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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (37936)	9/7/2003 2:26:42 AM
From: energyplay	Read Replies (2) \| Respond to of 74559

Hi Jay - I see the US/China relationship become more stable, as the countries are increasingly tied together by economic and strategic necessity. Besides the obvious ecomonomic dependence , where US consumption drives growth in China and most of the world and China and Japan buy US bonds to keep their currencies down, there are other strategic alignments. If North Korea attacks the South, it hits part of the production chain (flat panels, semiconductors) for China & US computer industry, many of the end users of subassemblies (car makers) and POSCO, a major steel supplier to China. Stabilizing the Middle East to assure reasonably price oil supplies benefits China, both directly and in keeping the world economy going. Notice that there is less talk about the Taiwan / China conflict anymore.... I expect that after he 2004 elections, we will see some major US/China Cooperation initiative, on security, maybe sapce exploration, etc. The economic deal might be along these lines - US low end manufacturing jobs keep going to China, but high end services - finance, insurance, legal, engineering, accounting, etc. will be bought mostly from US firms (who in return will outsource some of this work to China instead of India or Ireland) The Europeans get their ox gored on this - their market isn't big enough and is seen as too protecionist to cut this sort of deal. Also, the US often has the better technology, systems, and depth of captial markets that Europe lacks in many areas. The Europeans firms also don't have the flexibility to outsource jobs to China as easily as US firms... Other deals might be certain cooperation on military technology in return for more restricted sales to unstable Muslim countries and more orders for Boeing and Canadian aircraft... Another class of deals would be closer cooperation of US oil companies with Chinese oil companies.... ********** Since the Nixon - Chou En Lai (sp?) meetings, relations have been improving on a long term basis. Post 9/11, and especailly the Axis of Weasel business with France and Geramny, there has been a serious re-evaluation of what the US strategic interest is. Demographically, much of Europe has some very serious issues - many countries are well under replacement population growth. The European welfare stae is not adapting well to modern business and technological cahnge. However, with three exceptions - Indonesia, Ecuador and Norht Korea - every country on the Pacific is doing well.