Sunday, July 22, 2012

Africa is too cozy with China to Suit the West

On July 19, South African President Jacob Zuma opened the 5th Forum on China-Africa Cooperation, held in Beijing, with a warm and effusive address about China's relationship with Africa.

Zuma even cited Admiral Zheng He's visits to the African continent as the beginning of a beautiful friendship. Even though he was off by a few hundred years, Zuma was undoubtedly expressing admiration for the Chinese that came to trade for a few giraffes to take back to Beijing--unlike the Europeans that later came to rape and pillage and kidnap natives for the slave trade.

By simply altering the sequence of Zuma's speech, the Financial Times adroitly changed the tone of his speech into one that "warns" China that all was not well, implying that China was as guilty of exploiting Africa as the European predecessors. The Washington Post shamefully reprinted the FT piece without any revision.

We have been led to believe that major publications in mainstream media have a public responsibility to be accurate and objective. They are supposed to inform their readers and not to pander to known biases nor reinforce preconceived but erroneous notions.

In other words, their job is not to merely tell the reader what they think the reader wants to hear.

Fortunately, in this case President Zuma's speech has been posted in its entirety by the South African government so that the reader can compare what he actually said to how his speech was reported.

There were certain passages in Zuma’s speech that failed to be included in the Financial Times piece.

“We are particularly pleased that in our relationship with China we are equals and that agreements entered into are for mutual gain.  This gathering (referring to the Forum) indicates commitment to mutual respect and benefit.”

Then Zuma went on to declare, “We certainly are convinced that China’s intention is different to that of Europe, which to date continue to attempt to influence African countries for their sole benefit.”

Zuma in the same speech then said, “Over the last decade, and partly because of China’s unrelenting support, the African continent has seen tremendous growth rates, making it one of the fastest growing continents and certainly the next growth pole. Furthermore, global growth estimates suggests that Africa’s growth will continue in an upward trend for years to come.

Does the above sound like Zuma was complaining about China’s treatment of Africa?

Certainly not, according to what Zuma went on to say, “In particular, we take note of the infrastructure development China has assisted Africa with in the past several years.

“ African continent is now being seen as a major player in global affairs, and is becoming more attractive to investors and development partners.  

“Indeed, this is proving to be Africa’s decade of change.

President Zuma basically concluded his speech by calling on China to continue to be Africa’s partner in meeting future challenges.

Along with helping Africa build its infrastructure, China has overtaken the US as Africa’s biggest trading partner.

Unlike the US, China does not give foreign aid with or without strings. True to its policy of non-interference, China does not tell the African nations what to do, nor make suggestions on rectifying human rights abuses.

Ironically, a recent op-ed in the New York Times by a Zambian economist argued that foreign aid tend to line the pockets of corrupt dictators while trade and infrastructure investments were more likely to benefit the general population and thus empowering the populace to hold their government accountable.

The same economist reported that Secretary of State Hillary Clinton had warned Africa to be aware of new form of colonialism, an obvious but oblique reference to the presence of China in Africa.

It’s hard to know if Secretary Clinton truly believed that Africans would find her credible or if she were merely mouthing a party line that she knew her American constituents would want to hear.

Tuesday, July 17, 2012

The End of the Dollar is Neigh

While Congress is wringing their collective hands over US Olympian uniforms that are made in China and incumbent president Obama and presumptive challenge Romney are mud wrestling over who has sent more jobs offshore, along comes another observation on the doom of the dollar. This article gives eleven reasons why the role of the dollar as a global reserve currency is about to end.

I have been tracking currency swaps that China has entered with other nations. The aforementioned article points out that China is not the only country making this trade provision that would by-pass the need to hold onto dollars.

No one in the mainstream media seems to be following this global trend of shying away from the dollar nor examining the consequence to the American economy when the value of the dollar plummets and inflation grabs the consumer by the throat. 

Friday, July 13, 2012

Condemning Olympic Apparel Made in China: Another Tempest in a Teapot Brewed by Congress

Congress is tackling yet another crisis of gargantuan proportions. They are upset that the spiffy outfits the American Olympic team will wear at the opening ceremony while designed by Ralph Lauren are (gasp) made in China.

Senate Majority Leader Harry Reid was outraged and declared that all the uniforms should be burned and just let the athletes wear singlets with hand painted logo of USA. Members of Congress from both sides of the aisle jumped in to castigate the Olympic Committee for failing to buy American.

A representative of the American garment industry pointed out that at about $1500 to outfit each athlete, the committee could easily have sourced the apparel from US makers.

What the person did not point out was that a made-in-the-USA outfit would have taken out the entire margin of the opening wear--a margin that the committee undoubtedly intended as part of their fund raising effort.

Just go on to the official website of the US Olympic Committee and one can see all kinds of “official” souvenir gear from berets to shirts and blazers available for fans to purchase. If the apparel were made in the USA and still affordably priced to sell, the committee would not raise much money, if any.

Unlike some countries, such as China, where Olympic participation enjoys state financial support, the US Olympians will go to London through donations and private sector fund raising efforts.

The US government, even if it wanted to, does not have the money to finance the Olympians. Members of Congress surely know all this.

Since much of what Americans wear are made in China, it shouldn’t surprise anyone. But when it became known that the Olympian garb was also from China, it was a no risk, no cost, no downside, and no brainer opportunity to take a pot shot at the Olympic Committee and vilify once again things made in China.

In the meantime, disaster looms as America hurtles towards the “fiscal cliff” at yearend. That’s when tax cuts expire and mandated government spending cuts begin.

While all the economists and pundits are certain that such a combination will result in the next economic disaster for the US, they are also certain that no one in Washington has the political courage or vision to enact anything meaningful that would stop the runaway train.

Such has the state of our democracy become: Terrifically adept at jumping into petty minutia but cowardly absent when it comes to tackling real issues confronting the future well-being of this country.

To conform to Senator Reid’s wishes, the standard bearer leading the US delegation into the opening ceremony in London should wear nothing (made in China), just a G-string with a made-in-USA label emblazoned to the extent possible.

Such a spectacle will convey several concurrent messages to the worldwide viewers: Washington kingmakers have no clothes and no statesmanship, and America is a poor country in more ways than one. 

See another version in New America Media. The LA Times carried the astonished view of the controversy from China.

Sunday, July 8, 2012

Ukraine is Next on Swap Deal with China

Ukraine's central bank has entered into a currency swap deal with China. The deal at approximately yuan 15 billion is not big as size goes but a significant development in other aspects. Ukraine sees this deal as a commitment for close bilateral cooperation.

Ukraine is also about to conclude a swap deal with Russia and restart negotiation with Belarus. Other countries have announced bilateral currency swap deals not involving China. This is clearly a global trend to minimize exposure to holding American dollars.

My last blog on this subject picks up the thread on my tracking of China's currency swaps.