[skyredoubt]

JohnInIndy in the other thread quotes Obama saying this in 2006:

It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Let me as patiently as I can explain why this statement is absolutely divorced from reality. Here goes, bear with me:

How do the foreigners get US dollars? They sell us stuff. There is no other way: they cannot print US dollars (although Saddam Hussien reportedly tried at some point )
When we sell less stuff to them than they sell to us we run what is called a "trade deficit" versus the rest of the world and they get to keep the US dollars they earned. So far so good. None of this has anything, absolutely anything to do with "Government’s reckless fiscal policies", unless you mean free trade and if you mean domestic government spending. In other words, even if not a single dollar was spent on Social Security, Medicare, defense, unemployment benefits, salaries of congressmen etc, the fact that we import more than we export makes the foreigners holders of US dollars.
Now, why do foreigners hold US debt? They want to earn return (interest) on those same dollars, just as you'd rather have your money in a savings account were it grows as opposed to a checking account. So, they "lend" us our dollars (that they earned via trade) back. In reality, what happens is that those dollars are entries at the Fed in what is called reserve accounts, which is just a fancy name for a checking account. When foreigners buy US debt, their electronic dollars are shifted from reserve accounts at the Fed to savings accounts at the same Fed, which are called US treasuries.
That's all. It has nothing to do with any reckless policies, unless you consider free trade a reckless policy (this is debatable, but it has nothing to do with US domestic deficits.) Actually, our trade deficit, under current circumstances, is on the whole probably beneficial to us: we get the real productive output from the foreigners in exchange for money. The downside is less employment at home. This is a separate issue.
Now you see why our President is either clueless or is pulling your leg?

[mikemike]

The government, and especially the federal government deals with both domestic policy and international relations. So any government policies making it harder or more expensive to produce domestically than it is in China are fair game for scrutiny. Also eligible is any failure by the government to hold China accountable for their trade barriers that prevent us from exporting to them.

Policies that I see making it more expensive to produce here than it is there:
-High minimum wage (gives us a disadvantage in industries requiring unskilled labor)
-Taxes on repatriation of profits (makes an exporting strategy less attractive than a JV or subsidiary strategy in international trade)
-Payroll taxes on US workers and businesses
-Environmental and worker safety regulations (not actually a bad thing in my mind but it is a factor in the trade equation)

Foreign policy failures:
-Allowing China to undervalue their currency
-Internet censorship (inhibits business of US internet and software companies in China)
-Permissiveness of Chinese military and corporate espionage and technology transfers
-Not responding to capricious trade barriers thrown up by the Chinese
-Not holding the Chinese accountable for the actions and atrocities of N. Korea and Myanmar
-Not pushing China to be more responsible when dealing with dictatorships in African nations

[skyredoubt]

Mike, while you might be right that any policy failure should be discussed, this is not what people usually have in mind when they say that "Chinese fund us". Do you think Obama was talking about minimum wage in 2006? I don't think so. People really do think that Chinese give us money to spend - which is nonsense: we don't need money we can create on our own in unlimited quantities. And Chinese got that money from us in the first place, of course.
That said, we can go over your list and discuss things. Some of them could be beneficial for one aspect of the economy and deleterious for others. When you lower minimum wage, for example, you also make your people poorer and allow more exploitation of labor, while your ability to remove it to the level of a Chinese worker is really questionable; there could be other things I am missing, haven't thought too much of that.
I am totally with you on payroll taxes and taxes in general. Payroll tax should be abolished completely and other taxes should be lowered right now (they might need to be raised later when we're close to full employment.) Again - this is not what people talk about when they talk about foreigners funding us.
Environmental and worker safety regulations - you said yourself.
Foreign policy failures could all be true to some extent but we don't have unlimited leverage there, sometimes none, really. Some have pretty much nothing to do with trade deficit.
Additionally, there is a school of thought that trade deficit is always a benefit for us. I cannot agree without reservations. While imports are indeed benefits and exports costs, the domestic workforce does suffer, at least in the short term (before it regroups and acquires new skills). But on the whole we're probably better off as a nation with the trade deficit as it is right now. This could change in the future.

