Bad debts: Assessing China's financial influence in great power politics

International Security

Volumn 34, Issue 2, 2009, Pages 7-45

  Drezner, Daniel W ^a  

^a TUFTS UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 77249093383     PISSN: 01622889     EISSN: 15314804     Source Type: Journal    
DOI: 10.1162/isec.2009.34.2.7     Document Type: Article

References (303)

1. "Naked Aggression," Economist, March 12, 2009.
2. Quoted in Michael Wines, Keith Bradsher, and Mark Landler, "China's Leader Says He Is 'Worried' over U.S. Treasuries," New York Times, March 14, 2009.
3. Zhou Xiaochuan, "Reform the International Monetary System," People's Bank of China, March 23, 2009, http://www.pbc.gov.cn/english//detail.asp?col?6500&ID?178.
4. Philip Bowring, "China Tests the Waters," New York Times, June 17, 2009.
5. Bruce Stokes, "Dousing the Dragon Fire," National Journal, May 9, 2009, pp. 40-43.
6. Peter Hartcher, "China Flexes, and the U.S. Catches a Chilly Reminder," Sydney Morning Herald, March 17, 2009.
7. Azar Gat, "The Return of Authoritarian Great Powers," Foreign Affairs, Vol. 86, No. 4 (July/August 2007), pp. 59-69.
8. National Intelligence Council, Global Trends 2025: A TransformedWorld (Washington, D.C.: U.S. Government Printing Office, 2008), pp. 7-14.
9. Brad Setser and Arpana Pandey, "China's $1.5 Trillion Bet: Understanding China's External Portfolio," Working Paper (New York: Center for Geoeconomic Studies, Council on Foreign Relations, May 2009).
10. Quoted in Eamon Javers, "Four Really, Really Bad Scenarios," Politico, December 17, 2008, http://www.politico.com/news/stories/1208/16663.html.
11. Quoted in James Fallows, "'Be Nice to the Countries That Lend You Money,'" Atlantic, December 2008, p. 65.
12. See, for example, Keith Bradsher, "U.S. Debt Is Losing Its Appeal in China," International Herald Tribune, January 8, 2009.
13. Michael Mackenzie, "Foreign Investors Slash U.S. Holdings," Financial Times, March 17, 2009.
14. Keith Bradsher, "China Slows Purchases of U.S. and Other Bonds," New York Times, April 13, 2009.
15. Keith Bradsher, "China Grows More Picky about Debt," New York Times, May 21, 2009.
16. Brad W. Setser, Sovereign Wealth and Sovereign Power: The Strategic Consequences of American Indebtedness (New York: Council on Foreign Relations Press, 2008), pp. 3-4.
17. National Intelligence Council, Global Trends 2025, pp. 7-14
18. Frederick Kempe, "Why Economists Worry about Who Holds Foreign Currency Reserves," Wall Street Journal, May 9, 2006
19. Heidi Crebo-Rediker and Douglas Rediker, "Capital Warfare," Wall Street Journal, March 28, 2007
20. Parag Khanna, The Second World: Empires and Influence in the New Global Order (New York: Random House, 2008)
21. James Fallows, "The $1.4 Trillion Question," Atlantic, January/February 2008, pp. 36-48
22. Flynt Leverett, "Black Is the New Green," National Interest, No. 93 (January/February 2008), pp. 37-45
23. Joshua Kurlantzick, "A Fistful of Dinars," Democracy, No. 8 (Spring 2008), pp. 59-71
24. Gal Luft, "Selling Out: Sovereign Wealth Funds and Economic Security," American Interest, Vol. 3, No. 6 (July/August 2008), pp. 53-56
25. Setser, Sovereign Wealth and Sovereign Power
26. John B. Judis, "Debt Man Walking," New Republic, December 3, 2008, pp. 19-21
27. Michael Mastanduno, "System Taker and Privilege Taker: U.S. Power and the International Political Economy," World Politics, Vol. 61, No. 1 (January 2009), pp. 121-154
28. Mathew J. Burrows and Jennifer Harris, "Revisiting the Future: Geopolitical Effects of the Financial Crisis," Washington Quarterly, Vol. 32, No. 2 (April 2009), pp. 27-38
29. Nouriel Roubini, "The Almighty Renminbi?" New York Times, May 14, 2009
30. David Leonhardt, "The China Puzzle," New York Times Magazine, May 17, 2009
31. Setser, Sovereign Wealth and Sovereign Power, p. 17.
32. Beyond security studies, recent work includes David M. Andrews, ed., International Monetary Power (Ithaca, N.Y.: Cornell University Press, 2005)
33. Helen Thompson, "Debt and Power: The United States' Debt in Historical Perspective," International Relations, Vol. 21, No. 3 (September 2007), pp. 305-323
34. Gregory Chin and Eric Helleiner, "China as a Creditor: A Rising Financial Power?" Journal of International Affairs, Vol. 62, No. 1 (Fall/Winter 2008), pp. 87-102
35. Herman Schwartz, Subprime Nation: American Power, Global Capital, and the Housing Bubble (Ithaca, N.Y.: Cornell University Press, 2009).
36. Benjamin J. Cohen, "The International Monetary System: Diffusion and Ambiguity," International Affairs, Vol. 84, No. 3 (May 2008), pp. 455-470.
