There have been varying estimates about the economy over the past six months. Is the recession over? Are we recovering? As the questions await answers, policy makers are already pointing their fingers at a likely culprit. The men in black are trying to drag this goat through the mud to the slaughter house. China is the sacrifice of choice.

 With all the flak about the economic problems, many in the Administration are advocating a tougher stance on China’s economic approach to the new world. A deliberate devaluation against the dollar keeps the ratio of seven Yuan’s to a single George Washington.  This makes Chinese products and outsourcing a cheaper option for millions of Americans. It also hides under its folds an ugly truth – no one in the USA is ready for expensive American made products.

Quite simply, nationalism takes the back seat when the wallets are pressed too tightly. No wonder China holds the largest American debt, buying into bonds worth $877.5 billion; supplying everything from clothes to closets, milk to toys, and electronics to mechanics. Honestly, as Americans, we are all hooked on to China.

There are those who demand that more Americans are losing their jobs because China is stealing business, and for all intents and purposes China is making safe its position. The fact is we have become too addicted – addicted to not working as hard, not willing to fork out the extra bucks for something American. Nor do we really care about the human rights of workers as long as the products at Wal-Mart and Target stay cheap and good.

At the recent nuclear summit, the Chinese President, Hu Jintao said in as many words that issues of sovereignty will not be influenced by outside pressure. The pressure, apparently, was also diverted by giving into one of Washington’s demands, a push for sanctions on Iran.  However, a quick look at the news archives show that Obama has been dealing with China over a range of issues and spats have broken out in the past. Disagreement at the Copenhagen climate change summit, strong exchange of words over Tibet and a long standing difference of opinion over Iran. This also added to the problems US companies who were being given a hard time within China, recent example the cat and mouse play between Google and China.

China, seems to have a strangle hold on the US. This leg over the US economy puts China at a vantage wherefrom it can definitely command to have affects on American foreign policy in matters that specifically concern China and Taiwan. While previous US Administrations have been critical of China’s claim over Taiwan, in recent years the rise of a global economic hold that China has, breathes confidence into their stance over the small nation. This is also the reason why the pressure on China to better its working conditions is dampened. No wonder that the view in Beijing about the US is one of looking down. With the cuts in the space program, the US will have to turn to China for continuing missions. And space exploration.

Stephen Roach, Chairman of Morgan Stanley Asia says "Unless workers around the United States are willing to save more and put pressure on the government to save more, there's really no way around these trade deficits, and politicians who promise workers that things are going to get better if they just get tough on China are not being straight with American workers," he said.

A report due April 15 before Congress was delayed by the Administration. In this report, Beijing was going to be labeled as a currency manipulator, a designation that could lead to a World Trade Organization complaint and possible trade sanctions. Treasury Secretary Timothy F. Geithner said that the matter would now be raised during the G20, later this year where the platform for different countries would help gather more voices against China.

Unless, as a nation we learn to wean off cheap products and face the music of inflation, then and only then would the US be able to tackle all issues China – smiling country which we saw grow into a superpower right under our
noses, and from our money.