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People's Daily Online>>Opinion

Beware of US taking money from China's wallet

By Chen Xiankui (Global Times)

15:37, October 10, 2011

Edited and Translated by People's Daily Online

Summary: Being wary of a U.S. diplomatic trick aimed at taking away all the money from China's wallet does not mean that China should completely refuse investing its foreign exchange reserves in the infrastructure construction of the United States, but it means that China should not invest in the infrastructure construction of the United States according to the logic of the Untied States' hegemony.

Recently, the United States Senate has been trying hard to launch a RMB exchange rate act and clamoring to use it to punish China. The United States wants China to invest its foreign exchange reserves in the United States and meanwhile is trying to regard the so-called RMB exchange rate undervaluation as the root cause of the trade imbalance.

The United States shamelessly and ridiculously says that China has seized jobs of the U.S. people by manipulating the RMB exchange rate and insists that China's foreign exchange reserves are tantamount to stolen money. It is obvious that the United States' hegemonic blueprint of both pressing the RMB exchange rate and taking money from China's wallet is taking shape.

First, the United States wants China's money to get itself out of a difficult position, but the United States will definitely not allow the Chinese model to outshine others with its success. In the current world, although the United States, Europe and Japan still have absolute advantages in many areas, the European debt crisis and the financial capital of the Wall Street have deeply hurt the people and fundamentally damaged capitalist morals.

The huge amount of foreign exchange reserves held by China not only indicates the great success of the Chinese system but also is regarded as a threat to the root of the systems in the United States, Europe and Japan. Therefore, the United States has no choice but to smear the China Mode. The United States not only is staring at China's wallet and wants China's money to help itself out of the difficulty but also is as arrogant as before.

It wants to defeat China by using its smart power to slander the RMB so that China will panic, feel guilty, present its wallet to the Untied States willingly to beg the Untied States' pardon and dare not ask any condition as a creditor.

Second, on the top of tarnishing the image of the RMB and claiming the moral high ground in terms of the relationship between China and the United States as a debtor and a creditor, the United States has so far intended to drain China's foreign exchange reserves through three steps. First, the United States has seemingly planned to start a trade war with China and will initially pass a proposal concerning the exchange rates of the RMB.

Second, the United States will force China to invest a huge amount of its foreign exchange reserves into U.S. infrastructure projects so as to use its several million new well-paid payrolls to waste China's huge investments before deliberately hurting the Chinese enterprises that have made such investments in the United States through technological, environmental and legal means, while being indifferent to China's reasonable proposal requesting it to partially lift high-tech trade restrictions. Third, the United States will use its favorite means: devaluate the U.S. dollar at the right time in order to eliminate part of its debt.

Third, to fulfill the aforementioned goals, the House, the Senate and the Obama administration have worked together. When the U.S. Senate is proposing to "punish China," the rumors have become popular in Washington that even if the House and the Senate pass the proposal, the U.S. government will likely manage to avoid a trade war with China through the China-U.S. Strategic Economic Dialogue and Obama will veto it, provided that China will use its huge amount of foreign exchange reserves to invest in U.S. infrastructure projects so as to help the United States to emerge from the trouble. This is just a series of diplomatic tactics adopted by the House, the Senate and the Obama administration to set a "trap" for China to fall into.

However, being wary of the United States' diplomatic tricks does not mean that China should refuse all requests for investing its foreign exchange reserves in the infrastructure of the United States. It means that China should reject unfair requests for infrastructure investments.

To be more specific, there should be three preconditions for China investing in the infrastructure of the United States. The first condition is justifiability. The Chinese government should justifiably ask the United States to stop slandering China, and let Americans know that they cannot borrow money from China if they continue to claim that China stole their money.

The second condition is mutual benefit. China's investments in the U.S. infrastructure sector will promote the development of its real economy and help it out of crisis, but China has no duty to offer unilateral assistance. China has the right to demand some payback for its investments, and the United States cannot use its bonds or bond interest to fool China. Instead, it should at least lift restrictions on the exports of certain high-tech products to China so the two countries can achieve mutual benefit.

The third condition is safety and credibility. The two countries should sign a formal investment treaty, which can offer some necessary trade concessions to Chinese companies, so U.S. competitors will not bully them. China should be wary of the ingratitude of the United States.

The author is a professor of Marxism at Renmin University of China.


Leave your comment23 comments

  1. Name

PD User at 2011-10-1571.168.245.*
China will be nothing without the US comsumer buying the chinese merchandise. US is one and still only one mighty in the world.Don"t talk trash to US. You think China is a mighty only in your bubble head.
Francisco at 2011-10-1365.208.187.*
United States is a weak country in relation to All Mighty China ... United States can"t "force" China into anything. China has the pan by the handle ... United States can do nothing but grab the the hot pan if it wants to get a hold of it.The Almighty
Carlos Romanov at 2011-10-12183.13.236.*
The good professor"s proposal is utopian.
PD User at 2011-10-12180.190.163.*
Who is undervaluing their currency. Is it America. No. Is it China" Yes. I have never read or heard one word otherwise. What is wrong with a level playing field. Is China so weak that Americans have to subsidize its currency? We already purchase the "junk" that is produced and being represented as "quality". I would be ashamed if I was crying now it. You should give thanks to Americans for pulling China out of the third world.
KingChaser at 2011-10-1298.141.186.*
Are these posts censored by the Chinese government?

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