Tag Archive: China


The economic crisis, that hit especially hard the United States and some European countries, has changed the way countries like Brazil, China e India are perceived by the West. Before the recession they were seen as promising markets. Now, at the World´s Economic Forum, in Davos, the three, along with some other emerging countries, are being accepted as iquals.  Brazilian President Lula da Silva fell ill and decided to cancel his trip to Davos. Lula’s decision to skip the Forum this year can be considered a slap at the bankers whose “casino” mentality he cites almost weekly as bringing about a crisis in capitalism.

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By SAM ROBERTS – The New York Times

Published: December 15, 2009
India will become the world’s most populous country in 2025, surpassing China, where the population will peak one year later because of declining fertility, according to United States Census Bureau projections released Tuesday.

The bureau suggests that the projected peak in China, 1.4 billion people, will be lower than previously estimated and that it will occur sooner. With the fertility rate declining to fewer than 1.6 births per woman in this decade from 2.2 in 1990, China’s overall population growth rate has slowed to 0.5 percent annually.

In contrast, India’s 1.4 percent growth rate is being driven by a fertility rate of 2.7 births per woman.

The bureau’s International Data Base projects that China’s labor force will peak at 831 million — 24 million more workers than today — in 2016. That is because the number of newcomers to the labor force in their early 20s is expected to start declining in 2011 after reaching 124 million.

In India, the number of new entrants to the labor force is expected to reach 116 million in 2024 before decreasing.

China and India alone account for 37 percent of the world’s population of about 6.8 billion. Every minute, the bureau’s estimates, 250 people are born worldwide and 107 die, for an increase of more than 75 million annually.

By the time the 21st century is a quarter over, the bureau estimates, the population of the United States will be more than 350 million. The United States fertility rate, about 2.1 births per woman, is higher than in most developed countries, in part as a result of higher birthrates among immigrants.

After China and India, the most populous countries are, in order, the United States, Indonesia, Brazil, Pakistan, Bangladesh, Nigeria, Russia and Japan.

The worldwide population estimates include more than 11 million people over the age of 90 and more than 326,000 centenarians.

More boys are being born than girls, but women begin to outnumber men among people in their late 40s.

Chinese President Hu Jintao (R) shakes hands with his Brazilian counterpart Luiz Inacio Lula da Silva at the Great Hall of the People in Beijing, in May 2009. By 2050, Brazil will be the fourth economy in the world. (Xin hua/Rao Aimin)

The New York Times
Chapter 1: The Changing of the Guard

Since 1945 the United States has been the world’s dominant power. Even during the Cold War its economy was far more advanced than, and more than twice as large as, that of the Soviet Union, while its military capability and technological sophistication were much superior. Following the Second World War, the US was the prime mover in the creation of a range of multinational and global institutions, such as the United Nations, the International Monetary Fund and NATO, which were testament to its new-found global power and authority. The collapse of the Soviet Union in 1991 greatly enhanced America’s pre-eminent position, eliminating its main adversary and resulting in the territories and countries of the former Soviet bloc opening their markets and turning in many cases to the US for aid and support.

Never before, not even in the heyday of the British Empire, had a nation’s power enjoyed such a wide reach. The dollar became the world’s preferred currency, with most trade being conducted in it and most reserves held in it. The US dominated all the key global institutions bar the UN, and enjoyed a military presence in every part of the world. Its global position seemed unassailable, and at the turn of the millennium terms like ‘hyperpower’ and ‘unipolarity’ were coined to describe what appeared to be a new and unique form of power.

The baton of pre-eminence, before being passed to the United States, had been held by Europe, especially the major European nations like Britain, France and Germany, and previously, to a much lesser extent, Spain, Portugal and the Netherlands. From the beginning of Britain’s Industrial Revolution in the late eighteenth century until the mid twentieth century, Europe was to shape global history in a most profound manner. The engine of Europe’s dynamism was industrialization and its mode of expansion colonial conquest. Even as Europe’s position began to decline after the First the changing of the guard

World War, and precipitously after 1945, the fact that America, the new rising power, was a product of European civilization served as a source of empathy and affinity between the Old World and the New World, giving rise to ties which found expression in the idea of the West while serving to mitigate the effects of latent imperial rivalry between Britain and the United States. For over two centuries the West, first in the form of Europe and subsequently the United States, has dominated the world.

