Geithner says China manipulates its currency:flubbed confrontation

Washington Post,January 23, 2009 on page A8: It has cautioned that China should NOT be made a scapegoat in a time of crisis. Eswar Prasad, a senior fellow at the Brookings Institution said: "Things are going to get quite heated on the China-US front. This statement was clearly a shot across the bow... Some Republicans say Geithner's tax errors reveal larger character flaws. To have exchange rate conflict with China would not be in the best interest of the United States. The following points or pointers are written for the reader's awareness apropos of the issue of issues for US-China economic relations:-

1.Recession in one nation tends to be transmitted to other nations as we have been witnessing in the global scenes. Globalization re international trade of goods and services should be understood as the Law of Comparative Advantage known to students of economics.

2.International coordination of economic policies is significantly important in the 21st century for the benefit of peoples in trading nations. However,such operations may be elusive in a world of sovereign nations. Both USA and China are sovereign nations and both nations are members of the Security Council of the United Nations.

3.Protectionist policies will not cure the US trade deficit because they will cause the dollar to appreciate and they may provoke foreign retaliation.

Food for thought as metaphor for readers to be aware of such flubbed confrontation as "moxuyou de duikang" in Pin Yin system of romanization of the fitting and proper Chinese expression. "A Glimpse of the Chinese Language" www.rand.org may be a reference for phonetic equivalent of such Chinese aphorism.

Francis Shieh a.k.a. Xie Shihao,former Economist with US Department of Labor(1965) and Fulbright Senior Scholar,1989-1990.

January 23, 2009 at Andrews AF Base library, January 23, 2009 at 10.10 a.m.