Struggle between US and China becomes overt

The struggle for power between the US and China will be “the defining geopolitical drama” of this century.

It took a step forward this week as the US voted on legislation to introduce tariffs on China in return for its failure to allow its currency to appreciate.

Much of south east Asia has long standing military relationships with the US, but newly-strong trade relationships with China.

With the US government borrowing 40 cents of every dollar that it spends, and China being the largest foreign buyer of US debt, the Chinese are indirectly funding American military dominance of the Pacific. What would happen if China stopped buying that debt? Maybe this is why the dollar is strengthening as gold falls.

This article contains more discussion on what has happened so far, and how it may pan out.

http://www.ft.com/cms/s/0/7885de20-edab-11e0-a9a9-00144feab49a.html

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