We are now witnessing an historic change which, though still relatively in its infancy, is destined to transform the world. The developed world – which for over a century has meant the West (namely, the United States, Canada, Western Europe, Australia and New Zealand) plus Japan – is rapidly being overhauled in terms of economic size by the developing world.

In 2001 the developed countries accounted for just over half the world’s GDP, compared with around 60 per cent in 1973. It will be a long time, of course, before even the most advanced of the developing countries acquires the economic and technological sophistication of the developed, but because they collectively account for the overwhelming majority of the world’s population and their economic growth rate has been rather greater than that of the developed world, their rise has already resulted in a significant shift in the balance of global economic power.

There have been several contemporary illustrations of this realignment. After declining for over two decades, commodity prices began to increase around the turn of the century, driven by buoyant economic growth in the developing world, above all from China, until the onset of a global recession reversed this trend, at least in the short run.

Meanwhile, the stellar economic performance of the East Asian economies, with their resulting huge trade surpluses, has enormously swollen their foreign exchange reserves. A proportion of these have been invested, notably in the case of China and Singapore, in state-controlled sovereign wealth funds whose purpose is to seek profitable investments in other countries, including the West. Commodity-producing countries, notably the oil-rich states in the Middle East, have similarly invested part of their newly expanded income in such funds.

Sovereign wealth funds acquired powerful new leverage as a result of the credit crunch, commanding resources which the major Western financial institutions palpably lacked. The meltdown of some of Wall Street’s largest financial institutions in September 2008 underlined the shift in economic power from the West, with some of the fallen giants seeking support from sovereign wealth funds and the US government stepping in to save the mortgage titans Freddie Mac and Fannie Mae partly in order to reassure countries like China, which had invested huge sums of money in them: if they had withdrawn these, it would almost certainly have precipitated a collapse in the value of the dollar. The financial crisis has graphically illustrated the disparity between an East Asia cash-rich from decades of surpluses and a United States cash-poor following many years of deficits.

According to projections by Goldman Sachs, the three largest economies in the world by 2050 will be China, followed by a closely matched America and India some way behind, and then Brazil, Mexico, Russia and Indonesia. Only two European countries feature in the top ten, namely the UK and Germany in ninth and tenth place respectively. Of the present G7, only four appear in the top ten. In similar forecasts, PricewaterhouseCoopers suggest that the Brazilian economy could be larger than Japan’s, and that the Russian, Mexican and Indonesian economies could each be bigger than the German, French and UK economies by 2050. If these projections, or something similar, are borne out in practice, then during the next four decades the world will come to look like a very different place indeed.

Excerpted from “When China Rules the World: The End of the Western World and the Birth of a New Global Order” by Martin Jacques. Reprinted by arrangement with The Penguin Press, a member of Penguin Group (USA), Inc. Copyright (c) November, 2009.


The Copenhagen opening ceremony on Monday as the climate change summit began

By Reuters

COPENHAGEN (Reuters) – China led calls by developing nations for deeper emissions cuts from the United States, Japan and Europe at U.N. climate talks on Tuesday, as a study showed that this decade will be the warmest on record.

The first decade of this century was the hottest since records began, the World Meteorological Organisation said, underscoring the threat scientists say the planet faces from rising temperatures.

Negotiators from nearly 200 countries are trying to seal the outlines of a climate pact to combat rising seas, desertification, floods and cyclones that could devastate economies and ruin the livelihoods of millions of people.

Yvo de Boer, head of the U.N. Climate Change Secretariat, said the Dec 7-18 talks in Copenhagen were “off to a good start.” The EU said it was positive that no one had walked out of negotiation sessions.

But a rich-poor rift continued to cloud negotiations on finance and emissions cuts. Recession-hit rich countries have not yet made concrete offers to aid developing nations who also want the industrialised world to act faster to curb emissions.

China and many other developing nations urged the rich to make deeper cuts in emissions and Beijing scoffed at a fast-start fund of $10 billion (£6.1 billion) a year meant to help developing countries from 2010 that rich countries are expected to approve.

China, the world’s biggest emitter of greenhouse gases, criticised goals set by the United States, the European Union and Japan for cuts in greenhouse gas emissions by 2020.

