Is the US, and now Europe, waking up to the fact that China is a rigidly controlled Communist dictatorship? The West thought by encouraging Chinese involvement in the World trading system that they would become capitalists and democrats. It did not quite work out that way.
A Chinese democracy is never going to happen as long as the Communists rule and the Communists will continue to rule. The Chinese Communist Party is ruthless, determined and brutally efficient in maintaining control. It is also very very rich, courtesy of the US and Europe.
China has masterfully manipulated the world trade system and is now in a position to dictate profound changes to the real New World Order. The US and Europe handed the keys to the farm to the Chinese and now are beginning to squirm in discomfort as they realize the predicament that they have created for themselves.
It is very true that the economic relationship has been very beneficial to the West. The Chinese have willingly provided product after product to replace what was once produced in a closed western factory. All of this has been in the name of economic efficiency. Now the Chinese are creating national super funds to apply capital to projects and acquire resources on a scale without historic precedent.
For some time I have feared the potential consequences could be devastating to the US and Europe. At a minimum, the Chinese will be making the decisions and the Chinese are dictated to by a secret and powerful dictatorial party.
My fears have not decreased. All evidence points to a China on the long march to a goal, somewhere in the future, at a place and time of their choosing.
__________________Heat on China as trade gap with Europe SOARS
By Fergal O'Brien Independent, Ireland
Saturday October 20 2007
Europe's soaring trade deficit with China is heightening tensions over the weakness of the yuan ahead of a meeting of the Group of Seven nations today.
The euro-area trade gap with China widened 25pc to a record €59.9bn ($85.6bn) in the seven months through July, the European Union's statistics office in Luxembourg said yesterday. Imports from China rose 21pc, outpacing the 15pc gain in European shipments in the opposite direction.
The widening deficit may add to friction between China and Europe as the G7 meets in Washington. China's currency, the yuan, has fallen 4pc against the euro this year, which EU officials say makes their exports less competitive, while the EU has criticised Chinese import tariffs and below-cost sales.
"We are concerned -- very concerned -- with the huge trade deficit between Europe and China,'' European Commission president Jose Barroso said yesterday in Lisbon, where he is attending a meeting of EU leaders.
"We have received some commitments'' from the Chinese "to work with us to correct those imbalances,'' he said. "So far we have not seen enough results in this area.''
The yuan has gained almost 10pc versus the dollar since the Chinese government ended a strict peg to the US currency in July 2005; it has dropped more than 6pc against the euro in that period. Chinese central bank chief Zhou Xiaochuan yesterday said China will make the yuan freely convertible "eventually,'' and currently has no timetable for the plan.
Europe is "unlikely to hasten the pace of yuan appreciation,'' said Kimberley Forkes, an economist at Moody's Economy.com in London. "China will let the yuan appreciate in its own time, not rapidly, and certainly not in any way that's going to discourage domestic growth.''
While France has led the charge against the strength of the euro, other countries added their voices in recent weeks, concerned that the currency's gains will further impede an economy already confronted by a rise in credit costs and record oil prices. A delegation including European Central Bank president Jean-Claude Trichet will travel to China later this year to discuss the yuan.
The EU also has become increasingly vocal about Chinese trade practices, saying barriers such as import tariffs unfairly limit European shipments to the Asian nation while charging that Chinese exporters break rules by selling goods such as chemicals, bicycles and frozen strawberries below the cost of production.
"We need to address the trade deficit ahead of the summit at the end of November,'' Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson, said in Brussels.
"If China does not pull its weight, we will inevitably be faced with calls for a different approach'' that "would clearly be a more protectionist approach''.
ECB governing council member Yves Mersch yesterday highlighted both benefits and difficulties of the euro's rise, noting that it helps counter some of the impact of rising oil prices, which reached a record $89 a barrel this week.
"In order to have planes flying you also need to import oil, and a high euro greatly makes oil prices cheaper,'' Mr Mersch said in Prague.
"I would not deny that a strong euro could potentially harm weaker exports to trading partners.''
While a degree of consensus has emerged on the yuan, officials can't agree on how to respond to the euro's advance against the dollar. The euro rose to an all-time high of $1.4310 yesterday and was at $1.4291 by the close.
While French President Nicolas Sarkozy wants the ECB to do more to tackle the currency's rise against the dollar, ECB president Trichet has urged politicians to show "verbal discipline'' when discussing currencies.
The euro area's trade surplus with the US narrowed 7.6pc in January-July to €37.5bn, according to yesterday's figures. The surplus with the UK, the region's biggest trading partner, soared 35pc as exports rose 6pc and imports fell.
"We have not a problem in terms of trade with the United States, but we have really a problem with China,'' the Mr Barroso said.
The euro region posted a trade surplus of €4.3bn in August, compared with an €800m surplus in July, which was revised from a €600m deficit reported earlier. The aggregate data is published a month ahead of the figures for individual trading partners.
- Fergal O'Brien