Giant on the move
from The Great Debate:
By Ian Bremmer
The views expressed are his own.
All eyes should be peeled on China, but not for the reason you think. While the biggest structural risk right now is global rebalancing, especially between China and the U.S., there is another important threat from China: cyberwars. Cyberattacks are one of the biggest fat tails (along with climate and North Korea).
It’s no surprise that the latest Google hack attack came from China. The presumption is that the vast majority of cyber attacks hitting the U.S. are coming from the Chinese government. It’s very hard to know where threats are originating – country-wise and/or person-wise -- because it’s very difficult to go back and figure out the paper trail. But at a minimum, there is an environment in China that tolerates cyber attacks.
Proprietary information around technologies – gaining profit shares, increasing revenues – allows a country to be much more economically competitive. China has leverage because everyone wants to get into China. If you want to make something in their country, you have to share the technology.
The Chinese government can really benefit from having access to proprietary data, whether it’s about Exxon's oil reserves or pricing of commodities of proprietary technologies, such as American telecommunications. China’s become much more competitive and therefore has become much more of a threat. If it’s using a non-judicious system to gain economic advantage, we need to take that very seriously.
from George Chen:
By George Chen
The opinions expressed are the author’s own.
Chinese Premier Wen Jiabao once said there's something even more important and precious than gold -- people's confidence.
In recent weeks, I'm afraid global investors have been losing confidence in Chinese stocks from the New York to Shanghai markets. Sino-Forest Corp became the latest victim of a slump in overseas-listed Chinese companies. The company earlier this week accused short-seller and research firm Muddy Waters of defamation for alleging in a report that it had fraudulently exaggerated its Chinese forestry assets.
Walking past Apple's sleek shop along London's Regent Street on Sunday, my wife asked me what I wanted for Father's Day.
"An iPad?" I ventured, half-jokingly.
"Are you sure you want one? Don't you care how they're made?" came her disapproving reply.
from Reuters Investigates:
Worrying about the power China has over the U.S. as America’s largest foreign creditor has become a national pastime. It’s a bipartisan issue in Congress and a favorite subject among pundits lamenting the decline in U.S. influence around the world. But could China really use its Treasury purchases to shape U.S. policy? Diplomatic cables released by WikiLeaks and obtained by Reuters suggest that has already happened.
Emily Flitter’s special report outlines a diplomatic flare-up between the two superpowers following the U.S. financial crisis. Chinese officials said they were worried about the safety of their U.S. investments. U.S. diplomats worked hard to ease the tensions, but the conflict ultimately led to the request of a personal favor by a top Chinese money manager in a meeting with U.S. Treasury Secretary Timothy Geithner.
Joschka Fischer was never one to mince words when he was Germany's foreign minister in the late '90s and early noughts. So it is not overly surprising that he has painted a picture in a new post of a world with only two powers -- the United States and China -- and an ineffective and divided Europe on the sidelines.
More controversial, however, is his view that China will not only grow into the world's most important market over the coming years, but will determine what the world produces and consumes -- and that that will be green.
Reuters's top news and innovation teams have put together a web site on the yuan and the debate over its revaluation. Particularly worth a look after the weekend's statement by China that it would allow more flexibility in its currency exchange. You can access it here, but it looks like this:
Far from being lauded as a virtue, China's high savings rate has been blamed for the economic imbalances underlying the global financial crisis. The criticism being that the Chinese spend too little and rely too much on exporting to Western consumers.
from Sebastian Tong:
The growing acrimony in the international debate over China's currency policy has led some to warn that Beijing could dig in its heels if pushed to hard to let its yuan rise.
But Barclays Capital says Beijing could let its currency strengthen as early as next month, notwithstanding its public resolve against Washington's threat to label it as a currency manipulator.
I just discovered roller disco in China! The oh so 1980s disco craze is still rolling on in China due to a huge following from the country’s masses of migrant workers.
On a regular weeknight, the Xinxiang roller skating rink in one of Shanghai’s less fancy districts is teeming with crowds of young migrant workers, mostly in their 20s.
from Pakistan: Now or Never?:
The Real News had an interview last week with former National Security Adviser Zbigniew Brzezinski who talks about how U.S. policy is playing out across Afghanistan, Pakistan, India and China. The second part of the interview covers his support for the mujahideen fighting the Soviets in Afghanistan, but here is what he has to say about Pakistan and the regional dynamics:
"We are in Afghanistan because we have been there for 8 years, now getting out is easy to say, but by now if we get out, quickly, the question arises, what follows? Is there going to be again a very sort of militant regime in Afghanistan which might tolerate al Qaeda's presence and beyond that is now a new issue, namely the conflict in Afghanistan has come to be connected with the conflict in Pakistan. Pakistan is an important country of 170 million people which has nuclear weapons, nuclear weapons, and delivery systems, delivery systems to the entire region around so we have to think much more responsibly on how to deal with this problem ... "