phased out over a long period of time to because people have their lives structured around it, and its groups of people that are less able to adapt. The biggest government shrink and savings are probably to be had here but its going to take two generations to unwind, minimaly so those savings are far away.

Re:Summary says it all

[AmiMoJo]

Working together is un-American. The American Dream (TM) is that anyone can make it, but the assumption is for one person to get rich others must remain poor. Business owners are expected to maximize profits for themselves while keeping wages as low as possible, for example. Anything that might push wages up or interfere with someone getting rich, like unionising, is strongly discouraged.

It's just not in the nature of American society to work together and support each other, beyond small local communities. Almost every debate comes down to "why should I pay for someone else?" or "if it doesn't directly benefit me it shouldn't be funded".

Re:Summary says it all

[Black Parrot]

Thank George W Bush junior for destroying the trust in the US around the world.

Thank Obama for building on that, rather than working hard to roll it back.
Neither will have a 'legacy' that I would want.

Re:Summary says it all

[argStyopa]

And this, kids, is an exact example of the problem.
Instead of pointing to the entrenched elites of BOTH parties (who are far more like each other than they are like either of the unwashed outside-the-beltway masses of either party), this AC poster blames:
- George W Bush: certainly one of our least-competent presidents, in terms of foreign policy he worked with near-crystal clarity; I doubt he broke anyone's trust or betrayed them. This could be contrasted with Cold War presidents who worked to undermine elected governments around the world (Mossadegh, Allende, etc)...that might have a little more to do with 'destroying trust in the US'.
- The Tea Party: contrary to the media-industry's tendentious portrayal of the Tea Party, as far as I can tell the Tea Party was formed to protest the ridiculous and ongoing government spending beyond its means. Its offense (aside from lining itself against the President, which automatically means they are painted as whatever fringe right-wing cause they can get to stick) is essentially being obstructionist - if there is nobody willing to start to be obstructionist when we cross $15 trillion in debt, then when?

The United States has outcompeted the rest of the first world with it's ostensibly-atrocious medical system for 50+ years...it doesn't seem like that's much of a problem in that context.

Re Gerrymandering - you know that this practice isn't limited to the US, but has been a part of American politics since about 1790? Really, that seems to the be the "talking point" for the media the last 45 days, it's one of those points that probably sounds very objective, but what the poster is doing is really attacking the House of Representatives. It's much like a fat white racist complaining about "the decline of the neighborhood" only when a black family moves next door.
Of course the House happens to be
a) the most democratically-elected branch of the US government, and
b) controlled by the Republican party this cycle.
It's amazing how nobody in the media was talking about the problem of Gerrymandering 2007-2009...I wonder why?

Re:Summary says it all

[muecksteiner]

Well, actually, Thatcherism was not all bad. She did have her good sides: she destroyed the extreme trade unions, which had long lost sight of their purpose, and had turned into a cancerous growth that strangled the country. She gave Britain a new sense of moving forward. She got the finances in order. And she had the guts to stand up against the Warsaw Pact for, as it were, western values, in times when few in Europe were willing to. Also, she, as a person, was definitely not of the worst sort you see as a politician. As in: she took no bribes anyone was ever aware of, and was, at least on a personal basis, fairly honest.

However, as Tyrion Lannister so famously said in GoT, nothing before the "but" in a sentence counts. :-)

Even after taking all the undoubted merits of her tenure as prime minister into account, I still think she did more damage to the fabric of British society, than good. The main areas in which the Thatcher era was, especially in hindsight, disastrous are the following:

- It is all good and fine to shaft the kind of parasitic "caveman commie" trade unions she was dealing with. Shaft them well and thoroughly. That much was good conservative instinct, and good politics. But a truly great politician would have realised you have to put something else in their place afterwards, lest even worse stuff will fill the void in the medium term. But nothing was done, and labour relations, and with them the gaps between the classes, have grown alarmingly worse ever since. Amongst many other institutions, a functioning market based society needs something like trade unions, like it or not. If not in name, but in function. Basically destroying them was a very short-sighted and petty-minded victory.

- Overall, she was (and due to financial constraints, up to a point had to be) hell-bent on undoing a lot of the institutions aimed at increasing social cohesion which had been introduced over the previous decades. Such as the school system, which was much, much better when I was a kid, than it ever was afterwards. And arguably, the terminal decline of the state run school system started in the Thatcher years, during which everything that cost the government money was seen as an unnecessary expense. Even if in the long run incurring said expenses maid perfect sense - schools are a prime example of such an expense. But during the Thatcher years, the pendulum swung too far back. After excesses of state regulation, nanny state antics, and wasteful spending (there is a reason the movie "Brazil" was done in Britain, of all places), suddenly lots of sensible things were also thrown out of the window, along with the bad stuff. Perhaps inevitable in such circumstances, but still extremely damaging. Especially as few since then have really tried to repair this damage.

