"Government authorities set up internet censorship against information about Wukan, Lufeng and Shanwei."

Damn it...I was entrapped!!!

> xeno syndicated wrote:

> The last thing western governments want is for their propagandist media outlets to cause a diplomatic row with China over human rights issues, lest the Chinese regime starts calling in all the debt it's holding over the west.  When will freedom-loving people realize what is going on, I wonder?

*sigh* This again...

1: Remember the whole "China is devaluing their currency" thing?  How do you think that scheme actually works?  China increases the value of  the US dollar relative to their currency... by massively buying US debt (which increases demand for dollars, because the dollars are required to purchase the debt).  So... if China were to call in their debt... it means they wouldn't be able to perpetuate a factor which has greatly helped their international trade position.

2: The act of "calling in" debt on a nation is more difficult than doing so with an individual.  For China to effectively dump their bonds without taking a massive loss, they would need to find a buyer for $1 trillion in US debt... which is impossible in any short run scenario (hence why it's a dump).  Effectively, then, the scenario means China would have to essentially write off $1 trillion... because, by all accounts, China dumping their bond holdings would mean the asset is relatively worthless, chasing a good portion of potential buyers out of the market.

More importantly, however, is the trade relations.  China is extremely dependent on international trade to keep its political situation stable.  Trade keeps its export growth going, raising China's per capita GDP, keeping a big portion of the population happy.  If international trade slows down (perhaps as a result of China's largest trade partner suddenly seeing a financial crisis created by a Chinese dumping of bonds), China loses a huge market for its goods... meaning a big loss to its prospective growth... no growth=people become unruly (think Middle East).

3: Worst case scenario... the US says "no... go ahead and try to take what we owe you."  That's the funny thing about debt... in its essence, it only operates effectively in a world in which both sides fully recognize the rule of law.  International politics doesn't work like that.  Sure, the situation I described above would be a fiscal disaster for the US... and would probably mean the US government could never borrow a cent for any sort of decent interest rate... but it's not the end  of the world.

Long story short... I doubt China's holdings of US debt are a political leveraging tool against the US.  More importantly, they're an important piece of China's economic strength, both in that they help China gain leverage on the currency market and because buying the debt stabilizes the US financial situation, allowing China to keep its biggest trade market afloat (while gaining a little return on investment on the side...)

> Zarf BeebleBrix wrote:

> > xeno syndicated wrote:

> > The last thing western governments want is for their propagandist media outlets to cause a diplomatic row with China over human rights issues, lest the Chinese regime starts calling in all the debt it's holding over the west.  When will freedom-loving people realize what is going on, I wonder?

>*sigh* This again...

Smackdown alert... very nicely down Zarf.

Might I add, China and the United States are entangled in a deep if uncomfortable embrace.  Neither country can really harm the other without hurting itself worse.  McDonalds theory of world peace and all.  On the thought though, imagine that China does decide to drop the bomb.  Big deal.  The US's debt is denominated in a currency it can easily print.  Worst case scenario, a one-off bout of inflation that doesn't really portend long-run problems.  It's structural problems that drive accelerating inflation... a one-time event like China dumping bonds and the printing presses rolling in response will cause some inflation, but it shouldn't much accelerate the rate of inflation.  More likely though, Europe swoops in and picks up the bonds (probably with our support) and there's really no impact on markets whatsoever.

It's a scary thought, China dumping our bonds, but we've got multiple ways to effectively deal with it without much hardship.  For China though, such dumping would effectively wreck their export economy.  Suffice to say I don't see this happening in my lifetime and I'm not particularly worried if it does.

wukan clan ain't nothing to smurf wid?

@wornstrum:
People I know in your country say different.

"but they are usually in small economic niches (otherwise western media is all over it).
And the lack of news doesn't necessarily mean a coverup, just means that either protests are small, or they aren't happening as frequently as you suspect..."
Most countries in this situation look the same. Nothing happened until after the revolution and then everybody is surprised "we didn't know..." Western media is closely guarded and monitored by the secret police, its hardly a secret!

they have betrayed the revolution!!

hang on, somebody knocking on my do