[redrockcoulee]

I think you are missing the fact that interest paid out is money not spent within the country and is therefore not available for domestic investment. The Chinese can just as easily invest in Alberta Oil Sands or projects. The interest paid on the debt is money that could either be spent on other programs or not collected in taxes hence money borrowed do have a real cost to them. Printing instead of borrowing devalued the currency and creates inflation and at the extreme of that look at what happened to Germany in 1924 (before Hitler).

On the other hand the US pays about one half of the percentage of its budget on interest that the Canadian government does (6 compared to 15) and yet we went into the recession later, went down less and recovering quicker (now as many jobs in the country as before the recession). Much of your economic problems are internal and not due to government spending or the trade deficit and social programs, immigrants, Chinese. unions or environmental regulations are excuses to not look at the fundamental problems with the economy.

According to Wikipedia 27 percent of your federal debt is owned by foreign investors, 20.8 by the Chinese and 20.2 by Japan. So China owes 21 percent of 27 percent or 5.5% of it. 83% is owned to American investors and their income I assume would be spent or re invested in your country.

Lastly remember that oil is sold on the world stage in American dollars so all countries that need to import oil need American dollars. This also shores up the value of your dollar making your exports more expensive and imports cheaper (no idea of by how much). Canada usually runs trade surpluses with our southern neighbours mostly due to the export of raw materials which creates less jobs than the exporting of value added goods. We run larger deficits with the rest of the world therefore no surpluses on the final balance sheet.

[skyredoubt]

I think you are missing the fact that interest paid out is money not spent within the country and is therefore not available for domestic investment. The Chinese can just as easily invest in Alberta Oil Sands or projects. The interest paid on the debt is money that could either be spent on other programs or not collected in taxes hence money borrowed do have a real cost to them. Printing instead of borrowing devalued the currency and creates inflation and at the extreme of that look at what happened to Germany in 1924 (before Hitler).

I was not missing it - I pointed to the fact that talk of Chinese funding our spending is nonsense. Where does what you're saying contradicts that? Again, domestic deficit has nothing to do with Chinese buying our debt, so, anybody who says that you need to cut domestic spending (and we'll deal with this part below) because of the debt to Chinese doesn't understand what he's talking about.
Now, regarding that printing instead of borrowing devaluing the currency. This is not true, at least not true under any circumstances. In the economy running under capacity, as it is now, the bigger risk is actually deflation. Besides, if you look at the equation MV=PQ (Quantity theory of money - Wikipedia, the free encyclopedia), price level P (inflation) goes up with money M going up only if Q (productive output) and V (velocity of money) don't change in the ways that counterbalances that. Right now, for example, V is so small that despite a huge spike in M, we see no inflation. If increasing P leads to increase in Q, then, again, you'll have no or moderate inflation.
Point is, we don't need Chinese dollars to invest in our economy. US govt can supply unlimited amount of dollars to the economy and should only be concerned that those dollars go to productive or otherwise worthy purposes.
By the way, what happened in Weimar and more recently Zimbabwe has almost no applicability to our situation. These two were countries whose productive capacity was severely disrupted, with Weimar having to pay huge reparations in foreign currency and Zimbabwe with its agricultural sector wiped out. See details here, for example:

MMT: Fear of Hyperinflation naked capitalism

On the other hand the US pays about one half of the percentage of its budget on interest that the Canadian government does (6 compared to 15) and yet we went into the recession later, went down less and recovering quicker (now as many jobs in the country as before the recession). Much of your economic problems are internal and not due to government spending or the trade deficit and social programs, immigrants, Chinese. unions or environmental regulations are excuses to not look at the fundamental problems with the economy.