37. David M. Andrews, "Monetary Power and Monetary Statecraft," in Andrews, International Monetary Power, p. 9.
38. Robert B. Strassler, ed., The Landmark Thucydides: A Comprehensive Guide to the Peloponnesian War (New York: Simon and Schuster, 1996), p. 7.
39. Niccolò Machiavelli, The Prince, chap. 10
40. Immanuel Kant, "Perpetual Peace: A Philosophical Sketch," in Hans Siegbert Reiss and Hugh Barr Nisbet, eds., Kant: Political Writings (Cambridge: Cambridge University Press, 1991), p. 95.
41. V.I. Lenin, Imperialism: The Highest Stage of Capitalism (New York: International Publishers, 1990), chaps. 2-4.
42. John Maynard Keynes, The Economic Consequences of the Peace (New York: Harcourt, Brace, and Howe, 1920), p. 279.
43. Albert Hirschman, National Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1945), p. 16.
44. Eric Helleiner, "Money and Influence: Japanese Power in the International Monetary and Financial System," Millennium: Journal of International Relations, Vol. 18, No. 3 (Fall 1989), pp. 343-358.
45. Robert Gilpin, The Political Economy of International Relations (Princeton, N.J.: Princeton University Press, 1987), pp. 328-340.
46. On BrettonWoods II, see Michael P. Dooley, David Folkerts-Landau, and Peter Garber, "An Essay on the Revived Bretton Woods System," NBER Working Paper, No. 9971 (Cambridge, Mass.: National Bureau of Economic Research, September 2003).
47. Benjamin Bernanke, "The Global Saving Glut and the U.S. Current Account Deficit," Sandridge Lecture, Virginia Association of Economics, Richmond, Virginia, March 10, 2005.
48. Barry Eichengreen, Globalizing Capital: A History of the International Monetary System, 2d ed. (Princeton, N.J.: Princeton University Press, 2008), pp. 210-218.
49. There are other reasons for foreign accumulation of U.S. assets, which we address in the conclusion. See Joshua Aizenman and Jaewoo Lee, "Financial versus Monetary Mercantilism: Longrun View of Large International Reserves Hoarding," World Economy, Vol. 31, No. 5 (May 2008), pp. 593-611.
50. Niall Ferguson and Moritz Schularick, "'Chimerica' and the Global Asset Market Boom," International Finance, Vol. 10, No. 3 (Winter 2007), pp. 215-239.
51. Nicholas R. Lardy, "China: Towards a Consumption-Driven Growth Path," Policy Brief, No. PB06-6 (Washington, D.C.: Institute for International Economics, October 2006).
52. Barry Eichengreen, Charles Wyplosz, and Yung Chul Park, eds., China, Asia, and the New World Economy (New York: Oxford University Press, 2008), chaps. 10, 11, 14.
53. Stephen Roach, "AWake-Up Call for the U.S. and China: Stress Testing a Symbiotic Relationship," testimony before the U.S.-China Economic and Security Review Commission, 111th Cong., 1st sess., February 17, 2009.
54. Steven Dunaway, "Global Imbalances and the Financial Crisis," Special Report, No. 44 (New York: Council on Foreign Relations Press, March 2009), pp. 15-16.
55. Setser, Sovereign Wealth and Sovereign Power, p. 13.
56. Helleiner, "Money and Influence."
57. Setser and Pandey, "China's $1.5 Trillion Bet," p. 1.
58. Other data in this paragraph come from Indira A.R. Lakshmanan, "Clinton Urges China to Keep Buying U.S. Treasury Securities," Bloomberg, February 22, 2009.
59. For further exploration of these concepts, see Thomas C. Schelling, The Strategy of Conflict (Cambridge, Mass.: Harvard University Press, 1960).
60. Thomas C. Schelling, The Strategy of Conflict (Cambridge, Mass.: Harvard University Press, 1960).
61. Thomas C. Schelling, Arms and Influence (New Haven, Conn.: Yale University Press, 1967).
62. Quoted in Jamil Anderlini, "China Fund to Shun Tobacco, Guns, and Gambling," Financial Times, June 13, 2008.
63. Setser, Sovereign Wealth and Sovereign Power.
64. Daniel W. Drezner, "The Hidden Hand of Economic Coercion," International Organization, Vol. 57, No. 3 (Summer 2003), pp. 643-659.
65. Andy Mukherjee, "Sovereign Wealth Funds a Boon for Asset Managers," Bloomberg, October 23, 2007.
66. Chris Larson, "Managers Eye Asian SWF Billions," Financial Times, August 3, 2008.
67. Quoted in David M. Dickson, "China's Economic 'Bargaining Chip,'" Washington Times, July 27, 2008.
68. Mike McConnell, testimony before the Senate Select Committee on Intelligence, 110th Cong., 2d sess., February 5, 2008.
69. U.S.-China Economic and Security Review Commission 2008 Report to Congress, November 2008, p. 43.
70. http://www.uscc.gov/annual_report/2008/annual_report_full_08.pdf. See also National Intelligence Council, Global Trends 2025, pp. 7-14.
71. Congress created the U.S.-China Commission in 2000 to report on the national security implications of the economic relationship between the United States and China.
72. Dickson, "China's Economic 'Bargaining Chip'".
73. Ambrose Evans-Pritchard, "China Threatens 'Nuclear Option' of Dollar Sales," London Daily Telegraph, August 10, 2007
74. "A Time for Muscle-flexing," Economist, March 19, 2009.
