Posted by
Rainbow10 on Thursday, July 31, 2008 5:42:33 PM
China's Olympic Games are making headlines, but China's recent trade actions get little media attention. It comes as no surprise to find out that China sided with developing countries when it came to trade talks. There was much movement but little movement forward during the latest trade negotiations of the WTO in Geneva. China cast the deciding swing vote in favor of India's position, and its action suggests that politics trumped economic common sense. China's move will limit opportunities for Chinese exports to developed markets. Instead, by expanding its political ties to India and other developing nations, China built political capital that will come in handy to meet its strategic interests .
One is left to wonder what motivates China's behavior, particularly in light of the fact that its economic interests are closely tied to its main export markets in the US and other developed nations. Of particular interest are China's increasing efforts to strengthen ties with the least-developed nations, many of which are failed states in Africa, and other strategic regions such as Central Asia, and the Middle East. These are the nations which have vast natural resources and where unstable political regimes reign supreme. Could it be that China is seeking to align its political interests with those nations that have the least to offer in terms of export markets but the most in terms of oil reserves and other natural resources? After all, the US market is already open to Chinese products, but it is showing signs of a slowdown as the US economy struggles with higher energy prices, a slumping real estate market, and massive government debt. So, it seems possible that China is willing to trade-off short- term loss of cooperation with the US and other developed nations for a long- term gain, namely a competitive position to access and control energy resources around the world.
We need to keep close tabs on China, because trade talks are no longer confined to the rarified atmosphere of the WTO. Global trade and energy are interdependent. China has made this very clear with its recent action to split the world into the "haves and the have-nots." The failure of the trade talks should serve as a wake-up call to all Americans. A trade and energy alliance between China and India will carry a big price tag for the US. Thus, energy independence including offshore drilling, clean coal, nuclear, wind and solar solutions are absolutely necessary for America to remain competitive, prosperous, and secure in the 21st century. In my recent political novel, Troutfly, I made up a fictional relationship between extremist elements in China and India. The facts in Geneva point to the perils of trade talks. Let's hope that an understanding of what is at stake, can keep fiction from turning into reality.