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China's economic muscle

What's amazing about traveling halfway around the world in the year 2007 is that remarkably nothing has to change your focus unless you let it. Less than 48 hours ago I was sitting behind a desk in New York much like I am sitting behind a desk in Beijing now. That's the trouble with the modern world: You can narrow it down to fit your life anywhere at anytime. If I wanted I could drink my Starbucks, get some BBQ at Tim's and watch Pretty Woman on DVD just three miles from -- not Times Square, but Tiananmen.

There are wide gulfs though when you let a place soak in. The newspapers here are filled with talk of trade - namely the Strategic Economic Dialogue between the U.S. and China that just ended in Washington, D.C. Secretary of the Treasury Henry Paulson is on the front page above the fold hugging his Chinese counterpart Vice Premier Wu Yi. China has a trade surplus of more than $200 billion with the U.S. They export vast quantities of goods and import not nearly as much as the U.S. would like. They now have money to burn and the U.S. hopes it's used productively. Some have argued the U.S. should have that money to burn... they are the global superpower, right? But instead the U.S. is trying to dictate the terms of a situation that is largely beyond its control. It brings to mind Julia Roberts' meltdown in Pretty Woman when she tearfully insists to Richard Gere, "I say who; I say when; I-- I say who--"

But it's not really up to Julia or to the U.S. anymore. China's economic growth is intense and showing no signs of slowing. And partly because they won't float their currency on the market, the U.S. Congress has ample excuse to throw a tantrum about the Chinese boom. Some fault the undervalued Chinese currency (the yuan) as the sole reason the Chinese can keep their imports to the U.S. cheap -- translating  to American job losses. Congress is weighing tariffs on Chinese goods because of it. So while the talks continued this week (the first ones were in Beijing last December), it gives the public and analysts on both sides time to evaluate the relationship.

The must-reads out there on this issue: BBC has a few snippets translated from Chinese papers and Business Week has an overview of the blog chatter. It's clear the U.S. is not the only game in town. Not when China has $1.2 trillion in foreign exchange reserves. But Paulson announced this week that China is committed to doing $4.3 billion in deals with the U.S. Money talks, right?

Store clerk: Just how obscene an amount of cash are we talking about here? Profane or really offensive?
Richard Gere: Really offensive.
Store clerk to Julia Roberts: I like him so much.

Editor's note: NBC's Adrienne Mong is with Marisa on this trip to Beijing and posted in World Blog about the threat of counterfeiters to the Chinese and U.S. economies.

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