Official delegations of 60 countries, including more than 40 heads of state, came at the opening of the Sochi Olympics. It's a larger number than it was at the combined Games in London (2012) and Vancouver (2010). However, Barack Obama has ignored international sports festival, and his acquittal surprised everyone with its immaturity... Naturally, political scientists have their explanations.
17 February, 2014
The U.S. President said he chose not to attend the Winter Olympics in Sochi, Russia, in part because he didn’t want to distract from the competition, he said in an interview.
“The folks that people are actually interested in seeing are our incredible athletes,” Obama said in an interview.
The Western media implies an idea of semi-official version of “boycott. This is the White House’s disagreement with the amendments to the Russian law “On protection of children from information harmful to their health and development.”
But perhaps one of the main reasons of the Obama decision is unwillingness to meet with the head of the People's Republic of China? During six months, Obama purposefully miss events involving Xi. Surrounded by many foreign counterparts, U.S. President is afraid of the Chinese leader's questions, because he doesn’t have a clear answer.
As U.S. strategic thinking gradually matures, it is increasingly responding to major global trends with the aim of shaping a new international system; calls for a more flexible China policy are also on the rise. The U.S. sees China as its main competitor and partner in the new international system; as it uses Japanese support in launching its new strategy, U.S.-Japanese relations will become more unstable. In President Obama's second term, new features are appearing in the global strategy of the U.S., the core of which is a rebalancing of its strategy toward the Asia-Pacific region.
China expressed “regret” last year in December that South Korea had extended its air defense zone to partially overlap with a similar zone declared by Beijing two weeks earlier that has raised regional tensions. The Obama Administration has announced that it is backing Japan’s claims on the disputed Senkaku/Diaoyu island chain in the East China Sea, raising tensions in the standoff between China and Japan. U.S. warplanes and Japanese civilian planes have both violated the “airspace defense” zone that China has set up in the area. China has warned it serves a right to take action against future violations. China has condemned the U.S. actions as “irresponsible,” and there are fears of clashes originating from the dispute. Such a clash clearly benefits no one, however, and while a lot of bluster is to be expected on all sides, escalation would take a lot of additional blundering. China currently is the U.S. economy’s largest creditor. While it was successful, deciding among others the employment problem of China's huge population, Washington turned a blind eye even to political differences. However, by the autumn of 2013 it has become apparent that the White House is weakly controls the U.S. economy, and the state default is a matter of time.
The national debt of the United States is the amount owed by the federal government of the United States. On December 12, 2013, debt held by the public was approximately $12.312 trillion or about 73% of Q3 2013 GDP Intragovernmental holdings stood at $4.9 trillion (29%), giving a combined total public debt of $17.226 trillion or over 100% GDP. As of January 2013, $5 trillion or approximately 47% of the debt held by the public was owned by foreign investors, the largest of which were the People's Republic of China and Japan at just over $1.1 trillion each.
When public debt is rising, the President comes to Congress. Negotiations begin. The aim is to persuade both Houses of Parliament to pass the legislation to increase the debt ceiling. Last year in October, the United States once again walked up to the precipice of a debt default, and once again the world wonders why any country, much less the world’s largest economy, would endanger its financial reputation and thus its ability to borrow. Though a potential global financial crisis was averted at the last minute, one notable development has been a string of warnings by Chinese officials. Prime Minister Li Keqiang told Secretary of State John Kerry that he was “highly concerned” about a possible default. Yi Gang, deputy governor of China’s central bank, warned that America “should have the wisdom to solve this problem as soon as possible.” An opinion essay in Xinhua, the state-run media agency, called “for the befuddled world to start considering building a de-Americanized world.” These statements, unusually blunt coming from the Chinese, show that repeated, avoidable crises threaten the privileged position of the U.S. as issuer of the world’s main reserve currency and risk-free debt. Xi wanted to personally talk to Obama at the APEC summit, which took place in October. But Obama did not come, referring to the part in the budget debate. As a result the Congress pushed debt ceiling deadline to 7 February, 2014, the day of Olympic Games opening.
China’s holdings of U.S. Treasuries increased $12.2 billion to a record $1.317 trillion in November, data released January on the Treasury Department’s website showed. China’s swelling foreign-exchange reserves, reported today to have reached a world record $3.82 trillion at the end of December, may sustain the nation’s appetite for U.S. debt.
On the one hand, huge sums of money show China's economic power. However, it is also a heavy burden, as the control under the gigantic reserves doesn’t give a special variety of options. If the Chinese had a global sell the dollar, it would have brought down the dollar’s cost and undermined the Chinese currency reserves. Therefore, Beijing can only continue to lend to the U.S. economy by buying more and more U.S. government bonds for “their” dollars. What this all means is that China and the U.S. Treasury remain locked in an embrace from which it is very hard for Beijing to escape, Time writes.
Strangely, though, why do journalists forget about what will happen when China will come out of it. Albeit slowly. (“The Way of a thousand miles begins with a single step,” Confucius said). Indeed, although U.S. and Chinese economies are interdependent as possible, the latter is in a far better situation. The United States has no choice: there is nothing to replace the Chinese investment. There is no other player in the global market which could have satisfied the domestic U.S. consumer demand using their goods. There is no country worldwide that could exchange their products for dollars and immediately return them to the American economy in exchange for other government bonds of the U.S. Treasury.
Therefore, nevermind if American journalists have illusions, the fact is that the United States are a drug addict, hooked on “Chinese needle.”
Giving all the above, it becomes clear why Xi Jinping had every reason to worry about the next U.S. technical default, scheduled for February 7. It’s logical to assume that Obama has not arrived in Sochi for fear of face the Chinese claims. After all, with all the advantages, the first black U.S. President isn’t a master of the Impromptus. Such squabbles, in the presence of high-ranking third parties, would force the White House to be tough here and now. Accordingly, a force majeure like it could push China to take more decisive actions against “Americanized world.” Primarily, Chine could start doings aimed to the beginning of the getting rid of U.S. bonds and dollars. Therefore, the U.S. President has to significantly limit its foreign policy publicity to avoid this.
Senate approves suspension of U.S. debt ceiling. Bill suspends cap on Government borrowing through March 2015.
This means that the problem of the likely U.S. default again is not solved, but postponed.
Sooner or later, Beijing, despite the traditional conservatism, will abandon legacy of previous leaders generations and proceed to the gradual reserve diversification.
The question is when it will happen. But in this case, the U.S. market can face chaos. The U.S. economy will be deprived of cheap Chinese products and cheap Chinese dollar. Consumer prices and lending rates will increase, and millions of Americans will go bankrupt overnight. On the other hand, the Chinese dumping of the dollar in foreign markets will cause a depreciation of the U.S. currency, which immediately affects the Pentagon’s opportunities, jeopardizing the U.S. military and political ambitions. In particular, in the Asia- Pacific region... It depends to a greater extent on the White House, how fast China will enact their economic superweapon.
In the meantime, we can say that the historical fact has happened. Beijing is no longer afraid of Washington, but vice versa. Consequently, the role of senior partner finally moved to China in this tandem of the two powers.