Managing Trade Hostility with the New School of US China Relations

John Milligan-Whyte

Chairman

Center For Aemrica-China Partnership

How can President Obama1. Successfully launch a new era of partnership?

2. Balance the American and Chinese economies?

3. Stop America’s unsustainable accumulation of debt and long-deficits?

4. Prevent the devaluation of the US dollar?

5. Prevent the financial, economic and other crises forcing the Chinese government to tire of buying US government debt?

The Architecture of Anarchy

US $ 594 T _________ = US$ 148.5 Tx? = X

25%

The initial housing finance problem and resulting chain reaction of problems caused systemic imbalance exacerbated by further borrowing and spending

Theoretical Debt vs GDP + 23 Years

“China’s decision to accumulate roughly $ 2,000 bn in foreign currency reserves was, in my view, a blunder. Now it has a choice. If it wants its claims on the US to be safe, it must facilitate an adjustment in the global balance of payments. If it and other surplus counties wish to run huge surpluses and accumulate vast financial claims, they should expect defaults. They cannot have both safe foreign assets and huge surpluses. They must choose between them. It may seem unfair. But whoever said life was fair?”

Martin Wolf“ It is in Beijing’s interests to lend Geithner a hand” Financial Times, June 9, 2009

“China caused the economic crisis”

March 2005 May 2007 and January 2009

“…launching a new era of partnership…”

President Obama, May 24, 2009

“President Barack Obama seeks to alter the modalities of strategic dialogue to pursue a broader strategic agenda in order to seek solutions to the global financial and security crises, climate change, and holdover issues from the Bush administration such as the Democratic People's Republic of Korea, Iran non-proliferation, value of the yuan, trade deficit, intellectual property rights and human rights.One challenge for the new administration will be to prioritize the issues on the agenda, although all of them must be pursued simultaneously.”

David Shambaugh, Brookings Institute, May 2008

Principles of Peaceful Coexistence Principles of Conflict

1. Mutual respect for the sovereignty and territorial integrity,

2. Mutual nonaggression,3. Non-interference in each

other’s internal affairs,4. Equality and mutual

benefit, and5. Peaceful coexistence.

1. Fairness Hypocrisy2. Believe and Behave as I

Do Intolerance3. Do as I say, Not as I Do

Immoral Authority4. Do as I Say Arrogance5. We are Better than You

Arrogance6. My Country Right or

Wrong Bias7. The Passion for Conflict,

Power and Harming Others

“Facts and Law in the Case”or Fairness Hypocrisy

• In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires from China, a move that fulfills his campaign promise to "crack down" on imports that unfairly undermine American workers but risks angering the nation's second-largest trading partner.

• "The president sent the message that we expect others to live by the rules, just as we do," Leo W. Gerard, president of the union, said Friday night.

• The President decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case," the White House said.

New Era Of Partnership Requires A New Mindset

The New School of US-China Relations

is the Shared Blueprint

The New School Of US-China Relations Provides the Essential Shared Blueprint for the New Era of Partnership’s Success

President Obama can personally decide and communicate to President Hu Jintao whether he believes that:

America must reciprocate the reforms Deng Xiaoping implemented by “opening up” to Chinese investment in order to invigorate America’s economy and balance America and China’s trade and economies; and

America must reciprocate by implementing the Principles of Peaceful Coexistence, including non-interference in China’s internal affairs in matters such as Tibet, Taiwan and its definition of human rights.

1.

President Obama can decide whether he believes that for America to win China must lose? 

2.

Is it necessary for America’s economic and national security to prepare for war with China?

How does war with China protect America?

3.President Obama can decide

whether he believes Americans’ conventional

mindset and strategies undermine Americans’ economic and national

security?

4.

Does safeguarding America’s economic and national security require that America reciprocate and base its economic and foreign polices and military strategies toward China on the Principles of Peaceful Coexistence? 

5.

President Obama can decide whether he believes China will unilaterally abandon its implementation of the Principles of Peaceful Coexistence during 2009 - 2017?

6.

President Obama can decide that America’s economic and national security requires that he inspire a collaboration of civilization mindset and strategies beginning with the Chinese civilization because China has unilaterally implemented the Principles of Peaceful Coexistence towards America and all nations for 30 years.

7.  

President Obama can decide whether he believes it is possible to balance the American and Chinese economies without permitting reciprocal economic globalization?

8.

President Obama can decide whether he believes that without reciprocal economic globalization being permitted, American states, cities and companies that are benefiting from China’s economic growth will be negatively affected unnecessarily.

Economic Crisis Unemployment

9.

President Obama can decide whether he believes that American companies that do not have profitable China Strategies will be able to remain profitable anywhere?

New School of US-China Relations

is essential to successfully manage

1. Environmentally Sustainable Growth

2. A New Era of Partnership

3. Global Financial & Economic Crises

4. Balancing Economic Growth

5. All Nations’ Security Crises

6. Failing and Failed States