:::shit that's going down:::
China’s prime minister, Wen Jiabao, has been in America where he met President George Bush. Mr Wen hopes to quell trade tensions. Mr Bush hopes to quell tensions over Taiwan
ON MONDAY December 8th, Wen Jiabao, China’s prime minister, kicked off his three-day visit to America by ringing the opening bell at the New York Stock Exchange. It was a symbolic moment-a leader of the Chinese Communist Party firing the starting gun for the capitalist running dogs of Wall Street. The running dogs clapped, and no wonder: China is good for profits. Its limitless supplies of cheap labour, its efficient production platforms and its absence of currency risk have made it an integral part of international capitalism. In recent years, multinational companies have perfected the art of assembling their goods in China, selling them back to the West, and distributing the dividends to applauding Wall Street investors.
On Tuesday, Mr Wen moved on to Washington, where his reception was somewhat less enthusiastic. Tensions are rising over trade and Taiwan. Militants in Congress decry China's unbalanced and, they say, unfair trade with America. Meanwhile, militants in mainland China denounce the Taiwanese government's provocative experiments in people power.
The White House reports on Mr Wen's visit. The US State Department gives information on relations with China, including news and background notes on Taiwan. The Chinese Ministry of Foreign Affairs gives its policies on America and Taiwan. See also China's embassy in Washington, DC. The trade departments of the United States and China detail trade relations. Taiwan's government provides news on its relations with China. The US Treasury Department posts Mr Snow's comments on exchange rates and currencies. Ronald McKinnon, at Stanford University, publishes a number of papers on the yen, the yuan, and their relationship to the dollar. The Institute for International Economics publishes research on exchange rates, international trade and other economic-policy issues.
Last month, Taiwan’s parliament passed a law that would allow the island to hold national referendums. Nothing wrong with that, you might say. But referendums have a nasty habit of providing definitive, yes or no answers to delicate questions that might be better left unposed. For Taiwan, the most delicate question of all is its ambiguous status vis-à-vis mainland China. The possibility that the people of Taiwan could vote for independence from the mainland enraged the authorities in Beijing, who view the island as a wayward province. They condemned the referendum law as a tool for separatists. One Chinese military official, quoted by the state media, was frighteningly blunt: “Taiwan independence means war,” he said. “This is the word of 1.3 billion people, and we will keep our word.”
Stung by such outrage, the Taiwanese opposition succeeded in watering down the government’s proposal. The law, as passed, would only allow a referendum on Taiwan’s independence if China attacked the island. But Taiwan’s government may not settle for that. It has toyed with the idea of repealing the law and starting again. Taiwan’s president, Chen Shui-bian, has said he intends to hold a referendum on March 20th, the same day he stands for re-election, urging China to renounce the use of force against the island and to remove the estimated 496 ballistic missiles it is currently pointing across the Taiwan Strait.
The United States is the third corner of this awkward triangle. On Monday, it warned mainland China not to contemplate coercion. But it also told Taiwan that it does not want to see unilateral moves in the direction of independence. President George Bush confirmed that stance on Tuesday, while seated beside Mr Wen. But Taiwan's Mr Chen remains undeterred. On Wednesday, as he launched his campaign for re-election, he said the “Taiwan people have the right to say loudly that they oppose missiles and are for democracy.” Mr Bush would rather they spoke softly. As one aide confided to the New York Times, the president “isn't shopping around for another international crisis”.
Talking trade
Mr Bush is, however, shopping around for some concession on trade and exchange rates. China is expected to amass a trade surplus of at least $120 billion with the United States this year. Its currency, the yuan, pegged to the dollar since 1994, has followed the greenback on its long march downwards since the beginning of last year. The manufacturing states are in uproar over the migration of jobs to China and their complaints are reverberating in Washington. In response, John Snow, America’s treasury secretary, has urged the Chinese to move towards unpegging the yuan or repegging it at a less competitive rate. Last month, America opened up a new flank. It imposed import quotas on Chinese socks, dressing gowns and bras, claiming that they were disrupting America’s textiles market. Some fear that the quotas, while insignificant in themselves, might represent a shot across China’s bow-to be followed up with a full fusillade of protectionist measures if more is not done to narrow the trade gap.
But China has an ally in Alan Greenspan, chairman of the Federal Reserve, America's central bank. In a speech on Thursday, he argued that a rise in the yuan would have little or no effect on total employment in the United States. China's trade surplus with America, he pointed out, is conspicuously large only because China provides the final staging post for much of Asia's America-bound production. China imports partially assembled goods from neighbouring countries, finishes them off in its own workshops, then exports them to America. If China retreated from this role under American pressure, its place would be taken by other Asian countries, not by domestic producers in the United States.
China's currency peg does make it more difficult for the country to manage its own money supply, Mr Greenspan pointed out. Every time the central bank, the People's Bank of China, buys dollars to keep the currency down it creates yuan. It has tried to mop up some of these extra yuan, but the money supply has still grown at an annual pace of over 20% this year. Mr Greenspan, who knows a thing or two about bubbles, worries that this rapid injection of money into the Chinese economy may cause it to overheat. If so, the Chinese authorities might choose to slow their purchases of dollars, letting the yuan rise in value-not to help America's economy, but to cool their own.