We're in agreement! More than that, if you are interested to look at the insights of MMT (Modern Monetary Theory), you'll realize that under most circumstances the US must run deficits. This comes from the accounting identity of sectorial balances:

Govt Deficit (Surplus) = Private Sector Surplus (Deficit),

where private sector includes foreigners. Since we have trade deficit with the foreigners, the only way for domestic private sector to run surpluses is for the US govt to run deficits. This is true simply by accounting identity. Every time US govt ran a surplus, the private sector went into deficit and debt which is an unstable situation, and every time a recession followed. See, for example, details here:

http://www.levyinstitute.org/pubs/ppb_111.pdf

According to Wikipedia 27 percent of your federal debt is owned by foreign investors, 20.8 by the Chinese and 20.2 by Japan. So China owes 21 percent of 27 percent or 5.5% of it. 83% is owned to American investors and their income I assume would be spent or re invested in your country.

Correct. Also, domestic debt numbers include a large part of debt that US government owes literally to itself thru programs like Social Security. This is not a debt at all but a wash. Finally, debt is nothing but an interest rate operation. It is shifting money between reserve (checking) accounts at the Fed into US Treasury (savings) account at the Fed. Some people think that debt prevents or at least postpones inflation, but there are reasons why this view might well be wrong (see New Economic Perspectives: What If the Government Just Prints Money?)

Lastly remember that oil is sold on the world stage in American dollars so all countries that need to import oil need American dollars. This also shores up the value of your dollar making your exports more expensive and imports cheaper (no idea of by how much). Canada usually runs trade surpluses with our southern neighbours mostly due to the export of raw materials which creates less jobs than the exporting of value added goods. We run larger deficits with the rest of the world therefore no surpluses on the final balance sheet.

Entirely correct.

[redrockcoulee]

skyredoubt

So why did not Britain and France just print off the money they owed to the United States if it would have not impact on their economies? your link MMT: Fear of Hyperinflation naked capitalism Has any country actually printed large increases of money unless they had extreme reasons to do so? If not they how do we know that greatly expanding the monetary supply is not harmful to the currency? These are simply questions about a single monetary theory being the only one and there is no need to answer these questions especially if you need to do any research.

Why not just eliminated all taxes and increase government spending by printing more money? And what about all the economic theories that are in disagreement with the one you bring forth?

Economics is not my field. I do know that at work when we discover a contaminated site we need to access its risk to health and the environment and do estimate the cost of either cleaning it up or maintaining it and these costs are charge to the government balance sheet regardless whether we do any spending on it or not until the site is totally remediated. This is your transfer of funds or accounting debt only. I also know that when we contract someone to come onto the base and build a building that they actually get paid for it and the government needs to have funds to pay for it.

I am not an economist but the Prime Minister is and he also loves DND but he has cut the budgets the last two years to keep the national deficit down. There must be a rational economic reason that he does not just print more money and fund us more. Of course he might not be rational and I for one have no desire to defend him on just about any issue.

Also during the period that the federal government ran deficits year after year we had recessions and boom times and during the decade of Martin as Finance Minister with surplus we had a small recession and boom times. Perhaps there is a correlation I am not seeing

[jeffkrol]

skyredoubt

So why did not Britain and France just print off the money they owed to the United States if it would have not impact on their economies? your link MMT: Fear of Hyperinflation naked capitalism Has any country actually printed large increases of money unless they had extreme reasons to do so? If not they how do we know that greatly expanding the monetary supply is not harmful to the currency? These are simply questions about a single monetary theory being the only one and there is no need to answer these questions especially if you need to do any research.

Why not just eliminated all taxes and increase government spending by printing more money? And what about all the economic theories that are in disagreement with the one you bring forth?

Economics is not my field. I do know that at work when we discover a contaminated site we need to access its risk to health and the environment and do estimate the cost of either cleaning it up or maintaining it and these costs are charge to the government balance sheet regardless whether we do any spending on it or not until the site is totally remediated. This is your transfer of funds or accounting debt only. I also know that when we contract someone to come onto the base and build a building that they actually get paid for it and the government needs to have funds to pay for it.

I am not an economist but the Prime Minister is and he also loves DND but he has cut the budgets the last two years to keep the national deficit down. There must be a rational economic reason that he does not just print more money and fund us more. Of course he might not be rational and I for one have no desire to defend him on just about any issue.

