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December 13, 2006
Have They Begun to Circle the Wagons?
On the eve of the American Magical Mystery Tour to China, the U.S. Trade Representative appears to have anointed herself in the holy oil of tradition, while reciting the usual ineffective incantation, such as we have heard ad nauseam for years.
However, the Financial Services Forum, a private association once headed by Hank Paulson, currently U.S. Treasury Secretary, has issued its own prayer in the form of a lovely little white paper, which may denote an attitudinal change on Paulson's part of no little significance to future dealings, at least on a surface level, with China:
"...no new framework of communication [between the U.S. and China] represents a 'silver bullet' that can be expected to immediately resolve difficult outstanding issues." [Editor's italics.]
Paulson himself has recently uttered a similar statement:
"There is a tendency in Washington to want immediate answers, but a relationship this important [between China and the U.S.] will have consequences for our economy and for our nation over generations..." [Editor's italics.]
Either Paulson has decided to take the high road with China by abjuring statements that appear to pressure PRC officials -- while Schwab plays Mutt to his Jeff -- or he has begun to circle the wagons, knowing full well that little will come of his meetings with the Chinese except a fine excursion and even finer cuisine.
UPDATE (Dec. 14, 2006): Uh oh... FT reports: Ms Wu criticised the US for “not only having limited knowledge of, but harbouring much misunderstanding about the reality in China.”
UPDATE (Dec. 15, 2006): Controversy Avoidance 101. FT again: "Ben Bernanke, chairman of US Federal Reserve, stepped into a political minefield on Friday when he released remarks branding China’s undervalued currency an 'effective subsidy' for its exporters which was distorting patterns of production and trade. In what looked to be a last minute bid to avoid controversy, Mr Bernanke then dropped the phrase from his speech to the Chinese Academy of Social sciences, using the less inflammatory term 'distortion' instead."
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