China's treasury bluff
Premier Wen Jiabao made headlines yesterday with his comments on the "safety" of China's investments in the U.S. government securities market. These unusual remarks from the leader of the capitalist communist political dictatorship are attributed in the press to both genuine concern about the economic policies of the repostitory of almost $1 trillion of China's reserves and to China's sensitivity to its marginal role in shaping the G-20 meetings. One could ask what safe haven China might divert those funds to in this truly global crisis, especially in light of the seizures of Madoff LLC and the Stanford Group.
From this perspective, the Premier's comments are part of the dispute now taking place over the South China Sea. Last weekend's confrontation there between an unarmed U.S. Navy surveillance ship and five Chinese ships has not been resolved. The U.S. is sending armed escorts to the area now to protect its routine surveillance efforts in international waters. China is more or less claiming soveriegnty over much of this vast area between the Chinese mainland, Taiwan, and the Phillippines. This is an ongoing issue and China is playing the economic card to seek a compromise in its favor.
On that sunny thought, it can also be noted that the head of Russia's airforce suggested yesterday that they are considering basing long range bombers in Cuba and that discussions are underway. In any event Venezuela has already offered an equipped island to Russia for its use as a base in this hemisphere.
The Obama administration is being tested.
From this perspective, the Premier's comments are part of the dispute now taking place over the South China Sea. Last weekend's confrontation there between an unarmed U.S. Navy surveillance ship and five Chinese ships has not been resolved. The U.S. is sending armed escorts to the area now to protect its routine surveillance efforts in international waters. China is more or less claiming soveriegnty over much of this vast area between the Chinese mainland, Taiwan, and the Phillippines. This is an ongoing issue and China is playing the economic card to seek a compromise in its favor.
On that sunny thought, it can also be noted that the head of Russia's airforce suggested yesterday that they are considering basing long range bombers in Cuba and that discussions are underway. In any event Venezuela has already offered an equipped island to Russia for its use as a base in this hemisphere.
The Obama administration is being tested.
posted by John Borden at 9:03 AM
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