- Her tenure saw the birth of the modern financial sector in Britain, which has turned out to be a much worse cancer on society at large than any leftist structures could ever have been. And I'm saying this as a fairly conservative person who is not against banking, or even the financial industry per se. Far from it. But the anti-social, uncontrollable monster that is now the City was hatched in the "bugger thy neighbour, if there is profit in it" and "greed is good" era of Thatcherism, and has grown ever since.

- She herself was a more or less decent person, but the majority of chaps who got to power in her wake were not. Amoral, greedy little persons, to an alarming extent. Since she was boss at the time, I hold her at least partially responsible for this.

- And there is also something she is personally responsible for, with her jingoistic attitude towards all the other components of the UK - in particular, the Scots. When I was a kid (and I am Scottish), being pro-independence in Scotland was a quaint notion held by some university types. The high-handed and arrogant manner in which Thatcher in particular dealt with the early stages of the devolution process did a lot of damage to the Union, and to the

Re:I'm Sorry, China

[Anonymous Coward]

Sorry, but reality called, and Uncle Sam, I found out that China is the bitch, which you fed until she weighed 300lbs, that's now pegging your skinny ass with a 16 inch strapon you had it make.

I heard that India is taking your calls (at a call center no less) but it keeps talking until you tire out and can't manufacture shit.

No real reserver currency alternatives

[Dorianny]

China and many other nations would love to see another currency supplant the U.S dollar or at the very least have a credible alternative, but the truth is that currently there is no currency that could do that. The Chinese renminbi is not free floating, the euro is not even guaranteed to survive, Japan is too leaden with debt which puts into question the future stability of the yen, and finally the British sterling, Canadian or Australian dollars etc are simply backed by too small of a economy to be considered serious contenders.

Re:I'm Sorry, China

[Dr Max]

"Yeah that's cool sweetheart" says china "you two look good together, but first can you give those trillions of dollars i loaned you back."

Re:DOH. Because China's most likely to get screwed

[palemantle]

Or in short: the US will fulfill its obligations to allies and creditors who've played the game in good faith. To China and others who've gamed the system-- well, that's another story, and in the next days and weeks, we may very well see, what action the US can use, to re-balance the sheets.

I'm not seeing any evidence to support that. Going by recent history, the US seems perfectly happy to trample over its allies to secure its putative interests.

Re:I'm Sorry, China

[Dr Max]

America sounds like the women in this to me. As she has bought far too much on credit, and think she can hook up with a guy and get them to help pay the bills, all the while getting him to build stuff for her. ;) Sorry ladies.

Re:DOH. Because China's most likely to get screwed

[jcr]

the US will fulfill its obligations to allies and creditors who've played the game in good faith.

Nope, not even close. The USA will default on those debts by inflation.

-jcr

Re:Everyone open your firewalls

[TheRaven64]

Yes, because it's so hard to buy a collocated server in China. You've not actually read any of the recent revelations about NSA practices, have you?

Re:I'm Sorry, China

[gtall]

The U.S. government couldn't reasonably ask U.S. business to leave China. First, they don't give a rat's ass whether its China or India, and second, U.S. companies don't give a rat's ass about what country the U.S. government thinks deserves their investment. And if the U.S. government tried to do such a thing, they could expect to spend the next 5 years in court litigating the proposal.

Re: Everyone open your firewalls

[Joce640k]

Let's hope so.

I don't mean they should hand the world to the Chinese, but change is definitely needed. Big change, not Obama-sized "change".

OTOH I don't see where that change could possibly come from. The people don't look like they're going to revolt anytime soon, and the NSA is busy making revolt ever more difficult.

Re:I'm Sorry, China

[Anonymous Coward]

An investor can stop buying new bonds and that has the effect of "calling in their loan".

Actually, China has already reduced its purchases of new Treasury bonds due to the low return, and presumably a desire to diversify. Yet, the rates are still rolling along the sea-bed. If the rates rose, even fractionally, demand for T-bills would jump, offsetting any further rise. China owns about 40% of the 30% of Treasuries that are foreign owned. 70% are domestically owned. Hell, a big chunk are owned by the Social Security Trust Fund, which isn't allowed to invest in other markets. Increasing long term T-Bill rates would make a lot of Americans very happy.

