China is stirring: why now?

He says that skyrocketing Asian trade and investment in Africa is part of a global trend towards rapidly growing commerce among developing countries.

“Asian exports to Africa are growing at 18 per cent per year, faster than to any region in the world. China and India’s foreign direct investments in Africa are more modest than trade flows, but they are growing rapidly,” Broadman said.

Paul Craig Roberts wrote in August 2005, that “China already is a world power. China holds enough US government debt to have the dollar and US interest rates in its hand.”

Paul Craig Roberts is an economist and a nationally syndicated columnist. He served as an Assistant Secretary of the Treasury in the Ronald Reagan Administration (1981-1989). He is a former editor and columnist for Business Week, The Wall Street Journal, and the Scripps Howard News Service.

China “owns” a large chink of US debt - second only to Japan. The wars in Iraq and Afghanistan are funded largely on “borrowed” money from China.

This according William Schneider in The National Journal: “The US budget deficit is financed by borrowing. More and more of that money comes from China, now the United States’ second-largest lender, after Japan. China’s investment in US government debt has more than tripled in the past five years, from $71 billion in 2000 to $242 billion in 2005.”

Is that a problem? No, says the director of the Congressional Budget Office, Douglas Holtz-Eakin. “Dollars all look the same,” he added. “Their ultimate source doesn’t matter.”

William Schneider is the CNN’s senior political analyst. He is also a resident fellow at the American Enterprise Institute in Washington, DC, and a contributing editor for the Los Angeles Times, National Journal, and The Atlantic Monthly.

Testing the waters

China is “feeling out” the international response to many of its new initiatives. For many years the US Pentagon has asked that China become more open and forthcoming about its military plans and investments. Just recently, China has become more “transparent” about its military spending and its priorities.

Just after Christmas, 2006, China released a new “White Paper” on its defence intentions. “China will not engage in any arms race or pose a military threat to any other country,” the 91-page white paper said. “China is determined to remain a staunch force for global peace, security and stability.”

“The struggle to oppose and contain the separatist forces for Taiwan independence and their activities remains a hard one,” said the report from the State Council, China’s Cabinet.

It indirectly criticised the United States for promising Beijing that it will adhere to the “one-China” policy, “but it continues to sell advanced weapons to Taiwan, and has strengthened military ties with Taiwan.”