Wednesday, June 18, 2008

Learning from the United States

The Bush Administration has been trying to get China to adopt a more market driven monetary policy. This recent snippet from AP gives a glimpse of how much authority our suggestions carry:

China has pledged to loosen currency controls, but has not given any timetable, saying that sudden change would expose the country's shaky financial system to excessive risks from outside speculators.

During the talks in Annapolis, Md., China's central bank governor, Zhou Xiaochuan, alluded to such risks by asking about the regulatory mistakes that may have helped precipitate recent U.S. financial troubles.

"China always hopes to draw lessons from the U.S. experience in macroeconomic management and market development," the official Xinhua News Agency quoted Zhou as saying. "However, during this time of discussion, we are also interested in drawing lessons from the U.S. financial turbulence."

Among the questions Zhou said raised was the role exchange rates can play "in maintaining the world's financial stability."

Seems China is more interested in learning from this administration's mistakes than the administration itself!

What's that old Chinese curse about interesting times?
215 DAYS
, 10 Hrs, 15 Min, 44.8 Sec - but who's counting?


bg said...

That's not the only thing China is copying...

China is copying our oil-based society. How much longer until their demand for oil overtakes the U.S.? Name a single oil producing country where we don't see significant Chinese influence, especially the ones that are not-U.S. friendly (Iran, Venezuela, Nigeria, Canada).

(Before Al starts a thread bashing Canada bashing, I was only kidding).

I've been watching the CNN "Out of Gas" special report, talking about the coming "energy wars." I don't remember the 70s energy crisis, I wasn't quite old enough to read at the time. Was there similar apocalyptic predictions in the 70s? Is this just timeless paranoia, or is there something more to this one?

pluto said...

bg -
You ask about the 70's energy crisis, which I vividly remember although I was only a teenager then.

Our current "Out of Gas" special reports are really calm when compared to the rhetoric of the day. You've got to remember that the boomers were young, impressionable, politically active, and more than a little naive.

The talk at the time was that we were facing the end of civilization. Not just as we know it but of all civilization. We didn't understand that the newly empowered Saudi princes weren't really that radical (at least not yet).

I personally developed a strong bias towards purchasing the smallest possible car to do the job because my vehicle at the time was a 72 Pontiac Bonneville that averaged 9 miles per gallon.

I knew that oil crunch time would come again because we abandoned most of the lessons learned at the time as inconvenient and out of touch with the times.

I know that the oil crunch will also ease in a few months and everybody will say "thank heavens thats over!" Only to scream even louder when prices start rising again next spring. Paranoia and short memories go hand-in-hand.