Su Wei, a senior Chinese climate official at U.N. climate talks in Copenhagen, said the targets broadly fell short of the emissions cuts recommended by a U.N. panel of scientists. The panel has said cuts of 25 to 40 percent below 1990 levels by 2020 were needed to avoid the worst of global warming.

He said a U.S. offer, equal to 3 percent below 1990 levels by 2020, “cannot be regarded as remarkable or notable.” An EU cut of 20 percent was also not enough and Japan was setting impossible conditions on its offer of a 25 percent cut by 2020.

“LIFE AND DEATH”

“This $10 billion if divided by the world population, it is less than $2 per person,” he said, adding it was not even enough to buy a cup of coffee in Copenhagen or a coffin in poorer parts of the world.

“Climate change is a matter of life and death,” he said.

Brazil’s climate change ambassador said his country did not want to sign up for a long-term goal of halving global emissions by 2050 unless rich nations took on firm shorter-term targets — which the Danish hosts view as a core outcome for the talks.

Copenhagen was meant to seal a legally binding climate deal to broaden the fight against climate change by expanding or replacing the Kyoto Protocol from 2013.

While that now looks out of reach, host Denmark wants leaders to at least agree on a “politically binding” deal. The Danish government has said this would be 5 to 8 pages with annexes from all countries describing pledged actions.

Negotiators are also trying to whittle down almost 200 pages of draft text that is expected to form the basis of an eventual post-2012 climate treaty. While negotiators have made progress refining the text, it is still full of blanks and options.

African civil groups led a protest inside the main conference centre in Copenhagen, urging more aid to prepare for global warming. “Africans are suffering. We will not die in silence,” said Augustine Njamnshi of Christian Aid.

“PLEASING THE RICH”

A draft 9-page Danish text with annexes seen by Reuters last week drew criticism by environmental activists, who said it undermined the negotiations.

“Focus on the Danish text right now is a distraction from the negotiations,” said Kim Carstensen, head of conservation group WWF’s global climate initiative, adding the text did not lay out what would happen to the Kyoto Protocol.

He called the Danish text a weak attempt to accommodate the United States. De Boer described the text as an informal paper for the purposes of consultation and not an official part of the negotiations.

Much is riding on what U.S. President Barack Obama can bring to the table in Copenhagen when he joins more than 100 other world leaders during a high-level summit on Dec 17-18.

Washington’s provisional offer is to cut emissions by 17 percent by 2020 from 2005 levels, or 3 percent below the U.N.’s 1990 baseline.

The U.S. Environmental Protection Agency ruled on Monday that greenhouse gases endanger human health, allowing it to regulate them without legislation from the Senate, where a bill to cut U.S. emissions by 2020 is stalled.

Delegates cautiously welcomed the step as a boost for Obama.

(Additional reporting by Gerard Wynn, Alister Doyle, Richard Cowan and John Acher in Copenhagen; Writing by David Fogarty; Editing by Noah Barkin)

Countdown to Copenhagen, Parque do Ibirapuera, São Paulo, Brazil

By TOM ZELLER Jr. – The New York Times

With the scientific consensus more or less settled that human activity — the burning of fossil fuels, torching of forests, and so forth — is contributing to a warmer and less hospitable planet, one might reasonably ask, why is it so hard to agree on a plan to curb those activities?

The answer lies with the many fault lines that cut through the debate over climate change. Those deep divisions will be on display beginning this week as representatives of 192 nations gather in Copenhagen for a United Nations conference on the issue.

Organizers had hoped to emerge with an international compact to reduce greenhouse gas emissions and help countries most threatened by rising sea waters and temperatures. But the divisions between nations are such that world leaders agreed last month to put off resolving the most contentious issues until next year. They will try instead to reach a nonbinding interim agreement in Copenhagen, then work toward a binding treaty in 2010.

Just what will happen, of course, remains to be seen. Here’s a primer on some of the major themes and fissures:

RICH NATIONS VS. POOR NATIONS

Who should pay whom for what — and how much?

The Bolivias and Chads and Mauritanias of the world argue that they are more vulnerable to changes in temperature, and have little or no resources to adapt to changes in the growing seasons or increased rainfall or — worst case — to relocate large numbers of people.

They want the rich world to commit to far deeper emissions cuts than they already have, and to provide them with cash and technology so they can prepare for the worst and develop a clean energy infrastructure for themselves.

