Harold James: Obama Can Spur Asia to Greater Heights
[Harold James is professor of history and international affairs at Princeton University.]
RICHARD Nixon has been dead for 15 years, but he is making another comeback in the US. The 37th US president believed that international monetary relations are unlikely to be transformed by talking. Instead, he thought that radical unilateral action was required. Today pressure is growing for the US Treasury to follow Nixon’s misguided example and issue a finding, due by today, that China is manipulating its exchange rate.
From today’s perspective, the problems of the Nixon era look manageable. The world’s currency reserves were held in a slightly lopsided way: at the end of 1971, Germany had 17,2bn in reserves and Japan 14,1bn — 14% and 11,5% of the world’s total, respectively. In 2008, the last year for which figures are available, Japan held 23,4% of the world’s reserves and China held 44,8%.
In 1971, Americans were feeling a German and Japanese export surge, with Germany’s current account surplus at 2,1% of gross domestic product, and Japan’s at 4,4%. In 2008, Japan’s surplus was 3,2%, Germany’s 6,7% and China’s 9,8%....
China today is not isolated in the way Japan was in 1971. On the contrary, it will find an easy way to turn its resentment of US pressure into an issue of regional solidarity.
Instead of leading to a US renaissance, the “Nixon shock” produced theories about US imperial overstretch and decline. Today, the fastest way to make this “the Asian century” is to give Asian exporters a similarly unpleasant shock to spur the creation of an Asian community of “surplus” countries.
Can US President Barack Obama, fresh from his victory on healthcare, really afford to turn himself into Nixon?
Read entire article at Business Day (South Africa)
RICHARD Nixon has been dead for 15 years, but he is making another comeback in the US. The 37th US president believed that international monetary relations are unlikely to be transformed by talking. Instead, he thought that radical unilateral action was required. Today pressure is growing for the US Treasury to follow Nixon’s misguided example and issue a finding, due by today, that China is manipulating its exchange rate.
From today’s perspective, the problems of the Nixon era look manageable. The world’s currency reserves were held in a slightly lopsided way: at the end of 1971, Germany had 17,2bn in reserves and Japan 14,1bn — 14% and 11,5% of the world’s total, respectively. In 2008, the last year for which figures are available, Japan held 23,4% of the world’s reserves and China held 44,8%.
In 1971, Americans were feeling a German and Japanese export surge, with Germany’s current account surplus at 2,1% of gross domestic product, and Japan’s at 4,4%. In 2008, Japan’s surplus was 3,2%, Germany’s 6,7% and China’s 9,8%....
China today is not isolated in the way Japan was in 1971. On the contrary, it will find an easy way to turn its resentment of US pressure into an issue of regional solidarity.
Instead of leading to a US renaissance, the “Nixon shock” produced theories about US imperial overstretch and decline. Today, the fastest way to make this “the Asian century” is to give Asian exporters a similarly unpleasant shock to spur the creation of an Asian community of “surplus” countries.
Can US President Barack Obama, fresh from his victory on healthcare, really afford to turn himself into Nixon?