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We don't live at -- on the show because I think China.
Will -- huge role in what -- here -- time really really is gonna start to give her more limited to what's happening in Europe.
Which is why going -- he's back author of nuclear showdown -- -- takes on the world.
But you had a story.
About zero sum game your blood on your blog that it should America been following more of China's leave.
You know what we should be doing is listening to what the Chinese say you know young -- tong who wrote this in the New York Times.
Prominent international relations expert says well conflict between Beijing and Washington is inevitable the -- used and he said we're in this zero sum game which means that if China -- America loses now we don't think that when we think win win everybody can sort of get themselves better.
If we have free trade free markets all the rest of it.
But the Chinese are playing a very different game from the rest of us that we've been trying to integrate the Chinese into the international system and they said.
No -- we want to change the system in ways that won't make you unhappy.
But some of the least they're changing are just not legal -- -- counterfeit issues with Nike we.
You know -- -- Altria had -- cigarettes out their for a while apple is having its own issues right now.
-- not -- fair game.
-- they certainly are they know what they're trying to do is steal technology they're using the most predatory trade practices like these bans on rare earth exports to Japan and the United States.
They got the biggest programme of manufacturing subsidies in the world a lot of what they're doing is not comply with -- World Trade Organization obligations.
This is not a good story you know we sort of try to tell ourselves only to the Chinese are gonna be changed by trade.
Well may -- but what they really try to do in the interim is to undermine the free trade system in the world and that's not good.
-- -- -- -- -- Multinationals to pull out of -- because many are you know so many have moved did is it just me come so daunting and so.
Did little to do business they're gonna say no -- fifth celular.
Gonna pull out the reason is that the Chinese Government you know have this policy of reform and opening up and that created three decades of prosperity.
But right now Hu Jintao the current leader is trying to close the country down and on balance he's been going down.
Not reform but anti reform because really what they wanna do is they wanna create national champions state enterprises that are the largest in the world in -- sectors.
-- -- trying to reserve domestic opportunities.
For state enterprises which means of foreign companies.
Well thank you for your technology your know how but good but so it's not even the technology.
They're they're keeping the -- RA IRA except I -- you say we got some good numbers last night.
Well it's got some interesting numbers what happened is every month or so the bureau of national sisters comes out with his stump of numbers.
Then the dump and this time was inflation was a big story it dropped from five point 5% in October of four point 2% -- in November.
Normally that's it.
Good number but what.
Really it says is why it drops so fast -- of short period of time well I think because decked out economic activity is really on the downswing and -- -- confirmed and some of the other numbers.
Industrial output was up but it wasn't up nearly as much as people thought car sales were down we're gonna see some other numbers on exports and a few hours though is probably are not gonna be too good.
So inflation fine just -- people are buying -- I think -- you know it is we're gonna have to sort of Parse through these numbers but in question was about six point 5% in July.
And it stay that way for a couple months and then all of a sudden both October November.
Big drops in question now Chinese inflation is probably double what they tell us.
But this story is not what the real numbers and -- is the velocity -- the fall because that's saying that on a month to month basis the Chinese economy is contracting.
You know -- Best we've got growth in May be the low single digits.
But probably the economy is actually getting smaller.
That's my that's it over reaching problem I think with China right you can't believe the numbers you -- -- the -- the financial statements and yet.
We take the risk because labor's cheap products can be it's turned around very quickly so I guess it's it's a -- -- story and -- also right now the risk is getting greater and the problem is that inflation is a good story.
But wage rates are going well off and that means that companies either are doing one of two things you know they're basically along the coast in China.
Well they're either going inland where things are cheaper or they're going to Vietnam and Bangladesh or Mexico and you know.
Think about that some of them -- -- coming back to North America so essentially what we've got is Chinese manufacturing is that this inflection point.
It's gonna have to rise up the value chain but when it's gonna do -- a lot of the manufacture and which is really the core of China's economy is really gonna just scatter around the world.
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