The Great Game is now Chinese Checkers

This week’s visit to our friends at Beijing’s People’s Daily will give us a number of snippets to try to piece together. First, this note that German Chancellor Schroeder promises to work toward lifting EU arms sanctions against China. Naturally, Schroeder also mentioned the EU’s commitment to the “one China policy”.
Next, Chinese consumers are expected to buy over 5.8 million cars this year, virtually all of which, I think, will be produced in China itself. Which means that, naturally, Chinese demand for oil will remain quite high this year.
Why would Beijing’s CPC House Organ feel the need to tell us the view of the President of the Federal Reserve Bank of Minneapolis view that inflation in 2005 will be kept low? Because, as EU Trade Commissioner Peter Mandelson tells us, “we all need to be China experts”.
And therein lies the game. The new economic ballgame is China. We have made them so, by running such large trade and budgetary deficits. They may, and they will likely, start to impose fiscal discipline on us at some point during the “second term” by starting to lay claim to the immense financial assets they hold, and the leverage they have vis a vis our currency. And they may well use this economic leverage to exact political concessions.
China is concerned with our inflation rate to preserve its own investment here, and of course, because if we start going all Weimar Republic and printing money, we can send the world economy into chaos. We will, of course, continue to watch strong oil demand (from China, helped by idiots here who drive SUVs) keep oil prices high, and our growth accordingly sluggish.
But mostly, we will watch Chinese power slowly rise as China sits on the sidelines doing nothing, while we bleed money and blood in a misguided quagmire in Iraq, and wherever else “the Bush Doctrine” (if he gets a doctrine, shouldn’t he at least be able to spell doctrine?) takes us… Iran or Syria, perhaps? Its back to Sun Tzu– the best wars are those never fought and the objective simply falls into your lap.
The Great Game is being played now, right in front of all of us, only the game is between international grandmasters and the Crawford Nursery School after-school gaming club. Any guesses as to who might be winning?