James Fallows writes an interesting piece, entitled, “Broader point about Geithner, Obama, China, and ‘manipulation’” setting out his concerns on how the Obama administration is treating/going to treat China.
To summarize what Fallows says (and hey, if I am not summarizing it properly, go ahead and attribute it to me) is that Obama is clearly capable of nuance. The key financial and diplomatic people Obama has brought into his administration are clearly capable of nuance (i.e. Geithner, Hillary Clinton, et. al.). Obama and his people have done a good job so far in recognizing the complexity of the issues facing the administration, and in seeking to formulate practical solutions to resolve those issues.
But here is where the disconnect starts. During the election campaign, Obama’s expressed views on China were both simplistic and jingoistic. For examples of this, check out the following:
Barack Obama On China. Say It Ain’t So . . . .Oh But It Is.
Obama And Clinton And China As Though It Actually Matters.
But the accepted view on Obama’s less than enlightened comments regarding China was either that he did not really believe what he was saying or that once elected, he would study up on the issues, apply his intellect to them, and start sounding more like George F. Kennan than Sarah Palin.
But with the recent needlessly antagonistic comments about China by the Obama administration, Fallows and I (or maybe it is just me) are starting to wonder when the eduction of Obama on China will kick in. Now mind you, I am NOT criticizing the Obama administration regarding its China policy, but I am criticizing it for crossing China without any good reason for doing so.
What do you think?
UPDATE: ChinaBizGov blog did posts entitled, “Don’t Worry About Geithner’s Words on China’s Currency” and “Redux: Why Geithner’s Words Don’t Matter (Yet),” essentially saying, “don’t sweat it.”
FURTHER UPDATE: The Financial Times just did a really good story on this, aptly entitled, “Counterproductive currency quarrel.

  • I don’t understand why everyone is acting as if Geithner’s comments in his confirmation hearing are an absolute indication of Obama’s China policy.
    Well, not everyone… I have seen a handful of comments from Chinese academics who seem to get that this is just the rhetoric of a job applicant trying to please the hiring committee.
    We need to keep in mind that, so far, all we have heard is words. Just words. Not policy.
    I’m willing to bet that President Obama is smart enough to know he cannot go head-to-head with China on currency, and also expect their necessary cooperation in handling the global financial crisis.

  • Also another piece on this by David Kotok at [1].
    The US is a major trade power. If the US decides do a Lehman to the world trade system, then the future becomes even more uncertain.

  • Sal

    Probably a good idea to read the latest posts on http://mpettis.com before you judge Geithner’s comments to harshly. I’ll summarize… an undervalued RMB is bad for everyone, China most of all.

  • Good, relevant post.
    I second GE Anderson’s point.
    Of course, only time will tell and verify …

  • Good, relevant post.
    I second GE Anderson’s point.
    Of course, only time will tell and verify …

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