The political rhetoric between the United States and China has heated up once again. Just last week, Premier Wen Jiabao chastised America's call to de-peg the Yuan as well as it inflationary monetary policy, "I understand that some countries want to increase their exports, but I don't understand the practice of depreciating their currency and forcing others to appreciate theirs in order to accomplish this... I think this is a type of trade protectionism."[1] Referring to the both the recent bill being considered in Congress to name China a 'currency manipulator', which would activate certain parts of the WTO treaty that China signed when it joined in 2001 as well as some of the 'quantiative easing' methods being used by the Federal Reserve which has increased the money supply and some say will lead to a declining Dollar.
And following this, we have also seen high-level American diplomats become increasingly involved in Google's recent exit from the Chinese market. By redirecting to the uncensored version hosted in Hong Kong, Google has essentially ceased all operations on the Mainland; any uncensored results are filtered by the "Golden Shield Project" also known as the Great Firewall of China.
Whether or not this back and forth is a sustainable strategy for both parties is unclear, however, what is clear is that that both Washington and Beijing are jumping at the chance to go tit-for-tat with each other.
[1]http://www.washingtonpost.com/wp-dyn/content/article/2010/03/14/AR2010031402304.html
--Stephen Balaban
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