posted on Aug, 16 2010 @ 03:58 AM
An article I read today in The Telegraph online
"US and China to clash over Yuan fall"
summed up three concerns over the ongoing tensions between China and the USA:
China is on a collision course with Washington after steering its currency sharply lower to protect its export industries, despite a near record trade
surplus of $29bn (£19bn) in July. The yuan dropped at the fastest pace in almost two years last week and is now 1.8pc lower against a basket of
currencies than in June, when Beijing announced the end to its fixed peg against the dollar.
Western economists had seen yuan liberalisation as a sign that China is abandoning its mercantilist policy in a step-by-step move towards a floating
currency, which was expected to rise. They misjudged China's motives badly.
Tension between the US and China is escalating on several fronts. China has restricted exports of rare earth minerals by more than 70pc in the second
half of this year, cutting off the world supply. China produces 97pc of these minerals, used in a wide range of high-tech industries, from hybrid
engines to computers, mobile phones, radar, navigation and precision-guided weapons.
The US is to conduct naval manoeuvres with Vietnam in the South China Sea in response to live fire exercises by China, which has stepped up its claims
to total sovereignty over a region disputed by a ring of countries. The US is also conducting manoeuvres with South Korea, prompting accusations of
"gunboat diplomacy" in the Chinese media.
I would then add, China has a missile factory newly opened up in Iran, last week there was a fresh article about Chinese missile tech being recognised
as a new and significant threat to US aircraft carriers, Russia is helping Iran start up it's nuclear program, and last week saw no great news for
optimists on the economic front - (please let me know if you found something to the contrary).
So where is this all going?