May 22, 2007

Kissinger Thinks It's 1914

The second Strategic Economic Dialogue is underway today and tomorrow at the Mellon Auditorium in the main Commerce Department building in Washington, DC. Under its stately dome and corinthian columns, the Bush Cabinet (with a few stand-ins such as John Negroponte) and 17 Chinese ministers will attempt to hash out the big issue of the day, the USA’s mammoth trade deficit with China.

Dr. Henry Kissinger started things off with a musing on the historic implications of USA-China cooperation. He demonstrated this point (and revealed his intellectual irrelevance) by bringing up the discredited “Bismark/Wilhelmine Germany” argument that “when a nation grew with the speed, determination and scale of China it would evoke almost inevitable competition and even conflict between itself and the traditional countries.”

So far, the talks can be broken down as follows: Wu Yi says “Win-Win!” but Paulson says “When-When?”

Vice Premier Wu rightly pointed out that the trade gap with China could disappear by allowing high-tech exports. Of course that’s not possible when the USA views China through Kissinger’s 1914-era eyeglasses. Meanwhile Paulson has nothing to offer other than his impatience at Chinese progress.

All the while, the largest delegation since Deng Xiaoping’s famous American tour in 1978 is watching over a invading horde of Chinese businessman inking $20 billion in deals that will no doubt led to more imports and friction.

If nothing concrete emerges from this summit, the battle lines will be drawn between a sheepishly pro-China Executive branch versus an anti-China (Paulson’s own words) Congress. The result will be anti-trade legislation before the end of this year and a full-blown China bashing and China-baiting all 2008 as Presidential candidates on both sides vie to heap blame for all America’s problems not on Washington (where it belongs) but on Beijing.

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