If a country does that (a selective default) it's going to get a hard time selling bonds to anybody else, at least at the same interest rate. It's a matter of trust.

If the US economy is being attacked by China manipulating the US Treasury bond market (somehow), then the US selectively defaulting on Chinese owned Treasuries would have a clear cause/response. It would be quite different from the default caused by not raising the debt ceiling, or the partial European defaults in recent years. The markets would be seeing a strong response to an attack/manipulation by China, not a reneging on an obligation. It would have a calming effect. [It would be different if the US did this simply to avoid paying its debt, or to unilaterally "punish" China because, for example, the statements in TFA, or as a tool in an unrelated trade dispute with China. Then the US would be throwing away all trust in Treasuries. But I'm talking about a specific response to a specific attack.]

There is no scenario where China can harm the US by merely owning US Treasuries. They aren't loans, they can't be "called in", they are difficult to manipulate (compared to other types of bonds, or other forms of currency trading). That's the whole point of Treasuries, and the reason they are considered a safe harbour and priced accordingly.

Re:I'm Sorry, China

[TWiTfan]

China has no intention of fighting a *military* war. They're just sitting back and letting the U.S. bankrupt itself on a ridiculously over-sized military that it doesn't need, thus winning the *economic* war without firing a shot.

Re: Everyone open your firewalls

[Grishnakh]

Better crypto tech is all fine and well, but that's not going to bring any kind of change to the US government; it's still in the hands of the voters, who aren't going to use that crypto tech because "they have nothing to hide" and because they're generally Fox News or MSNBC-watching idiots.

I can see other nations, including China, acting together, bringing much more change to the global state of politics, and consequently to the US. They have the power to do so (especially if they act together), and if the world's reserve currency switches from the USD to something else, that's going to cause massive changes for everyday Americans.

Re:I'm Sorry, China

[Greyfox]

Kinda like what we did with Russia? If our schools were better we might learn from history. Heh heh heh

Re:I'm Sorry, China

[Grishnakh]

Here's an article with a picture of that billboard:
http://thinkprogress.org/justice/2013/10/09/2760221/mysterious-pro-secession-billboard-appears-in-missouri/

Whoever created it obviously hasn't looked at a map lately. Even if you assume that they really meant MS (Mississippi) instead of Michigan (MI), Missouri is only barely contiguous with the other states there, separated by Arkansas, and joined to Oklahoma by a tiny stretch of border. Is there some reason they don't want Arkansas in their new country? Is it just because Clinton came from there? Anyone from the area care to comment?

Also, why'd they leave out Alabama of all states? I would have thought MS and AL would go hand-in-hand. And the northwest portion of FL (the part bordering southern AL) would probably want to go with them.

Anyway, it sounds like a great idea to me. Imagine how well the rest of us will do without those states (and most importantly, their voters) holding us back. Maybe we could even dump ObamaCare and replace it with true universal healthcare like the Europeans have.

Re:I'm Sorry, China

[MaWeiTao]

China is doing a great job of accumulating it's own massive debt. At some point it will probably turn into a race to see who gets there first although I'd give China the edge because I think their economy is not sustainable. For at least a decade some have suggested that China has been exaggerating it's economic growth and from what I know I tend to believe it. Sure things are great, for a very small subset of the population. Meanwhile the majority is exploited in the name of economic success.

Not that China doesn't think ahead. They're currently Africa's largest trading partner. And while America blindly throws far more money at Africa than China does, China is building infrastructure. So the average African is exposed directly to the benefits of a relationship with China while the US, ironically gets little recognition despite the fact that in all other ways they do more. Of course, while China does all that, they're stripping Africa of every resource they can get their hands on.

The US is in the difficult position that they're the world's military. Everyone bitches about a supposedly imperialistic America, but every time something goes wrong somewhere they expect Americans to show up guns blazing. And the European defense industry is only happy to have America as their biggest customer.

Meanwhile, China has been working hard to build their own military might. So while they're currently playing aloof they clearly have other ambitions. Or at least they're hedging their bets. But if I had to guess I'd say their end goal to replace the United States. However, while China has more to gain economically, I'm convinced if their economy took a dump they'd turn to a militaristic approach. There's nothing like a foreign enemy and a cause to distract the people from domestic problems. And their are perfect regional targets that I'm not convinced the US will stand up to defend.