75. National Intelligence Council, Global Trends 2025, pp. 7-14.
76. Rediker and Rediker, "CapitalWarfare".
77. Fallows, "The $1.4 Trillion Question".
78. Leverett, "Black Is the New Green".
79. Kurlantzick, "A Fistful of Dinars".
80. Luft, "Selling Out".
81. Setser, Sovereign Wealth and Sovereign Power.
82. Judis, "Debt Man Walking".
83. Mastanduno, "System Taker and Privilege Taker".
84. Burrows and Harris, "Revisiting the Future".
85. Roubini, "The Almighty Renminbi?"
86. Leonhardt, "The China Puzzle."
87. Roach, "A Wake-Up Call for the U.S. and China," p. 7
88. Setser, Sovereign Wealth and Sovereign Power, p. 24
89. Thompson, "Debt and Power," p. 314.
90. James Conklin, "The Theory of Sovereign Debt and Spain under Philip II," Journal of Political Economy, Vol. 106, No. 3 (June 1998), pp. 483-513.
91. Charles Lipson, Standing Guard: Protecting Foreign Capital in the Nineteenth and Twentieth Centuries (Berkeley: University of California Press, 1985).
92. Kris James Mitchener and Marc D. Weidenmier, "Supersanctions and Sovereign Debt Repayment," NBER Working Paper, No. 11472 (Cambridge, Mass.: National Bureau of Economic Research, June 2005).
93. Michael Tomz, Reputation and International Cooperation: Sovereign Debt across Three Centuries (Princeton, N.J.: Princeton University Press, 2007).
94. Hirschman, National Power and the Structure of Foreign Trade.
95. Diane B. Kunz, The Economic Diplomacy of the Suez Crisis (Chapel Hill: University of North Carolina Press, 1991).
96. Jonathan Kirshner, Currency and Coercion: The Political Economy of International Monetary Power (Princeton, N.J.: Princeton University Press, 1995), pp. 63-82.
97. Gary Clyde Hufbauer, Jeffrey J. Schott, and Barbara Oegg, "Using Sanctions to Fight Terrorism," Policy Brief, No. 01-11 (Washington, D.C.: Peterson Institute for International Economics, November 2001).
98. Sue E. Eckert, "The Use of Financial Measures to Promote Security," Journal of International Affairs, Vol. 62, No. 1 (Fall/Winter 2008), pp. 103-111.
99. Jamil Anderlini, "Beijing Uses Forex Reserves to Target Taiwan," Financial Times, September 11, 2008.
100. See, for example, Chin and Helleiner, "China as a Creditor".
101. Jonathan Kirshner, "Dollar Primacy and American Power," Review of International Political Economy, Vol. 15, No. 3 (August 2008), pp. 418-438.
102. Schwartz, Subprime Nation
103. Kenneth Rogoff, "Foreign Holdings of U.S. Debt: Is Our Economy Vulnerable?" testimony before the U.S. House of Representatives Committee on the Budget, 110th Cong., 1st sess., June 26, 2007, p. 9.
104. Ngaire Woods, "Whose Aid? Whose Influence? China, Emerging Donors, and the Silent Revolution in Development Assistance," International Affairs, Vol. 84, No. 6 (November 2008), pp. 1205-1221.
105. Gregory Chin, "China's Creditor Power and the World Bank: Reshaping Multilateral Institutions," in Alan Alexandroff and Andrew F. Cooper, eds., Can the World Be Governed? Rising States, Rising Institutions (Washington, D.C.: Brookings Institution Press, forthcoming).
106. Lisa L. Martin, Coercive Cooperation: Explaining Multilateral Economic Sanctions (Princeton, N.J.: Princeton University Press, 1992).
107. Daniel W. Drezner, "Bargaining, Enforcement, and Multilateral Economic Sanctions," International Organization, Vol. 54, No. 1 (Winter 2000), pp. 73-102.
108. This is distinct from the claim that complex interdependence acts as a systemic constraint to prevent the emergence of crises
109. David M. Rowe, "World Economic Expansion and National Security in Pre-World War I Europe," International Organization, Vol. 53, No. 2 (Spring 1999), pp. 195-231.
110. Edward S. Miller, Bankrupting the Enemy: The U.S. Financial Siege of Japan before Pearl Harbor (Washington, D.C.: Naval Institute Press, 2007).
111. Daniel W. Drezner, The Sanctions Paradox: Economic Statecraft and International Relations (Cambridge: Cambridge University Press, 1999).
112. Kirshner, Currency and Coercion
113. Gregory Chin and Eric Helleiner, "Calling China's Bluff," Foreignpolicy.com, January 2009, http://www.foreignpolicy.com/story/cms.php?story_id?4646.
114. Schwartz, Subprime Nation, chap. 6.
115. Christopher Layne, "China's Challenge to U.S. Hegemony," Current History, January 2008, pp. 13-18
116. Elizabeth Economy and Adam Segal, "The G-2 Mirage," Foreign Affairs, Vol. 88, No. 2 (May/June 2009), pp. 14-23.
117. For a dissenting view, see G. John Ikenberry, "The Rise of China and the Future of the West," Foreign Affairs, Vol. 87, No. 1 (January/February 2008), pp. 23-37.
118. Jeffrey A. Frankel, "New Estimation of China's Exchange Rate Regime," Pacific Economic Review, Vol. 14, No. 3 (August 2009), pp. 346-360.
