International Chicken, Anyone?
This week Clyde Prestowitz of the Economic Strategy Institute, formerly a senior trade negotiator in the Reagan administration, hypothesized the following (via American Prospect):
In a future crisis involving the tense China-Taiwan relationship, the Chinese ambassador suggests to Secretary of State Condoleezza Rice that maybe the United States would like to move its warships 500 miles away from Taiwan. Rice demurs. The next day, the Bank of China sells a few — just a very few to get our attention — U.S. Treasury securities. Money markets reel.
Would the Chinese play such a risky game? They have their own interests, geopolitical as well as economic. They are certainly not an American pawn, less so with every passing year. Miscalculations have happened in world economic relations before, and with calamitous results.
(thanks to Mercury Rising)