And So It Begins...

The breaking news today is that China is telling Obama not to meet with the Dalai Lama.

They are making thinly veiled threats about economic warfare.

To his credit, President Obama held firmly that he absolutely intends to meet with the Dalai Lama.

Keep in mind that the US recently made a deal to sell Taiwan $6.4Billion worth of weapons.

I think this will go much further.

During the Clinton presidency I distinctly remember seeing the First Family sitting in a box in Tiananmen Square watching a military parade and thinking to myself that not even a decade had passed since the massacre and how ashamed I felt for us to sell out the protesters.

Not long after that I distinctly remember freaking out about Chinese war-games off the coast of Taiwan while everyone else worried about where Monica kept her cigars.  The one event emboldened China to make the other happen.

Back then everything we bought in terms of electronics was made in Taiwan.  In 15 years a lot has changed. Now everything we buy is made in China.  They have been engaging in economic warfare against Taiwan for the entire time.  China claims Taiwan as it's own 'rogue province'.  There is the ever-present threat that they will at some point attempt annexation.

Our own engagement with China during this time has fueled their economic growth and at the same time given rise to Walmart and every other distributor of cheaply manufactured goods.  The lure of extremely cheap manufacturing is an addictive force that no large business can apparently resist.

What happens if the kinder & gentler China suddenly "pulls the plug" and goes into a hard-line mode?  What if they turn their backs on intellectual property law and instead take all of the designs to the world's most popular gadgets that they have sitting in their factories right now - and take the ball & run with it?  What if they put up every piece of software ever written on the internet for free?  What if they cashed in all of the treasury bonds that they currently hold all at once?  What if they outright invaded Taiwan?  How many different ways can they dramatically threaten US interests?

This marks the beginning of a newer and more aggressive phase in Chinese politics.  China telling a US President whom he may and may not meet with is audacious at best and outright threatening at worst.  That they are willing to make such a move is at the very least a test of resolve.