119. Paul Bowles and Baotai Wang, "The Rocky Road Ahead: China, the U.S., and the Future of the Dollar," Review of International Political Economy, Vol. 15, No. 3 (August 2008), pp. 335-353, especially pp. 348-350
120. Dunaway, "Global Imbalances and the Financial Crisis," pp. 10-12.
121. For other cases, financial statecraft was not the causal mechanism through which the sender influenced the target. In most cases of debt collections in the nineteenth century, for example, financial dependence was the excuse for exercising influence, not the causal mechanism through which creditors altered the policies of debtors. The British Navy, rather than British financial power, caused a change in the target policies. On this point, see Robert A. Pape, "Why Economic Sanctions Do Not Work," International Security, Vol. 22, No. 2 (Fall 1997), pp. 90-136.
122. Benn Steil and Robert E. Litan, Financial Statecraft: The Role of Financial Markets in American Foreign Policy (New Haven, Conn.: Yale University Press, 2006), p. 77.
123. Kirshner, Currency and Coercion, p. 175.
124. Andrews, "Monetary Power and Monetary Statecraft," p. 25.
125. A. Cooper Drury, "Revisiting Economic Sanctions Reconsidered," Journal of Peace Research, Vol. 35, No. 4 (July 1998), pp. 497-509
126. Drezner, The Sanctions Paradox, chap. 3
127. David Cortright and George A. Lopez, eds., Smart Sanctions: Targeting Economic Statecraft (New York: Rowman and Little field, 2002).
128. Rachel L. Loeffler, "Bank Shots: How the Financial System Can Isolate Rogues," Foreign Affairs, Vol. 88, No. 2 (March/April 2009), pp. 101-110
129. Eckert, "The Use of Financial Measures to Promote Security."
130. Setser, Sovereign Debt and Sovereign Power
131. The estimates in this paragraph come from Stephen Jen, "How Big Could Sovereign Wealth Funds Be by 2015?" in Currencies, Morgan Stanley Global Economic Forum, May 4, 2007
132. Steffen Kern, "Sovereign Wealth Funds-State Investments on the Rise," Deutsche Bank Research, September 10, 2007
133. Lyons, "State Capitalism"; Brad Setser and Rachel Ziemba, "Understanding the New Financial Superpower-The Management of GCC Official Foreign Assets," RGE Monitor, December 2007
134. Jan Randolph, "Sovereign Wealth Fund Tracker" (Lexington, Mass.: Global Insight, April 28, 2008).
135. Marko Maslakovic, "Sovereign Wealth Funds 2008" (London: International Financial Services, April 2008).
136. Edwin M. Truman, "Sovereign Wealth Funds: The Need for Greater Transparency and Accountability," Policy Brief, No. 07-6 (Washington, D.C.: Peterson Institute for International Economics, August 2007).
137. Jeffrey Garten, "We Need Rules for Sovereign Funds," Financial Times, August 8, 2008.
138. Doug Rediker and Heidi Crebo-Rediker, "Foreign Investment and Sovereign Wealth Funds," Working Paper, No. 1 (Washington, D.C.: Global Strategic Finance Initiative, New America Foundation, September 25, 2007).
139. Laura Badian and Gregory Harrington, "The Politics of Sovereign Wealth: Global Financial Markets Enter a New Era," International Economy, Vol. 22, No. 1 (Winter 2008), p. 53.
140. statement of G-7 Finance Ministers and Central Bank Governors, meeting of G-7/8 Finance Ministers, Washington, D.C., October 19, 2007, http://www.g8.utoronto.ca/finance/fm071019.htm.
141. See G-20 communiqué, meeting of Finance Ministers and Central Bank Governors, Kleinmond, South Africa, November 17-18, 2007, http://www.g8.utoronto.ca/g20/g20-071118.html.
142. Mohammed al-Jasser, quoted in Natsuko Waki and Clara Ferreira-Marques, "Wealth Funds Bristle at Rich Country Wariness," Reuters, January 24, 2008
143. Kristin Halvorsen, quoted in Daniel Gross, "SWF Seeks Loving American Man," Slate.com, January 24, 2008.
144. John Burton and Chris Giles, "IMF Urges Action on Sovereign Wealth," Financial Times, January 24, 2008
145. Steven Weisman, "Sovereign Wealth Funds Resist IMF Attempts to Draft Code of Conduct," International Herald Tribune, February 9, 2008
146. International Monetary Fund, "Sovereign Wealth Funds-A Work Agenda," February 29, 2008, http://www.imf.org/external/np/pp/eng/2008/022908.pdf.
147. Ibid., p. 26.
148. José Manuel Barroso, statement on sovereign wealth funds, Oslo, Norway, February 25, 2008, http://ec.europa.eu/commission_barroso/president/pdf/statement_20080225_02_en.pdf
149. Tony Barber, "Brussels Pushes Wealth Funds to Sign Code," Financial Times, February 27, 2008
150. Gillian Tett, "SWFs Face Growing U.S. Pressure," Financial Times, January 23, 2008.
151. Bob Davis, "Foreign Funds Agree to Set of Guiding Principles," Wall Street Journal, September 3, 2008.
152. For U.S. policy principles, see U.S. Department of the Treasury, "Treasury Reaches Agreement on Principles for SovereignWealth Fund Investment with Singapore and Abu Dhabi," March 20, 2008, http://treas.gov/press/releases/hp881.htm.
153. Edwin Truman, "A Blueprint for Sovereign Wealth Fund Best Practices," Policy Brief, No. PB08-3 (Washington, D.C.: Peterson Institute for International Economics, April 2008).