Also during the period that the federal government ran deficits year after year we had recessions and boom times and during the decade of Martin as Finance Minister with surplus we had a small recession and boom times. Perhaps there is a correlation I am not seeing

All social engineering...... what kind of state (ie productivity) would you get in a 100% welfare state... of course even that is debateable.......

Critics of the welfare state argue that such a system will make citizens dependent on the system and less inclined to work. However, certain studies indicate there is no association between economic performance and welfare expenditure in developed countries,[20] and that there is no evidence for the contention that welfare states impede progressive social development. R. E. Goodin et al., in The Real Worlds of Welfare Capitalism,[21] compares the United States, which spends relatively little on social welfare (less than 17 percent of GDP), with other countries which spend considerably more. This study claims that on some economic and social indicators the United States performs worse than the Netherlands, which has a high commitment to welfare provision.

Welfare state - Wikipedia, the free encyclopedia
A country is more than economic theory and is mostly smoke and mirrors anyways.....
The Problem with Printing Money — Economics Blog

The fact is, if the government cut out the middleman and used seignorage (i.e. the government’s power to levy an indirect tax on its citizens by simply printing more money) we would all be much better off (at the expense of the bankers).

JAPAN........

Japan has printed large amounts of money and bought back national debt over the last ten years. This goes by the fancy name “quantitative easing”. The idea is to drive down long term interest rates with a view to simulating demand. Unfortunately this ploy has had precious little effect in Japan (on inflation or anything else). One of the reasons for the non effect is not too difficult to fathom: holders of national debt regard it as SAVINGS – they are not going to run out and spend this just because a tranche of savings are converted from government debt to cash. They’ll just plonk the cash in a deposit account. Put another way, expanding the money supply depends crucially on what people do with the newly printed money. If they don’t do much with it, there will be no effect.

[Ira]

This stuff is too complicated for me.

I'm heading over to Beginners Q&A where the biggest problem is the flashing F--.

[mikemike]

Mike, while you might be right that any policy failure should be discussed, this is not what people usually have in mind when they say that "Chinese fund us". Do you think Obama was talking about minimum wage in 2006? I don't think so.

A politician or economist uttering the statement "Chinese fund us" is just an example of soundbite politics. Like I said and you agree the trade imbalance is a multifaceted problem that can be addressed with policy changes that favor certain interests. They are just fishing for donations and lobbyists who want to bend their ear on the issue.

At the end of the day it boils down to the fact that the economic relationship between the US and China is unsustainable and sooner or later something is going to give. If a diplomatically negotiated and gradually implemented approach is not taken it will be very disruptive to both of our societies.

[skyredoubt]

skyredoubt
So why did not Britain and France just print off the money they owed to the United States if it would have not impact on their economies? your link MMT: Fear of Hyperinflation naked capitalism Has any country actually printed large increases of money unless they had extreme reasons to do so? If not they how do we know that greatly expanding the monetary supply is not harmful to the currency? These are simply questions about a single monetary theory being the only one and there is no need to answer these questions especially if you need to do any research.

Note, first, that I never said that "greatly expanding the monetary supply is not harmful to the currency" - it could be and it could be not, depending on the circumstances. In a country with crippled productive base, increasing the money supply too fast will cause big inflation because productivity won't catch up. On the other hand, in situations where you can invest in production expansion, you should actually pump money into the economy to allow it.
The right answer is actually even more elegant: the size of the government deficit should be exactly the size of the private sector's desired surpluses. It will shrink and expand accordingly.
Now, back to France and England. First, they owed us in US dollars and so they could not just print those. They had to get them from trade, so, they had to give up their productive output in exchange for dollars that they used to pay off debt. The world also operated under the gold standard, so, your options to print money were limited.
That said, sometimes currency devaluation could the least of two evils. The European countries like Poland and Iceland that allowed their currency to depreciate (unlike Ireland, for example, which is on Euro) are actually doing much better now.

Why not just eliminated all taxes and increase government spending by printing more money? And what about all the economic theories that are in disagreement with the one you bring forth?

