Treasury Secretary Henry M. Paulson has views contrary to four leading Democrat and Republic Senators in tackling the nuance of artificially kept low values for the Chinese currency Yuan, the root cause for burgeoning trade imbalances between the U.S. and China.
In open discussions with the press, in the light of these Senators proposing legislation and stronger actions than empty rhetoric, Paulson stated: 'I appreciate the frustration with a large section of policy-makers in the U.S. from our ongoing discussions, patience of which is increasingly running low as no meaningful actions delivered. The problem is larger than what's popularly projected. We have defined free markets globally as markets that suit our domestic requirements; we term democracy to be successful when people elsewhere elect our chosen party to rule them, similarly we define manipulation of currency when other than the U.S., no one else can manipulate that currency, not even that country itself. In case of China, in-spite of all of our overt and covert operations; we have so far failed to manipulate the Yuan. And the United States of America is not something that can accept failures.'
He further added: 'Take a look at Iraq, and you understand what I mean. We wanted to bomb the Yuan free from under the control of China; we even funded secret CIA aid to boost the Yuan; however nothing apparently has worked so far. The worst two failures of the Bush-administration so far have been we could not bomb Bin Laden and China to get them accept our gifts, for one we wanted to bomb him out; for other we wanted to bomb it up. So I believe legislation also does not have much chance to get back our birthright to manipulate Yuan, just like it has so far failed us to get Bin Laden though we legalized our war on Iraq and Afghanistan only to get that man. We need different strategy here, and that's what I have been doing since last many months.'
Reacting to these developments, US Secretary of State Condoleezza Rice, in her favorite holiday destinations in the peaceful serenity of the Middle-East commented: 'Trade should be mutually beneficial. We were so long comfortable with the arrangement where we keep the monopoly to export money and others compete to export goods and services to us; however China has taken that too far by gaining a monopoly over other exporters. We would still love to import goods from China as we practically don't have any alternative as our industrialists have smartly killed domestic manufacturing industry; and opened shops in China to be more profitable by having better cost control. We would love to see the birth-pangs of a new Yuan printed in the U.S.; however what we have been witnessing is the birth pangs of massive dollar reserves in China that resemble the twin of our original Federal Reserve in China. Lebanon and the broader Middle East have benefited enormously from my recipe of birth pangs a year ago; however still we see reluctance in others to adapt to my sure-shot mode of diplomacy. Irrespective of others liking to have birth pangs or not, Bush-administration would consistently provide new birth pangs to any issues and challenges anywhere around the world. Without birth pangs, no solution is a solution.'
Rice, who were otherwise feeling frustrated with her job that primarily focused on the same unchallenging issue of establishing peace where peace is abundant anyway, in the Middle East, loved this new challenge of diplomacy with china, and further added: 'Paulson is the right man because of his pedigree with Goldman Sachs. In his time, that investment banker made a lot of money by overseeing how domestic firms can profit more in China than in the U.S. from their overseas investment decisions. However all that has not yet been to the scale of a birth pang. Where ever no solution works, birth pangs are bound to work. Socialist China is witnessing the birth pangs of a capitalist era, whereas Capitalist America is resorting to socialist measures within our borders. Ask Chinese firms to invest in the U.S.; and I will personally show the way.'
While responding to a media query that asked what does she propose as others are increasingly skeptical of following her birth pangs model after its success in the Middle East; she answered: 'I understand and appreciate others concern in following my model. To prove that birth pangs of a new China with a stronger Yuan can really work; I would undergo myself through the birth pangs once with Chinese cooperations.'
As media was baffled by this answer, she further clarified 'After that, you will see a new
Condoleezza Rice. And with a new look and my new born baby, parts of which will be imported from China again as we can't produce a baby without Chinese imports, I would advice Paulson to negotiate whether we can pay the Chinese in Yuan for our imports from China. I would be more kind in matters of trade than in matters of conception. With the example of my baby for which I won't be paying the Chinese anything as it suits them as well for their one-child policy; we would negotiate to have printing presses to print Yuan specially for paying the Chinese to pay their currency against their goods. Headquarter of the Bank of China would be next to the Federal Reserves building; and that alone would solve this problem. And that's what I call the birth pangs of a new China within the US of A.'
With mushrooming Chinese exporting firms, tremendous interests have come to export a baby to Ms. Rice. Chinese government has also announced special incentive to the firm or individual who grab this order.