154. Peter Mandelson, "The Politics of Sovereign Wealth," Wall Street Journal, June 7, 2008
155. 60 Minutes, transcript, http://www.cbsnews.com/stories/2008/04/04/60minutes/main3993933.shtml
156. Anderlini, "China Fund to Shun Tobacco, Guns, and Gambling."
157. Bruce Stokes, "New Moves on Wealth Funds," National Journal, March 15, 2008, p. 54.
158. Organization for Economic Cooperation and Development Investment Committee, "Sovereign Wealth Funds and Recipient Country Policies" (Paris: OECD, April 4, 2008), p. 6.
159. U.S. Department of the Treasury, "Transcript of U.S. Delegation Press Conference at the Fourth Meeting of the U.S. China Strategic Economic Dialogue," June 18, 2008, http://www.treas.gov/press/releases/hp1048.htm.
160. See G-8 Information Centre, G-8 Summits, "Hokkaido Official Documents: World Economy," Hokkaido Tokyo Summit, July 8, 2008, http://www.g8.utoronto.ca/summit/2008hokkaido/2008-economy.html.
161. See International Working Group of Sovereign Wealth Funds, "Working Group Announces Creation of International Forum of Sovereign Wealth Funds," Press Release, No. 08/03, July 10, 2008, http://www.iwg-swf.org/pr/swfpr0803.htm.
162. John Jannarone, "Sovereign Wealth Group Aims to Improve Transparency," Dow Jones, July 10, 2008
163. Both quotes from "Press Conference Call: International Working Group of Sovereign Wealth Funds," Transcript, No. 08/01, September 2, 2008, http://www.iwg-swf.org/tr/swftr0801.htm.
164. See International Working Group of Sovereign Wealth Funds, "Generally Accepted Principles and Practices: 'Santiago Principles,'" October 2008, http://www.iwg-swf.org/pubs/eng/santiagoprinciples.pdf.
165. Davis, "Foreign Funds Agree to Set of Guiding Principles."
166. "ADIA Sovereign Fund Says to Adopt New Rules Quickly," Reuters, October 12, 2008
167. Deloitte Touche Tohmatsu, "Minding the GAPP: Sovereign Wealth, Transparency, and the 'Santiago Principles,'" October 2008
168. Steffen Kern, "SWFs and Foreign Investment Policies-An Update," Deutsche Bank Research, October 22, 2008
169. Oxford Analytica, "Perceptions GAPP," World NextWeek, October 17, 2008
170. Edwin M. Truman, "Making the World Safe for Sovereign Wealth Funds" (Washington, D.C.: Peterson Institute for International Economics, October 14, 2008), http://www.iie.com/realtime/?p?105.
171. Sven Behrendt, "When Money Talks: Arab SovereignWealth Funds in the Global Public Policy Discourse," Carnegie Paper, No. 12 (Washington, D.C.: Carnegie Endowment for International Peace, October 2008).
172. David W. Drezner, All Politics Is Global: Explaining International Regulatory Policies (Princeton, N.J.: Princeton University Press, 2007), chap. 3.
173. Quoted in Weisman, "Sovereign Wealth Funds Resist IMF Attempts to Draft Code of Conduct."
174. Nicholas Pettifer, "IMF Persists with Pointless SovereignWealth 'Code,'" International Financial Law Review, September 4, 2008
175. David M. Marchick and Matthew J. Slaughter, "Global FDI Policy: Correcting a Protectionist Drift," Council Special Report, No. 34 (New York: Council on Foreign Relations, June 2008).
176. Drezner, All Politics Is Global, chap. 5
177. Beth A. Simmons, "The International Politics of Harmonization: The Case of Capital Market Integration," International Organization, Vol. 55, No. 3 (Summer 2001), pp. 589-620.
178. Quoted in Peter Thal Larsen and Martin Dickson, "Singapore Fund Pledges Greater Transparency," Financial Times, January 27, 2008
179. Yousef al Otaiba, "Our Sovereign Wealth Plans," Wall Street Journal, March 19, 2008
180. Nadim Kawach, "SWFs Still Face Risk of Western Curbs," Emirates Business 24/7, August 1, 2008. The Inter-Arab Investment Guarantee Corporation issued the report.
181. Norton Rose LLP and Emerging Markets Private Equity Association, "Sovereign Wealth Funds the Global Private Equity Landscape Survey" (London: Norton Rose, June 2008), http://www.nortonrose.com/knowledge/publications/2008/pub15287.aspx?page?all&lang?engb.
182. Krishna Guha, "Sovereign Funds Back Code," Financial Times, September 3, 2008.
183. "Spain Wants Sovereign Wealth Funds to Help Cover Its Debt," Reuters, October 20, 2008.
184. United Nations Conference on Trade and Development, World Investment Report 2008: Transnational Corporations and the Infrastructure Challenge (New York: United Nations, 2008), p. 21.
185. Simon Johnson, "The Rise of Sovereign Wealth Funds," Finance and Development, Vol. 44, No. 3 (September 2007), pp. 56-57.
186. Takeshi Koyama and Stephen Golub, "OECD's FDI Regulatory Restrictiveness Index: Revision and Extension to More Economies," Working Papers on International Investment, No. 2006/4 (Paris: OECD, December 2006).
187. Rachel Ziemba, "Responses to Sovereign Wealth Funds: Are 'Draconian' Measures on the Way?" RGE Monitor, last updated November 1, 2007.
