US remains silent over China investment strategy

The United States is remaining eerily silent over China's dramatic increase in strategic investments around the globe. The majority of China's large resource development firms (in industries like oil, gas, petrochemical, and mining) are state-sponsored institutions that receive hefty support and direction from government leaders to align with the reigning party's strategic allocation of resources around the world.

Recently, there has been a relatively little publicized competition going on in Africa for control of major oil & natural gas fields in several countries. The main players in this heated battle are major US & Chinese oil companies. Chinese players utilize very persuasive tactics to lure the development contracts into their corner. Construction projects, focusing on roads and local infrastructure, has begun with the claimed intent to diversify their investments in the region. In almost all cases, the preemptive construction projects are soon followed by approved bids to control regional resource development. The nature of these projects distinctly resemble the common use of "kick-backs" that are standard in China business practice.

The question that begs to be asked is if the Chinese government's direct involvement in these companies, who are so aggressively acquiring assets around the world, is a violation of the WTO's (World Trade Organization) agreement on Subsidies and Countervailing Measures. The last time this WTO agreement became commonplace in western media, the fight was between Boeing Aircraft Company and the the European Union's Airbus. Airbus was accused of unfairly receiving subsidies from several major governments in the EU.

Now the fight is between western companies and those directly sponsored by the Chinese government and their strategic ambitions. The Obama administration, and US lawmakers, have remained quiet about the issue. There is an eery silence in the US hanging over most issues involving China these days, especially among topics of trade and currency.

Keeping quiet in the face of unfair competition, especially during a strung-out financial crisis, seems a bit like bringing a knife to a gunfight. China's strong-fisted authoritarian policy tactics cannot be effectively combated with passive negotiations and bilateral solutions that leave western companies at a severe disadvantage.

Despite China's recent growth and consistent increases in GDP, they have a long way to go before they catch up to the United States, mainly in terms of per capita metrics. Western media, however, has been portraying China as on the brink of taking over the #1 position. Let us not forget that China is ranked 133 of 229 for per capita income meaning, on average, Chinese citizens make only $6,000 per year (2008 estimate). China's strength lies in the sheer size of the population, which often makes the numbers seem to be in their favor. Historically, it takes education, income, and opportunity to make a country truly competitive for the long term. Not size of GDP.

In times of a global financial mess, one should allocate their resources to come out of it with some strategic advantage over the rest. Current US policy makers are bickering about relatively insignificant issues while leaders around the globe are competing in a power grab to pick up the pieces that are being dropped by the country that has seemed to have lost it's ambition to be a great leader.

Redesigning Design Itself

Our current system is based on the rights and interests of humans. Our laws, policies of ownership, and concepts of economic success are developed for the progress of humans via the consumption of nature, in all of its forms.

So, how can we recognize the value of nature?

How can we recognize the rights of nature?

Well, to achieve a sustainable balance between humans and nature, we must recognize the true value that nature has in our lives. It is the most valuable asset in our, and every other living species', lives and we should recognize this value accordingly.

In the globalized economic system that we have today, we have to develop a way to recognize this value in every decision that is made. To achieve this, every transaction should be taxed, in one form or another, to accurately assess the impact that that decision will have on nature. This will immediately demand emphasis on those decisions with the least impact, inevitably leading towards the development of cleaner and more sustainable technologies.

Our system, however, cannot operate efficiently unless these rules are supported by enforcement to ensure that they are properly followed. This enforcement, in our society, comes from the recognition of rights. Currently, only humans have rights. Those rights are universally for the consumption of natural resources (i.e. food, water, energy, land, etc.) at the unrecognized expense of other species, the environment as a whole, and especially our own species' long-term survival. Perhaps recognizing the rights of future generations to a sustainable inventory of natural resources could lead to effective policies to address the problem..

Government polices must be accepted and enforced, on a global level, that are formed to appreciate a balance between our need to consume and our need for nature, in all of its forms, to be able to sustain itself.

Political and economic differences are going to have to be put aside if this is going to work. It will not work unless all humans can accept our common situation and work together for a solution that will benefit everybody.

US must take responsibility, move forward

China Quarterly Update - The World Bank

China has been blamed for the job loss of American workers. Is the rationale reasonable?

I don’t think it is fair to blame developing countries such as China for loss of jobs in developed countries like the U.S. The total net job creation in a developed country is primarily the result of the country’s own macroeconomic and structural policies. If an economy is not generating enough jobs, there are macro and micro tools to correct this. My own view is that job creation depends primarily on the incentives for innovation and long-term growth. In the case of the U.S., things that would help would be reform of healthcare to take the cost off of the employer, immigration reform to ensure a steady flow of workers with different skills (especially the high-tech skills in short supply), fiscal policies and incentives to raise the savings rate, and expanded investment in critical infrastructure (both hard infrastructure such as transport and soft infrastructure such as universities). In the short run trade can accelerate shifts from one type of job to another and that can be a serious problem for particular workers and communities. I favor a forward-looking policy of helping workers adjust. Trying to preserve particular jobs through import protection has always failed in my reading of history.