With his recent trip to Asia coupled with his endorsement of India being made into a permanent (rather than two year) member of the United Nations Security Council it is safe to assume that Obama's plan will be to play the growing Indian economy as a counter to China's market manipulation practices of the last decade. Asia's devaluation of the Yuan has affected all global economies negatively but none greater than its neighbors. India possesses a slower paced but more rounded economy with regard to China's and the potential for American business expansion and job creation is high. Investment into an Indian economy seems more secure in the immediate future and more lucrative in the long term than a Chinese market. Being solely dependent on their exports China needs to desperately find a way to balance out its economy before they run out of time. India also offers a government more willing to sit at a negotiating table with the U.S., oh and by the way, they also happen to be a Democracy. It will be interesting to see China's reaction over the next few day's. Will Obama's gamble be enough for the Premier to release the tether latching the Yuan to the Dollar or will their reaction be something unpredicted and unprecedented?
I thinks trying to use India as a wedge against the rising power of China but he clearly receive any immediate benefit from this strategy. The world seems more angry at the U.S. Federal Reserve's recent move to infuse billions of dollars into the American economy by creating money and weakening the dollar thereby making American exports cheaper overseas and foreign imports more expensive, This American manipulation of currency receive much more attention than the continued Chinese undervaluing of their currency.
ReplyDeleteTo make matters worse Obama was not able to close the Korea American free trade deal which has been pending congressional approval since the latter days of the Bush administration.
The bottom like appears to be is that America's global position is becoming weaker as China is rising. This is the new reality we must all face.
Clearly and I think it is now apparent that he wishes to propel India past China over the next 25 years or so.
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