188. U.S. Government Accountability Office, "Foreign Investment: Laws and Policies Regulating Foreign Investment in 10 Countries," GAO-08-320 (Washington, D.C.: U.S. Government Accountability Office, February 28, 2008).
189. Stephen Jen and Spyros Andreopoulos, "SWFs: Growth Tempered," Morgan Stanley, November 10, 2008, http://www.morganstanley.com/views/gef/archive/2008/20081110-Mon.html#anchor50bccf8d-419f-11de-a1b3-c771ef8db296.
190. "Singapore Wealth Fund Loses Steam," BBC News, February 10, 2009
191. Robert Anderson, "Norway Reviews £75bn Loss in Wealth Fund," Financial Times, April 3, 2009
192. William Miracky and Bernardo Bortolotti, eds., Weathering the Storm: SovereignWealth Funds in the Global Economic Crisis of 2008 (Boston: Monitor Group, 2009), p. 17.
193. Setser, Sovereign Wealth and Sovereign Power, p. 18.
194. Data from U.S. Department of the Treasury, "Preliminary Report on Foreign Holdings of U.S. Securities at End-June 2007," February 29, 2008, http://www.ustreas.gov/press/releases/hp853.htm
195. U.S. Department of the Treasury, "Preliminary Report on Foreign Holdings of U.S. Securities at End-June 2008," February 27, 2009, http://www.treas.gov/tic/shlprelim.html.
196. See also Jamil Anderlini, "China Loses Billions on Equities Bets Ahead of Markets' Collapse," Financial Times, March 16, 2009
197. Victor C. Shih, Factions and Finance in China: Elite Conflict and Inflation (Cambridge: Cambridge University Press, 2008)
198. Michael H. Cognato, "China Investment Corporation: Threat or Opportunity?" NBR Analysis, Vol. 19, No. 1 (July 2008), pp. 9-36
199. Cheng Li, "China's Team of Rivals," Foreign Policy, No. 171 (March/April 2009), pp. 88-93.
200. Geoff Dyer, "Beijing Pushed for Economic Disclosure," Financial Times, March 2, 2009
201. Geoff Dyer, "China's Dollar Dilemma," Financial Times, February 22, 2009
202. Xin Wang, "China as a Net Creditor: An Indication of Strength or Weaknesses?" China and World Economy, Vol. 15, No. 6 (December 2007), pp. 22-36
203. Keith Brasher, "Main Bank of China Is in Need of Capital," New York Times, September 4, 2008
204. Dyer, "China's Dollar Dilemma."
205. One tangible result of this was that Lou Jiwei, head of the CIC, did worse than expected in subsequent Central Committee elections. See Heidi Crebo-Rediker and Douglas Rediker, "Watching Sovereign Wealth," Wall Street Journal, February 28, 2008
206. Cognato, "China Investment Corporation."
207. Roach, "A Wake-Up Call for the U.S. and China," p. 2.
208. Bruce Jones, Carlos Pascual, and Stephen J. Stedman, Power and Responsibility: Building International Order in an Era of Transnational Threats (Washington, D.C.: Brookings Institution Press, 2009), p. 237.
209. Roach, "A Wake-Up Call for the U.S. and China," p. 6.
210. Jason Dean, James T. Areddy, and Serena Ng, "Chinese Premier Blames Recession on U.S. Actions," Wall Street Journal, January 29, 2009
211. Jamil Anderlini, "China Forex Fund Finds Safety in Secrecy," Financial Times, March 15, 2009.
212. Heather Timmons, "Trouble at Fannie Mae and Freddie Mac Stirs Concern Abroad," New York Times, July 21, 2008.
213. Bradsher, "Main Bank of China Is in Need of Capital."
214. Dean, Areddy, and Ng, "Chinese Premier Blames Recession on U.S. Actions." Yu quoted in Kevin Hamlin, "Freddie, Fannie Failure Could Be World 'Catastrophe,'" Bloomberg, August 22, 2008.
215. Saskia Scholtes and James Politi, "Bank of China Flees Fannie-Freddie," Financial Times, August 28, 2008.
216. Charles Schumer, quoted in Deborah Solomon, Sudeep Reddy, and Susanne Craig, "Mounting Woes Left Officials with Little Room to Maneuver," Wall Street Journal, September 8, 2008.
217. Mark Zandi, "The Fannie-Freddie Takeover: A Latter-Day RTC," Moody's Economy.com, September 7, 2008, http://www.economy.com/dismal/article_free.asp?cid?108515&src?hp_economy.
218. David M. Dickson and David R. Sands, "Overseas Debt Drives Bailout of Fannie, Freddie," Washington Times, September 9, 2008.
219. Vikas Bajaj and Keith Bradsher, "Treasury's Move Relieves Worries of Overseas Investors," International Herald Tribune, September 7, 2008.
220. People's Bank of China, "PBC Spokesman Interviewed for the Takeover of the Fannie Mae and Freddie Mac by the U.S. Government," September 8, 2008, http://www.pbc.gov.cn/english//detail.asp?col?6400&ID?1147.
221. See Bethany McLean, "Fannie Mae's Last Stand," Vanity Fair, February 2009, pp. 118-147.
222. James R. Hagerty, Deborah Solomon, and Damian Paletta, "U.S. Mulls Future of Fannie, Freddie," Wall Street Journal, July 10, 2008.
