China update

Andy Xie: Either America Or China Will Crash In 2011

Andy Xie's latest sees the liquidity war getting worse in 2011.

America will continue to pump the financial system with liquidity via tax cuts and quantitative easing. China will keep the yuan cheap and avoid clamping down on inflation.

The tense equilibrium can't last for long, as either sovereign debt or inflation gets too heavy to bear. Whoever lasts longer, wins.

China Is Poised To Rise - And Things Could Get Violent

America is still the richest and most powerful country on earth thanks to geography says historian Ian Morris, but if history is any guide then China will be next—and things could get violent.

The West is finding it harder to get its own way in the world.

The people of Europe and North America still produce two-thirds of the world’s GDP, spend more than two-thirds of its R&D dollars, and own almost all of its nuclear weapons and aircraft carriers.

8 Reasons China May Be Destined For An Economic Hard Landing

Hot money inflows

Huge property bubble

Massive increases in money supply, much of it property speculation and building of unneeded capacity

Currency manipulation charges from the US and potential trade wars

Unsterilized trade imbalances fuel inflation

Slowing Europe

Dearth of Jobs for new graduates

Potential social unrest

Sitting Out the China Trade Battles

G.E.’s silence is part of a broader Western corporate reluctance to criticize Chinese policies, particularly in public. So eager are multinationals for continued access to the world’s fastest-growing market that they are loath to cry foul even amid evidence that China may be flouting international trade laws.

That reticence has long characterized foreign companies’ dealings with the ascendant China. But last winter and spring, there were signs of a new willingness by American and European multinationals to speak out.

Google said in March that it would shut down its China-based Internet search engine, rather than continue allowing Chinese censorship. The leaders of big companies like G.E., as well as the German giants Siemens and BASF, voiced concerns in early summer about access to the Chinese market.

China has a lot of peacemaking to do

After taking a pounding in the court of world opinion in recent months, the Chinese government hopes to repair an image tarnished by the public relations fiasco of the Nobel Peace Prize and a series of foreign policy gaffes.

Chinese President Hu Jintao is to be received by President Obama on Jan. 19, with an official state dinner and Oval Office meeting scheduled, the White House announced Thursday. China has toned down its blatant public support for North Korea, urging Pyongyang to accept nuclear inspections and to refrain from further threats to South Korea.

"At the end of the day, Hu needs a successful summit,'' said Michael Green, a former top Asia advisor to President George W. Bush and now an analyst at the Center for Strategic and International Studies in Washington. He added, however, that "it might be tactical, rather than a forthright recognition that China needs to compromise."

For a leadership that sailed through the global financial crisis with nary a misstep, the Chinese have proved surprisingly inept at diplomacy. Beijing's assertive — critics say thuggish — behavior in the international arena has undermined an image it had long cultivated as a gentle giant whose prosperity would only enrich its neighbors.