Taxes are what gives the currency its value. Without taxes people would not seek currency to extinguish their tax liabilities. The obvious way of looking at it is this: government spending is injection of money into the economy while taxation is destruction of money. If you only injected the money it would grow and lose it value to the point there people stop seeking it and move into more stable assets. This is what happens during big inflations. So, you use taxation to regulate the money supply. There is no free lunch.
Now, all economic theories are, of course, just that, theories. They try to describe how economy operates. You assess the theories on their track record because controlled experiments in economics are pretty much impossible. The orthodox economic theories continue to miserably fail to explain the economic reality. Take for example the recent crisis. Or, listen to all the people talking about how such and such debt-to-GDP ratio is unsustainable. They bring forth apocalyptic predictions because of our 50% debt-to-GDP. Then you ask then how come their predictions fail for Japan with 200% debt-to-GDP and 0% interest rates? Then you know they are missing the wood for trees. They concentrate on numbers that are meaningless without relation to economic realities.
One huge, and I mean it, HUGE, advantage of MMT is that is based on accounting identities that other economic theories simply fail to appreciate. Once you see the logic behind the sectoral balance identity that
government deficit (surplus) = private sectors surplus (deficit)
you realize that the MMT conclusions are based on firm ground and not on mathematical models that fail to describe observable reality.

I am not an economist but the Prime Minister is and he also loves DND but he has cut the budgets the last two years to keep the national deficit down. There must be a rational economic reason that he does not just print more money and fund us more. Of course he might not be rational and I for one have no desire to defend him on just about any issue.

I guess the problem is two-fold. One is that most people indeed do not understand how the monetary system operates and how to use its potential. The other problem is that there are powerful interests that don't want the people to realize what kind of potential their economies have. It is about the distribution of wealth and people that would want the money to flow disproportionately into some pockets.

Also during the period that the federal government ran deficits year after year we had recessions and boom times and during the decade of Martin as Finance Minister with surplus we had a small recession and boom times. Perhaps there is a correlation I am not seeing

What MMT would say is that, by accounting identity (that is, not as a matter of theory) in times of surplus, the private sector as a whole has to run deficit. That in itself does not mean neither boom nor bust. Besides, if the deficit is run by foreigners (your country has a trade surplus) then both domestic government sector and private sector can run surpluses. If, on the other hand, your domestic sector runs deficits, like during Clinton surpluses, then it turns to indebtedness to satisfy its spending and savings desires. You'll see great expansion of credit that will likely result in a crisis or a recession as the private sector will have to de-leverage (reduce its debt) at some point.

[skyredoubt]

A politician or economist uttering the statement "Chinese fund us" is just an example of soundbite politics.

Yes, and a scare tactics and utter bullsh&t. Which was the point of my original post.

[mikemike]

I guess the problem is two-fold. One is that most people indeed do not understand how the monetary system operates and how to use its potential.

Regardless of whether they are Ben Bernanke or a bus driver, I think what they want most out of the monetary system is stability and predictability. It is recklessly irresponsible for the Federal Reserve and the US Treasury to try and play games with the US Dollar. The fact the the US has been so stable and our monetary policy has been so conservative that we didn't pull a Poland or Iceland has been a reason for our currency fulfilling the old role of gold on the world monetary stage.

As a matter of fact, Nicolas Sarkozy and President Obama are meeting today to discuss the role of the USD as the world reserve currency. Recent monetary policy has shaken the world's faith in the USD and the federal reserve and if we aren't careful our currency will lose the coveted and enviable position as a reserve currency.

Yes, and a scare tactics and utter bullsh&t. Which was the point of my original post.

Maybe I am just naive and give them too much credit but I don't see it that way. I think its just a symptom of our media and attention span. The part where they go into depth on the issue in public addresses either gets snipped by speech writers or ends up in the cutting room floor of the nightly news to make room for an extra cialus commercial or an extended human interest segment on the lost dog that returned home after 4 years.

I'd bet a milkshake that by the end of the week the Sarkozy visit spawns more stories about what Michelle and Carla wore than the substance of the monetary policy discussion that is taking place.

