The Yuan Dollar Bill

This is mere speculation on my part, but with all of the coverage of China’s move to un-tether the Yuan has made me curious. For the most part the media has been all smiles and every "expert" claims this will relive trade concerns. This move has been praised by the media:

Here:

http://www.foxbusiness.com/story/markets/amcham-china-welcome-china-currency-announcement/

Here: http://money.cnn.com/2010/06/23/news/economy/g20.agenda.fortune/index.htm

Here:

http://wallstreet.blogs.fortune.cnn.com/2010/06/19/china-grants-geithners-wish/

Why would China make such a move? How does this benefit China?

Again this is merely speculation, but what if China by allowing the Yuan to float they were increasing their buying power? Would they be able to secure more resources overseas as demand increases?

By holding the Yuan so low for so many years they have already reached a point where they have driven a large percentage of the worlds manufacturing capacity to their shores.

What is their expected outcome?

Why NOW are they willing to cave on this?

I believe in the long run this help them to secure more raw materials. Additionally, it will help to build their own domestic consumption and eventually lead to a false inflation in the consumer markets of the western world as they see their basic goods sky rocket in cost.

Arghh! There are Pirates off to Port!

The Flow of Oil to China

Evaluation:

Control Resources 5
Protect Resources 5
Secure Transportation 5

China’s New Navy

Over the next few years China will be introducing it new Navy to the world it will include potentially (1) refurbished Soviet Aircraft Carrier and (2) new indigenous aircraft carriers, up to (6) new nuclear attack submarines and (1) new nuclear ballistic missile submarine. (http://en.wikipedia.org/wiki/People)

Now all of the mainstream media throughout the world would lead you to believe that this force is being built to confront or offset the American Navy. I tend to believe the construction of these warships is meant to do one thing; secure the supply of resources to China in the coming century. See map above!

After all the US Navy already has (11) super carriers and (11) amphibious carriers and (45) nuclear attack submarines.

China's Military is outclassed by the US: http://www.china-defense-mashup.com/?p=5581

As mentioned in earlier post China has substantial investments around the globe which they are intent on protecting. These resources will help them maintain their industrialization well into the next century as well as bolster their manufacturing superiority.

An example of the mission that will be preformed by their new navy can be found here: http://www.nytimes.com/2008/12/18/world/africa/18iht-pirates.1.18782636.html

After all China must protect its sea lanes so that it domestically produced goods and international secured resources can be safely transported around the globe.

Down under investment

This is why Australia is the country that China chose to invest the largest amount of money; it is list and summary of their resources:

http://www.australianminesatlas.gov.au/aimr/index.jsp

Why do countries allow foreign investment firms to take their natural resources? I can understand if they are renewable. Do we not understand that we are going to buying back these same minerals from China in the form of technological devices such as cell phones and computers at an incredible mark up?

http://www.abc.net.au/news/stories/2010/06/21/2932693.htm

Evaluation:

Control Resources 5
Protect Resources 4
Secure Transportation 4

Why Don't We Understand Them?

Note: Click on the pic above for a cultural comparison of the Western and Eastern cultures.

As Americans we have a difficult time properly evaluating other cultures. We for some reason are under the misguided belief that all developing countries wish to emulate us, because they wear clothes, listen to our music or watch our movies. This could not be further from the truth. In of the most important values that exist in developing countries is their unique identity, that is way many immigrants and descents of immigrants celebrate their national heritage, St. Patty’s Day and Cinco De Mao are to examples. China, despite what we may wish to think neither China nor its citizens wish to become a clone of America, and until except this we will continue to misunderstand their action.

One of the major differences between China and the U.S. is China’s ability for long term planning. In America long term plans are for 5 years this is partially due to our political system, which prevents us from setting any goals past the current administration, and because we are a very short sighted reactionary, who also compounds the problem with politicians who are always trying to please our ever changing and always growing list of wants. China on the other hand is an old culture, who has been through many governments in their 4,000 year history, but they have remained one common loosely related people. One of the benefits to being an old culture is your ability to see past your current generation. In addition to the history of China their political systems is not set in a constant state of flux which allows for them to set long range plans into motion and to follow through to their completion.

China understand that in this next century as nations grow resources, food, mineral, energy and water, will be in higher demand as we all collectively attempt to increase our standard of living. China understands that it needs to secure the resources necessary to continue its indoctrination and secure the resources necessary to maintain their manufacturing, and specifically raw materials required for the production of high tech goods such as cell phones and computers.

Following the cold war American has found it difficult to justify purchases of $200 million air superiority fighters (187) and $14 billion aircraft carriers (11) which are need to prop up our military industrial base, so in the absence of the Soviet Union our politicians and industry leaders have led us to believe that China is our next great enemy. I believe that this is not the case. I believe that China is establishing a military force with the sole intention of protecting its investments abroad as well as maintaining sea lanes to facilitate the deliver for their manufactured goods.

http://www.legacee.com/Culture/CultureOverview.html

RESOURCES! RESOURCES! RESOURCES! – PART II

Evaluation:

Control Resources- 5

Protect Resources- 3

Secure Transportation- n/a

Conclusion:

We have seen China’s ability to gobble up world markets in the past; do you remember the concrete shortages that plagued America during the housing boom?

Link here:

http://www.builderfinancial.com/publish/Publish_item.asp?ID=175

China in their long range planning have realized that to be a manufacturing leader in this century they will need to secure the materials to facilitate their production. This is very similar to the way the U.S. cornered the steel production for the last half of the 20th Century.

Link here:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6082464/World-faces-hi-tech-crunch-as-China-eyes-ban-on-rare-metal-exports.html

Just a Great Article

Note: Clicking on the picture above will take you to the episode

This picture is from an episode of South Park Title The Chinese Probrem,

I thought this was appropriate for this post as it represents how the mainstream media in American thinks of it viewers. For clarification we (citizens are Butters and the media is Eric Cartmen)

This is just a great article that addresses many of myths forced down our throats by mainstream media in the United States of America. The article is posted at the Heritage Foundation Website.

http://www.heritage.org/research/reports/2010/01/10-china-myths-for-the-new-decade

The Anti-U.S. Aircraft Carrier Ballistic Missile

Every defense blog has been touting this carrier killer missile, which they believe was developed solely for the purpose of defeating Americas Aircraft Carriers our main source of power projection.

Link here: https://www.usni.org/forthemedia/ChineseKillWeapon.asp

I see this missile more as a sign of China’s wishes to secure its sphere of influence in Asia. Yes, it can be used to target our carriers @ $14 billion each, rendering them irrelevant, but so can any number of other Chinese missiles.

Link here: http://en.wikipedia.org/wiki/YJ-62

I believe that China’s main goal is to secure its resources at home and this is their way of pushing their influence envelope out further into the China Sea to secure their Oil Reserves.


Evaluation:

Control Resources- 5
Protect Resources- 5
Secure Transportation- 5

Conclusion:

This technology allows them to to secure the most important resources; those close to home which are easier to defend and easier to transport to their ports due to their proximity.