Provoking China: Selling F-16 to Taiwan or The Currency Bill?

Static Chaos's picture

 By Static Choas

Monday, Oct. 10 marks the 100th anniversary of the Xinhai Revolution that ended the Qing Dynasty as well as 2,000 years of Imperial China.  Sparks have always been flying in the Taiwan Strait between Taiwan and China with the latest being the F-16 fighter planes Taiwan wanted to buy from the U.S.


From an op-ed piece by Bloomberg editors:

"The U.S. is obligated by a 1979 law to supply weapons to Taiwan, whose government broke from mainland China in 1949 after the Communist Party came to power.  Taiwan had wanted the U.S. to sell it 66 newer versions of the aircraft, and leaders of both parties in Congress pressured the administration to do so. China objects to any arms sale to Taiwan."

".....selling new planes to Taiwan might have needlessly provoked China, a vital U.S. trade partner." 

".....The last thing needed is outside provocation. So we applaud the Obama administration’s compromise decision last month to go ahead with a $5.85 billion deal to upgrade Taiwan’s existing fleet of F-16 fighter jets."

While I also admired the diplomatic maneuver by the White House, at the same time, I could not help but find this self-contradictory in the context of the Currency Exchange Rate Oversight Reform Act (aka China Currency Bill) just being passed at the U.S. Senate, which, by the way, curiously was not mentioned or referenced in the Bloomberg article.  .


Does the U.S. think China will not get totally "needlessly provoked" by the Currency Bill?  Think again!


From Global Times:

"China's Vice Foreign Minister Cui Tiankai warned that ...."Should the proposed legislation become law, the only result would be a trade war between China and the U.S. and that would be a lose-lose situation for both sides."

From Xinhua (Chinese government's unofficial mouthpiece)

"To put it simply, current anti-yuan moves in the U.S. Senate are more like a publicity attempt to attract voters and distract attention from the real problems facing the U.S. economy."

The Bloomberg article went on to cite a study commissioned by Lockheed Martin Corp. (LMT),  who manufactures the F-16, that

"...[Selling Taiwan new planes] would have been worth $8.7 billion and created about 16,000 jobs at a time when the U.S desperately needs to reduce unemployment.  The assembly line might close now that the sale is off the table."

So let me get this straight...


On the one hand, for the sake of not to "needlessly provoke" China, the U.S. is willing to not only scrap a multi-billion-dollar revenue and jobs creating commercial deal, but also skirted its own law, and broke its commitment to an ally who fought side by side with the U.S. in WWII.


On the other hand, the U.S. has no problem slapping the Currency Bill in China's face without any regards to the potential economic and geopolitical impact.


The U.S. government obviously has decided to pick its battle based on American politics.  Last time I checked, when the U.S. passed the Smoot–Hawley Tariff Act in 1930, it acted only to deepen and prolong the Great Depression.


Static Choas, Oct. 11, 2011

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Caravaggio's picture

Oh, yesss, the chinese will be certainly dead scared by the flying rusty irons over Taiwan...
BTW, buffaloo boys, in case you cannot afford buying chinese goods, just don't buy it. Since you cannot afford buying european goods too, then buy what's available - american. What's left, I mean...

Bartanist's picture

People need to start thinking a little more broadly and long term.

Why did slick Willy give China stealth and other military technology? The answer could be: If you are going to perpetrate a massive kill-off of population through a contrived war that all of the people are clammoring for ... and at the same time hopefully keep your hands "clean" so that you can retain power, you need to have an enemy that is a credible threat.

Back in the year 2000 I was told a rumor (and I forget who it came from, just at a meeting I attended) that the mlitary types in our corporation were discussing that there would be war with China in 2012. Just a rumor and 11 years ago. A lot may have changed since then ... timing tends to be fluid in the douche-bag (errr, I mean "master of the world") community.

No one likes or wants wars except those who benefit from them. Over the long, long, long term who would benefit from WWIII and mass population die-off?

GinnyMS's picture

More unneeded turmoil. Replace their worn out planes and drop the currency war. Last thing anybody needs at this time. US Congress and Obama staff should go on vacation and stay there for the next six months. All concerned are nuts.

NotApplicable's picture

What do you mean, unneeded? Those politicos in DC and everywhere else most certainly need these distractions to create "mandates" and legitimize their rule.

Other than wealth transfer to the elite, it's the only reason they exist.

Oh, wait... you mean turmoil that we don't need. Sorry, but as long as their are votes to be had, turmoil is all you're going to get.

thunderchief's picture

Hey dumb fucks....

Taiwanese are Chinese.  Manderin Mainland Speaking Chinese..

They are not indiginous Taiwanese.  If that makes any sense.

Chiang Kai Shek rounded up all the locals and sent them to the other side of the island.  At least the ones he did not kill.


Chinese Mainlanders...Yes

Something else...No

Do you numbnutoo American's know that Taiwanese Former F-16 pilots now work for Mainland China Civilian Airlines.  They do, and so does their intel.

Hey fuckwads...wrap your heads around this...Anything you give to Taiwan you are giving full stock and barrel to Beijing. 