Some of China’s banks and their customers seem to be preparing for such a scenario. According to figures published on Monday by the Bank for International Settlements, $9.1 billion was repatriated to China from foreign bank accounts in the second quarter. Most analysts think these funds are coming home in anticipation of yuan appreciation. If so, Mr Snow may rue the day he lodged the thought in the minds of Chinese investors. China is the third-biggest customer for American government bonds. If it takes its money out of the market, the Treasury’s debt will fetch a lower price, and its cost of borrowing will rise-collateral damage from the Bush administration’s threatened trade war.
and Bush just got back from China.. just so you know, China, Taiwan and USA can not afford to go to war.
WASHINGTON -- A Pentagon audit has found Vice President Dick Cheney's former company may have overcharged the Army by $1.09 per gallon for nearly 57 million gallons of gasoline delivered to citizens in Iraq, senior defense officials say.
Auditors found potential overcharges of up to $61 million for gasoline that a Halliburton subsidiary delivered as part of its no-bid contract to help rebuild Iraq's oil industry.
But the company apparently didn't profit from the discrepancy, according to officials who briefed reporters Thursday on condition of anonymity. The problem, the officials said, was that Halliburton may have paid a Kuwaiti subcontractor too much for the gasoline in the first place.
Defense Secretary Donald H. Rumsfeld, speaking Friday to a group of state legislators, stressed that the Pentagon had a "fairly normal process" for reviewing contractors' bills before payment is made.
"We've got auditors that crawl all over these things, and what you're reading about in the paper is not an overpayment at all," Rumsfeld said, in response to a question from the audience about media reports on the audit. "It ... may be a disagreement between the company and the Department of Defense ... and possibly between the company and subcontractors as to what ought to be charged, but there has not to my knowledge been any overpayment."
A Halliburton statement released Thursday said the Kuwaiti company was the only one that met the Army Corps of Engineers' specifications. "Halliburton only makes a few cents on the dollar when fuel is delivered from Kuwait to Iraq," the statement read.
Democratic presidential candidates said the audit demonstrated the Bush administration's commitment to special and corporate interests.
"We've recently learned what many Americans have suspected for a long time -- special interest contributor Halliburton is overcharging the American taxpayers," said Howard Dean. "For the safety of our troops, we need to make sure every penny in Iraq is spent wisely and efficiently."
Rep. Dick Gephardt, also a Democratic presidential candidate, said the Bush administration's "policy in Iraq of putting the corporate special interests first is unacceptable." And retired Gen. Wesley Clark said Bush is "more concerned about the success of Halliburton than having a success strategy in Iraq."
"Think about what $61 million could buy for our troops in need rather than lining the pockets of Halliburton executives," said Sen. John Kerry of Massachusetts. "The Bush administration should be ashamed that they bent over backwards for their biggest contributors while leaving American troops in danger."
Sen. John Edwards of North Carolina, another Democratic candidate, said in a statement, "Halliburton is engaged in war profiteering, plain and simple. A company that donates huge sums to the president and once was chaired by the vice president is now war profiteering at taxpayer expense."
At the White House on Friday, presidential spokesman Scott McClellan said, "There are oversight measures and procedures in place to make sure that tax dollars are spent appropriately. And we expect those measures to be followed and we expect those procedures to be followed."
The Pentagon officials said Halliburton's Kellogg, Brown & Root subsidiary also submitted a proposal for cafeteria services that was $67 million too high. The officials said the Pentagon rejected it.
The defense officials said they had no reason to believe the problems were anything other than "stupid mistakes" by Halliburton. They said the company and the Pentagon were negotiating a possible settlement of the matter, which could include repayment by Halliburton.
In the statement Thursday, Halliburton chairman, president and CEO Dave Lesar said, "We welcome a thorough review of any and all of our government contracts."
News of the problems came as President Bush worked to justify his decision to limit $18.6 billion in Iraq reconstruction contracts to companies from the United States or countries that supported the war. The move angered governments whose firms were cut out of the bidding process, including Canada, France, Germany and Russia.
Many Democrats also have criticized the Halliburton contracts, suggesting they were a political payoff for a company with strong ties to the GOP and whose executives gave generously to the Bush campaign.
Cheney and Pentagon officials deny any political motive for awarding the no-bid contracts to KBR, which has a long-standing relationship with the military as a major Pentagon contractor.
Routine audits by the Defense Contract Audit Agency uncovered the problems.
Pentagon officials said they were concerned about problems with KBR's contracts, which were awarded without competitive bidding for up to $15.6 billion for rebuilding Iraq's oil infrastructure and assisting U.S. troops there. About $5 billion has been spent or is obligated to be spent on those contracts so far.
The defense officials, who are involved in the audit of the contracts, said the Pentagon was negotiating with KBR over how to resolve the fuel-pricing issue. They declined to name the Kuwaiti subcontractor that provided the fuel, saying that company may not have been notified of the inquiry's findings.