As I write this, President Obama has ended his Asian tour
(sounds rockstaresque). Although he was met by major protest nearly everywhere
he went, from the Philippines where protestors were sprayed with water hoses to
Malaysia, his main worry continues to be how to deal with Japan, an ally but at
the same time not offend one of America’s largest holder of U.S. debt – China.
In word, President Obama stated that the US Japan alliance was
"stronger than ever" adding in so many words that America opposes any
efforts (by China) to undermine
Japan’s administration of the disputed and
uninhabited
Diaoyu Islands in the East China Sea (note East China not East
Japan).
By taking this position, The President
basically questioned China's sovereignty and “legitimate interest," to use
the words of foreign ministry spokesman Qin Gang, in the Diaoyu Islands, which
they feel have nothing to do the Japan-US security treaty. Also, there remains
the effort of the U.S. to implement Obamas GATT and NAFTA, the 12-nation
Trans-Pacific Partnership (TPP), which excludes
China.
Some may argue otherwise, but it should be remembered that since the fall of
japan after WW 2, it was clear that a primary objective of the occupation of
Japan would be U.S. military control in the region for decades to come albeit
not originally outlined in the
Potsdam Declaration as such. This was achieved
when General Douglas MacArthur, along with a few staff WROTE the entire new
constitution of Japan that has lasted ever since. Specifically via But the most
unique and one of the most important provisions came in
Article 9, which
outlawed the creation of armed forces and the right to make war.
This is a difficult prospectus for the U.S. while mainstream media
incessantly pounds that China is faltering economically, the question is
compared to whom?
Not the U.S. for
certain.
First, U.S. bureaucrats insist
that the Chinese economy is in deep trouble, although the
Chinese economy grewat 7.4% year-on-year for the first quarter of 2014. In particular when compared
with the miniscule expanded
0.10 percent growth in the U.S. Gross DomesticProduct (GDP) observed in the first quarter of 2014 over the previous quarter.
And loot will continue to flow in to China given
the global demand for
copper,
soybeans and multiple investments and trade
arrangements between China and South America. China has a large hand and equal
investment in
Copper in both Chile and Peru and
Iron in Brazil as well as
sustainable energy development in Venezuela. Plus one must recognize the long
standing relationship China and Trinidad have in the Caribbean. The reality is
that
South America now imports more from China than it does from the European
Union, according to the U.N. economic agency for the region.
Then there is the issue with China
and Russia , which appear to be making moves toward quitting using (diversifying)
the US dollar or at least significantly cutting the dollar share in their forex
reserves (a move that will most likely broaden the Yuan’s daily trading range).
Add to this that from of January 2013 to the end of July, the Bank of Russia reduced its stockpile of
US Treasury securities from USD 164.4 billion to USD 131.6 billion (a reduction
of US Treasury obligations by USD 32.8 billion, or by 20 percent), there are
some serious issues on the table for the administration to address and not just
give window dressing.

Even more important is that the
military containment of China for the U.S. is the main reason this
administration has proffered unequivocal support for Japan, although they are
well aware that such may have a dire impact and strain on the U.S. economy. Specifically, speaking, if China desires to
retaliate, in concert with Russia and other BRIC nations, the result could led
to starting the demise of the dollar – meaning the American way of living will
be severely impacted as a consequence with growing levels of inflation in the
form of increases in the cost of food, clothing and gasoline and utilities.
It should be reminded, give the
manner in which the U.S. has targeted Russia for what has occurred in the
Ukraine, and leaving China out of the TPP talks, what we observe as closer
interaction between Beijing and Moscow are really about protecting their
domestic economies. But it is not farfetched to see that is they continue this
close corporate, an outcome of bad and poorly thought-out U.S. foreign policy
could be a direct challenge and attack on the dollar.
The U.S. concerns in China will prove to be challenging for the present
administration. For one they are all over the place in policy and tend to
reflect a moderately satirical ineptness to the goals and aims of their foreign
policy efforts.
On the other, I am still
waiting (as I suspect others) for
Mr.
Obama to define what he means by “rebalancing” U.S. policy towards Asia, when
his actions show opposite and even worse, the same old U.S. approach. By this I
mean the neocolonial zeal reflected in President Obama’s desire to re-occupy
the
Philippines consequently continuing the United States historical imperialist
agenda in Asia.
China has the second largest economy
in
the world and recently it has been project to pass the U.S, before the next
year, with some economist suggesting that
the size of the Chinese economy will
become three times larger than the U.S. economy by the year 2040. The
concern is that much of the U.S. dollar’s valuation
stems from its lock on the oil industry and if China and Russia and the BRIC
nations can accomplish this, next thing is the dollar is gone and gold will rise. As I write and you read, Iran
is already in the field trying out a non-dollar based international trade
system.
It will be hard for Obama to both keep
from upsetting China and at the same time appease Japan, as current news
reports in the region have noted. It is
the administration desire to maintain U.S. military hegemony in both Malaysiaand Philippines, by making sure neither nation ever reach the strength
militarily equal to Vietnam, as well as do all possible to prevent China from reaching
parity with the U.S as a naval power that could eventually challenge American
in the Indian Ocean and the Western Pacific. The obstacle is, has the Obama administration
really thought about what their actions may result in, or are they just making it
up as they go like they were in a game of pick-up and run?