223. Solomon, Reddy, and Craig, "Mounting Woes Left Officials with Little Room to Maneuver."
224. McLean, "Fannie Mae's Last Stand"
225. Hagerty, Solomon, and Paletta, "U.S. Mulls Future of Fannie, Freddie"
226. Solomon, Reddy, and Craig, "Mounting Woes Left Officials with Little Room to Maneuver"
227. Wes Goodman and Jody Shenn, "Fannie Mae Rescue Hindered as Asians Seek Guarantee," Bloomberg, February 20, 2009.
228. This includes conversations between President George W. Bush and Chinese President Hu Jintao. See Wayne M. Morrison, "China and the Global Financial Crisis: Implications for the United States," CRS Report for Congress (Washington, D.C.: Congressional Research Service, Library of Congress, November 2008), Order Code No. RS22984.
229. People's Daily quoted in Chris Buckley, "China Paper Urges New Currency Order after 'Tsunami,'" Reuters, September 17, 2008.
230. Wang and China Daily quoted in Dean, Areddy, and Ng, "Chinese Premier Blames Recession on U.S. Actions."
231. Goodman and Shenn, "Fannie Mae Rescue Hindered as Asians Seek Guarantee."
232. Elizabeth C. Economy and Adam Segal, "In China, Stimulus and Questions about Global Financial Governance," Expert Brief (New York: Council on Foreign Relations, November 13, 2008), http://www.cfr.org/publication/17742/.
233. Brad Setser, "China: Creditor to the Rich," China Security, Vol. 4, No. 4 (Autumn 2008), p. 21.
234. David A. Baldwin, Economic Statecraft (Princeton, N.J.: Princeton University Press, 1985).
235. Kirshner, Currency and Coercion, pp. 214-215.
236. Goodman and Shenn, "Fannie Mae Rescue Hindered as Asians Seek Guarantee."
237. Charles Duhigg, "U.S. Likely to Keep the Reins on Fannie and Freddie," New York Times, March 3, 2009.
238. Geoff Dyer, "China Lectures U.S. on Economy," Financial Times, December 4, 2008.
239. George Dean, "China Forex Watchdog Burnt by WaMu Collapse," Reuters, December 30, 2008.
240. Dean, Areddy, and Ng, "Chinese Premier Blames Recession on U.S. Actions."
241. Data from Chad P. Bown, "Global Antidumping Database," March 2009 update, http://people.brandeis.edu/?cbown/global_ad/.
242. Quoted in Jim Yardley and Keith Bradsher, "China, an Engine of Growth, Faces a Global Slump," New York Times, October 23, 2008.
243. Quoted in Krishna Guha and Alan Beattie, "Remarks by Geithner 'Will Anger China,'" Financial Times, January 22, 2009.
244. U.S. Senate Committee on Finance, Banking, hearing on confirmation of Mr. Ronald Kirk to be U.S. Trade Representative, 111th Cong., 1st sess., March 9, 2009, p. 98, http://finance.senate.gov/hearings/testimony/2009test/031109QFRspercent20forpercent20SubmissionRK.pdf.
245. Ian Talley and Tom Barkley, "Energy Chief Says U.S. Is Open to Carbon Tariff," Wall Street Journal, March 18, 2009.
246. Louis Uchitelle, "'Buy America' in Stimulus (but Good Luck with That)," New York Times, February 20, 2009
247. Jason Subler, "China Commentary Blasts 'Buy American' Plan," Reuters, February 14, 2009
248. Jamil Anderlini, "'Buy China' Policy Set to Raise Tensions," Financial Times, June 16, 2009
249. Lori Montgomery, "U.S. Debt Expected to Soar This Year,"Washington Post, January 3, 2009.
250. Dyer, "China's Dollar Dilemma"
251. Belinda Cao and Judy Chen, "China Needs U.S. Guarantees for Treasuries, Yu Says," Bloomberg, February 11, 2009.
252. See, for example, Zheng Xinli, "Expanding Economic Cooperation in China, Helping the Globe Get Rid of Crises," April 18, 2009, http://www.boaoforum.org/CPF/News_Show Content-en.asp?Seq?2005000982.
253. Zhou, "Reform the International Monetary System."
254. Alan Rappeport, "Chinese Official Warns U.S. on Protectionism," Financial Times, April 21, 2009
255. Chen Deming, "Strengthen U.S.-China Trade Ties," Wall Street Journal, April 27, 2009.
256. Federal Reserve, press release, March 18, 2009, http://www.federalreserve.gov/newsevents/press/monetary/20090318a.htm.
257. Minutes of the Federal Open Market Committee, March 17-18, 2009, http://federalreserve.gov/monetarypolicy/fomcminutes20090318.htm.