[Frogfish]

Foreign policy failures:
-Allowing China to undervalue their currency - which benefits the USA in many ways - not least that

a) cheaper imports allow Americans to continue a luxurious lifestyle they would not otherwise be able to afford (if those same products were produced in the USA for example) .
b) many of those same products are being produced here by American and European companies simply for export to the West - however never a word is said against them by Western leaders, in fact to the contrary when US and European leaders address their chamber of commerces here they are full of praise and encouragement !
c) an overly fast strengthening of the RMB would lead to mass lays-offs, unemployment and unimaginable hardship for the 70% of the Chinese population that are peasants earning, in most cases, less than a dollar a day, potentially leading to outright rebellion and a disastrous effect on both China and the World's economy, 2008/9 would seem like nothing in comparison

-Internet censorship (inhibits business of US internet and software companies in China) - well for a start most of those companies would have to compete in Chinese (since the vast majority of the Chinese population either don't speak any English or certainly not enough to give them confidence to utilise Western websites, and software would have to be written in Chinese of course (which Microsoft etc. do anyway - over here though not from within the USA). You are also confused ... this is a communist country not a western democracy, most of the reasons (whether I agree with them or not, and mostly not) are to control ideology and state control not for commercial reasons.


-Permissiveness of Chinese military and corporate espionage and technology transfers - cough cough CIA ? Are you honestly suggesting the USA don't engage in similar tactics - that is naivety in the extreme. Most technology transfers are pacts between JV companies - US and European companies wanting access to the vast Chinese market and willing to forego long term advantages (by giving up rights to their technology) for short term financial gains. It's called business.

-Not responding to capricious trade barriers thrown up by the Chinese - let's not get into this one. A 3rd third country protecting itself from Western rapacious tendencies proven over decades of economically raping 3rd world countries for oil, minerals etc. To say nothing of the USA's own barriers in the fields of agriculture, mineral rights etc. etc.

-Not holding the Chinese accountable for the actions and atrocities of N. Korea and Myanmar. Get real. Should we also hold the Americans responsible for Israel's actions etc. etc. That is an absolutely outrageous and ridiculous statement. You hold up the First Amendment and then want to chastise a country for not controlling another ?!

-Not pushing China to be more responsible when dealing with dictatorships in African nations
Show me the USA's response to atrocities / genocide in African countries which don't have mineral rights worth exploiting !! That may be too harsh but I'd still draw your attention to the Geneva convention - which Western countries have used when it suits them to not intervene in the said atrocities mentioned above. China is a 3rd world country and developing nation - yet your irrational fear of their growth / economic power now imbues them with the civil responsibilities of 1st world countries it seems.

I was going to totally ignore this completely unbalanced, biased and typically Western view of China but I'm afraid I can't - Western media 'propaganda' , encouraged by politicians, really subjugates reasonable and logical thought in otherwise intelligent and reasonable individuals. It is ignorant posts of this nature, that I see on many on-line responses to US & British newspaper articles on China, that are simplistic in the extreme and depict just one, the Western, side of the issue.

[skyredoubt]

Regardless of whether they are Ben Bernanke or a bus driver, I think what they want most out of the monetary system is stability and predictability.

It doesn't mean they actually know what they are doing and whether their actions promote this goal. And the Fed has a dual mandate of price stability and full employment. Ever wondered why the latter one doesn't seem to be a priority?

It is recklessly irresponsible for the Federal Reserve and the US Treasury to try and play games with the US Dollar. The fact the the US has been so stable and our monetary policy has been so conservative that we didn't pull a Poland or Iceland has been a reason for our currency fulfilling the old role of gold on the world monetary stage.

No, this is totally backwards. The only irresponsible thing is not to use the potential of our economy to achieve prosperity for our citizens (in a responsible manner, without beggaring our neighbors and destroying the environment, of course). Who cares if the dollar is reserve currency or not. It is just convenient for the world to use it, but you're not better of as a result of that. Our trade balance won't change if for some (very unrealistic) reason the world switched to another currency. And what would that currency be, huh? Is there an economy the size of the US that could step in?
If we believe that economy starved of demand as ours with nearly 20% unemployment and underemployment should worry about world reserve currency more than getting all these people to work and productive growth, then our priorities are really screwed up.