So enjoy your knew toys China... I hope they gave you the upgraded Honeywell package.  To put in your 5th generation fighters.

Another shitstorm scandle we should put more of these 1 percentile  fuck brain matter morons in the USA in Jail for.

NotApplicable's picture

After reading this post, my day is now complete.

Good jorb!

Stuck on Zero's picture

Sorry dude.  Know your history.  Taiwan was originally settled by Austronesians and polynesians.  Lots of wars and conquering has resulted in takeovers by Japan, China and last by the Chiang Kai Shek government in exile. 

Mugatu's picture

Take a happy pill dude!  I think the average America is quite aware that Chiang kai Shek took his little band of followers to Formosaville to have a little party after Mao took over.

BTW - they already have the design on the F-16 radar system which they got courtesy of Pakistan.  Why don't you get your shit together before you spout out.


Mugatu's picture

I thought Taiwan made the F-16 - or maybe it is China?  We don't really make anything here in the U.S. to sell.  We only sell credit products like CDS's and service industry's like McDonalds. 

Even I have moved manufacturing of my Piano key necktie to the Far East!


apberusdisvet's picture

 If the banking cartel can make money off it, it will be done by the politicians.  I wonder what the spread is on Chinese default swaps?

Oh regional Indian's picture

nice how there are all these hot-button "issues" the world over, so convenient.

Palestine, Taiwan, Tibet, Okinawa, puerto Rico, NK, Falklands, Cuba......

Any one can be used as a trigger/distraction, as needed.

Nice, albeit ugly, plan.


The Perversion of Language

Foul Ole Ron's picture

What the article is ignoring is that the Currency Bill won't pass and China isn't really provoked as a result. The U.S. knows it, China knows it, the whole world knows it. China knows it's just some senators indulging in some political theatre to play with the voters. Sure they'll throw out the hard lines in public themselves but behind the scenes both sides know nothing has changed.

The Taiwan F-16 deal would most certainly have provoked China. The White House has too much other stuff on their plate at the moment so decided to take a pass at poking the Panda for the moment - hey what's the chances of China actually invading Taiwan in the next year or two? That's right... pretty much zero. After re-election if Obama is still in and if the economy is picking up again they'll take another pass at this maybe. If Obama is out some Republican president will almost certainly take a go at selling those F16s. Either way it's easier to stir this up later rather than now.

no2foreclosures's picture

Good article.

Points out the naiveté or schizophrenic nature of the navel-gazing U.S. Congress when it comes to realpolitik games.

Dangertime's picture

Well China is manipulating their currency to the detriment of the US.

Mountainview's picture

And the USD-CNY rate is at the core of the job crisis!

Quintus's picture

Yeah - they should stop influencing the exchange rate by buying all those USTreasuries IMMEDIATELY!  In fact, Timmy should refuse to sell them any debt at all.  That'll show them!

What could possibly go wrong?

Dangertime's picture

Besides losing the last pieces of our manufacturing base to a country that is becoming increasingly aggressive to US interests?


I don't know, what could possibly go wrong if we allow that???


End the damn currency peg.

Quintus's picture

It's far too late for that sort of thinking.  It would take decades to repatriate any meaningful amount of industry from China, even if such a thing were possible.  Even then, the end result of this would be 'Made in America' goods that cost much, much more given the higher labor, legal, environmental and taxation costs.  Maybe consumers would be happy to pay the higher prices to provide more jobs for others.  Maybe not.

It's a moot point anyway, since without the China bid under Treasuries, and with multi-trillion dollar deficits to finance for decades to come, the US would grind to a halt long before these wonderful new factories in the homeland (Who's going to pay for them, by the way?) could be built.  

No, the only way out is a total collapse and rebuilding of the global financial system followed by a race to see who can rebuild quickest and achieve dominance.

Mountainview's picture

Before coming back to the Us they go first to India-Brazil and Mexico (in this order) !!!

Dangertime's picture

It is not too late.

The right comparison to make is comparing the time it takes China's rising military to reach a level of power equal to the US Military, versus the time it takes to return manufacturing to the US.


Atlas Shrugged's picture

The US is the biggest (reserve) currency manipulator of all time.

Dangertime's picture

No disagreement here on that subject.

Quintus's picture

Goodness me.

Next you'll be telling us that the US political system is dysfunctional, hopelessly conflicted and does not act in the interest of the country as a whole, being more concerned with political point-scoring and serving their campaign contributing paymasters.

Perish the thought.

covert's picture

contradictions? time to think it over.


zhandax's picture

Gee, you think?  Nothing that can't be fixed with a few million pissed off citizens and a half-mile of rope.

Stuck on Zero's picture

Lets review your calculation: (535 in Congress + 20 in Whitehouse + 9 Supreme Court + 1000 in Wall Street) x 50 ft rope each ~ 75000 feet of rope.  To get by with a half mile of rope will require reusing the nooses 30 times. 

NotApplicable's picture

With good quality rope, it's doable. Just have to presort them by weight.