258. Mary Anastasia O'Grady, "Don't Monetize the Debt," Wall Street Journal, May 23, 2009
259. Federal Reserve, press release, June 24, 2009, http://federalreserve.gov/newsevents/press/monetary/20090624a.htm.
260. Andrew Batson, Andrew Browne, and Michael M. Phillips, "U.S. Insists China Fears over Debt Unfounded," Wall Street Journal, March 14, 2009
261. Geoff Dyer, "China Agrees on Need for Cooperation," Financial Times, April 1, 2009
262. David J. Lynch, "Chinese Leader Wen's Remarks Put Focus on U.S. Treasuries," USA Today, March 15, 2009
263. Andrew Batson, "China Takes Aim at Dollar," Wall Street Journal, March 24, 2009
264. Quoted in "Moody's Says U.S. Credit Rating Is 'Safe,'" Reuters, June 23, 2009.
265. Krishna Guha and Tom Braithwaite, "Dollar Dips on Geithner's 'Loose Talk,'" Financial Times, March 25, 2009
266. "Dollar Declines; BRICs Want Diversity," Dow Jones, June 16, 2009
267. John M. Berry, "China Toys with Biting Hand Feeding Its Surplus," Bloomberg, March 18, 2009
268. Gady Epstein, "China's U.S. Debt Quandary," Forbes.com, March 19, 2009
269. Joanna Slater, "Beijing Faces Big Barriers in Effort to Supplant Dollar," Wall Street Journal, March 24, 2009
270. David Pilling, "China Is Just Sabre-Rattling over the Dollar," Financial Times, April 1, 2009
271. Quoted in Lakshmanan, "Clinton Urges China to Keep Buying U.S. Treasury Securities."
272. Zhou Xin and Jason Subler, "China Still Prefers Treasuries-Gov't Advisor," Reuters, March 4, 2009
273. Zhou Xin, "China Keeps Faith with U.S. Treasuries," Reuters, March 23, 2009
274. Lionel Barber, MartinWolf, Jamil Anderlini, and Kathrin Hale, "U.S. Dollar Backed as Reserve Currency," Financial Times, June 1, 2009.
275. Vincent Del Giudice, "China Bought More U.S. Securities Even Amid Concerns," Bloomberg, April 15, 2009
276. John Murphy, Peter Stein, and Neil Shah, "Dollar Vexes Asian Central Banks," Wall Street Journal, May 26, 2009
277. Andrew Batson, "China-Watch the Body Language," Wall Street Journal, June 5, 2009;
278. See, for example, Chinese Foreign Minister Yang Jiechi's comments in his February press conference with U.S. Secretary of State Hillary Clinton. Hillary Rodham Clinton, "Toward a Deeper and Broader Relationship with China," Beijing, China, February 21, 2009, http://www.state.gov/secretary/rm/2009a/02/119432.htm.
279. Quoted in Henny Sender, "China to Stick with U.S. Bonds," Financial Times, February 11, 2009.
280. This includes the reaction to the naval skirmishes in March 2009. The United States sent a destroyer to guard the ship and stated that surveillance missions in the South China Sea would continue. See Demetri Sevastopulo and Kathrin Hille, "Beijing's Naval Harassment Rouses U.S.," Financial Times, March 25, 2009.
281. Quoted in Simon Rabinovitch, "Wary of U.S. Debt, China Shifts Gears on Investment," Reuters, May 19, 2009.
282. Quoted in Batson, Browne, and Phillips, "U.S. Insists China Fears over Debt Unfounded."
283. Mure Dickie, "Tax Rebates Raised for Chinese Exporters," Financial Times, November 12, 2008
284. Glenn Kessler, "Clinton's Candor Draws Mixed Reviews," Washington Post, February 23, 2009
285. "Statement by Treasury Secretary Timothy Geithner on Release of Semi-Annual Report to U.S. Congress on International Economic and Exchange Rate Policies," April 15, 2009, http://www.treas.gov/press/releases/tg90.htm.
286. Leonhardt, "The China Puzzle."
287. Alan Beattie, "IMF in Discord over Renminbi," Financial Times, January 26, 2009
288. Raphael Minder, Jamil Anderlini, and James Lamont, "China Blocks ADB Loan Plan," Financial Times, April 10, 2009
289. Bob Davis, "Developing Nations Try to Build Long-term Leverage at the IMF," Wall Street Journal, April 27, 2009
290. David Barboza, "China Starts Investing Globally," New York Times, February 20, 2009
291. Ariana Eunjung Cha, "China Gains Key Assets in Spate of Purchases," Washington Post, March 17, 2009
292. Tom Burgis, "Beijing to Boost Spending in Africa Fund," Financial Times, March 16, 2009
293. "China Offers Central Asia $10bn Credit Boost," Reuters, June 16, 2009
294. See People's Bank of China, "Strengthen Regional Financial Cooperation and Actively Conduct Currency Swap," press release, March 31, 2009, http://www.pbc.gov.cn/english//detail.asp?col?6400&ID?1299.
295. Paul Krugman, "China's Dollar Trap," New York Times, April 3, 2009
296. Jamil Anderlini, "China Stuck in 'Dollar Trap,'" Financial Times, May, 24, 2009
297. Sebastian Mallaby, "Beijing's Would-Be Houdinis," Washington Post, May 26, 2009
298. Zachary Karabell, "Why Beijing Wants a Strong Dollar," Wall Street Journal, May 28, 2009
299. Stephen S. Roach, "Manchurian Paradox," National Interest, No. 101 (May/June 2009), pp. 59-65.
300. On this point, see Asian Development Bank, "The Uncoupling Myth: The G3 Slowdown and Developing Asia," in Asian Development Outlook 2008 (Manila: Asian Development Bank, 2008), http://www.adb.org/Documents/Books/ADO/2008/prelims.asp.
301. Lawrence H. Summers coined this term. Summers, "The United States and the Global Adjustment Process," speech given at the Institute for International Economics,Washington, D.C., March 23, 2004.
302. Congressional Budget Office, "The Long-Term Budget Outlook" (Washington, D.C.: Congressional Budget Office, June 2009).
303. Aizenman and Lee, "Financial versus Monetary Mercantilism."