Recent monetary policy has shaken the world's faith in the USD and the federal reserve and if we aren't careful our currency will lose the coveted and enviable position as a reserve currency.

Can you show me any evidence of that? Not some pronouncements of politicians, but real signals in the markets that any confidence has been shaken? I don't think you can. Our recent monetary policy - and I guess you are talking about QE - is nothing but an interest rate operation (remember - US Treasuries are the same as US dollars with interest attached and a maturity date). It might or might not work, but it doesn't and won't have any significant effect on the value or dollar. Markets are actually smart enough to understand that.

[mikemike]

cheaper imports allow Americans to continue a luxurious lifestyle they would not otherwise be able to afford

Holding down exchange rates allows us to live too luxurious a lifestyle and denies a more comfortable lifestyle to your fellow chinese as they are not able to afford more of the goods being produced in your country and from abroad.

any of those same products are being produced here by American and European companies simply for export to the West - however never a word is said against them by Western leaders

Plenty is said against them, they are constantly ravaged for shipping jobs overseas or off shoring by both the left and the right, but mostly the left.

an overly fast strengthening of the RMB would lead to mass lays-offs, unemployment and unimaginable hardship for the 70% of the Chinese population that are peasants

Yes, it would and holding it down as they have only builds up greater need for a revaluation, like pumping water uphill the yuan is building up potential energy that will be unleashed as kinetic energy once it is finally released. A careful approach would be beneficial like building a dam to capture some of that energy but simply letting it build will result inevitably result in sanctions at some point forcing the Chinese central bank's hand and releasing that energy as a destructive flood that hurts the chinese more than anyone else.

well for a start most of those companies would have to compete in Chinese

And they have, like google, but the need to censor so much is a uniquely chinese issue and participating in other practices of disclosure of internet activity can result in civil and criminal charges in the US as well as ethical compromises that are unacceptable to many technologists.

US and European companies wanting access to the vast Chinese market and willing to forego long term advantages (by giving up rights to their technology) for short term financial gains. It's called business.

Its short sighted and it is something that the government can control. Technology transfers were tightly controlled during the cold war but they have been relaxed, at the behest of companies doing business and trying to open up shop in China. Our politicians need to be stronger on this issue because it has been a one way street for two decades and the benefits of it need to flow both ways.

Should we also hold the Americans responsible for Israel's actions

Yes, we should. The US engages in peace talks and tries to work on that situation a 1000 times more than the chinese engage the North Koreans. If the the N. Koreans deploy chemical, biological, or nuclear weapons against the south I can almost guarantee you that US, Japan, S. Korea, and some EU states (all of whom produce lots of stuff in China) would implement severe sanctions against the Chinese for enabling the North for so long.

Show me the USA's response to atrocities / genocide in African countries which don't have mineral rights worth exploiting

The foreign corrupt practices act and economic sanctions. A lot of the places and people the chinese deal with cannot sell their stuff to the US. In a way US businesses and consumers are laundering access to these materials through the chinese factories, just like we are allowing you to destroy your environment on our behalf by producing goods that could not be produced that way here due to regulations. In 100 years, we will see that this arrangement did not help the US, the Chinese, or 3rd countries that supply the chinese with raw materials to produce goods for the US.

----------------------------------------------------------

I see an unsustainable situation between the US and China and between the Chinese Government and the Chinese People. The $900 Billion in US treasury bonds held by the chinese government represents money earned by the people and intercepted by the leaders (there is even more that has been intercepted and spent for the leadership's pleasure). One thing that concerns me is that China seems to go through political upheaval every 50-70 years and the current government hasn't found a way to share the newfound prosperity with the countryside where these upheavals traditionally come from.

There is a saying, "more money, more problems," and the we will certainly see this play out over the next decade with China. You might feel that your country is still a developing country but the rest of the world feels that you have arrived as a world power and it is time to start acting like a mature and responsible country on the world stage. A more nuanced look at china will see that there is actually a developed country along the coast with ~400 million people and a developing country on the interior with ~900 million people.