China and the U.S. started an economic dialogue between its top officials in 2006, during the Bush administration. Obama made it even more important by adding the political element in 2009. This points to an outcome that quite frankly looks unlikely: an economic breakthrough agreement that will change the relationship between the USA and China.

It looks unlikely because at the dialogue that just took place we have Secretary of State Hillary Clinton finally pointing to China's abuse of its citizens human rights. Up until now the Obama administration has been tight-lipped about this, even as the abuses mounted. And the economic deals made at this dialogue, though welcome, were hardly transformational. China continues to resist raising the valuation of the yuan and the U.S. continues to insist that this is hurting our economy.

In other words, what the template suggests will occur--a breakthrough economic agreement--looks less and less likely to occur. Is the template off on this point? It is certainly possible. Even in my book I assert that I cannot imagine being always right in what amounts to forecasts of chaos (the quadrillion-variable flow of history). But time will tell. I still believe we will be surprised on both the economic front, resolution of the Taiwan issue, a move toward democracy by China and a reining in of the People's Liberation Army.

Until then,

Grace and peace,

Tom
 


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