The rich world, meanwhile, is busy trying to figure out just how to calculate the cost of all this (estimates run into the trillions of dollars), and how to divvy up the bill.

DEVELOPED VS. DEVELOPING ECONOMIES

This is where postindustrial economies like the United States and Europe, which became prosperous by burning carbon-dioxide-spewing fossil fuels, face off against industrializing economies like China, Brazil and India, which resent pressure to decarbonize their energy systems now that they are growing.

The standoff between China and the United States underscores the issues. The global trade rivals were reluctant to commit to emissions targets until each had an idea of what the other planned. The two countries together are responsible for 40 percent of the world’s greenhouse gas emissions. But all players have been eyeing each other warily.

In recent weeks, bidding has begun, with Brazil, then the United States, followed by China and, last week, India, offering up individual emissions goals. But they have used different baselines against which to measure their reductions, making it difficult to determine whether there is parity.

ISLAND AND COASTAL NATIONS VS. THE CLOCK

In mid-October, ministers of the government of the Maldives, a low-lying island nation in the Indian Ocean, donned scuba gear and held a 30-minute cabinet meeting underwater off the coast of the capital, Malé.

The stunt was designed to highlight the nation’s plight — and that of three-dozen or so other small island and coastal countries — should global warming raise sea levels in the coming decades. Even a modest increase could leave a number of low-lying nations uninhabitable.

As a bloc, these countries have been lobbying for an international agreement to keep average temperatures from rising beyond 1.5 degrees Celsius — or 2.7 degrees Fahrenheit. They also want global emissions scaled back by as much as 85 percent by midcentury.

The bloc, which includes a wide range of economies, from relatively well-to-do Singapore to strugglers like Haiti, wins points for being at the front lines of a planetary problem, but its political clout at the negotiating table is uncertain.

EUROPE VS. EUROPE

Even though the European Union has been at the vanguard of renewable energy development and emissions reduction through its carbon trading scheme, it is struggling internally over each nation’s carbon quotas, assistance to developing countries and fidelity to the emissions reductions agreed to in 1997 under the Kyoto Protocol.

While Europe as a whole is on track to meet its goal of an 8 percent reduction over 1990 emissions levels by 2012, not every country has pulled its weight. Nations unlikely to meet their individual Kyoto targets include Italy, Spain and, yes, Denmark, host of the Copenhagen talks.

Poland and Estonia, meanwhile, have been bickering with the European Commission over the amount of carbon dioxide the two countries should be allowed to emit. Both rely heavily on coal for electricity.

Oil-producing nations are worried about the impact of a global climate deal, and they have increasingly argued that any agreement that would reduce reliance on fossil fuels should include compensation for their lost revenues.

Saudi Arabia has spearheaded this argument, and while environmental groups and other stakeholders have dismissed the notion as a stunt, oil producers are not without the ability to muddle negotiations if push comes to shove.

Meanwhile, developers of wind, solar and other renewable technologies anticipate a windfall if the community of nations — including mega-polluters like the United States — agree to a binding climate treaty. So, too, do global banks, which would presumably do handsomely through an expanded carbon trading market.

Lobbyists from all sides will be wining and dining delegates over the next two weeks.

CARBON TAXERS VS. CARBON TRADERS

Many experts argue that the only way to tackle climate change is to put a price on carbon. Some say the best way to do that is to create a cap-and-trade system, in which industries are issued permits to emit carbon dioxide up to a certain level, or cap. Companies that emit below the cap can then sell their permits on a carbon market, where companies exceeding the cap will, presumably, buy them so they can continue to pollute. The total number of permits would not exceed an overall emissions target.

Europe has had an emissions trading scheme since 2005. Some critics argue, however, that such systems are unnecessarily complicated and prone to manipulation. A simpler solution would be a tax on carbon, they say.

But with a cap-and-trade scheme forming the bedrock of negotiations in Copenhagen, and among legislators in Congress seeking to pass national climate legislation, the carbon-tax camp has been increasingly marginalized.

EMERGENCY VS. WE’LL FIGURE IT OUT

The idea that human beings are nudging the planet’s thermostat upward is widely accepted among climatologists. But just how rapidly things are changing, to what extent and where — and at what threshold, if any, should we abandon all hope — are far less settled questions.

In 2008, the NASA scientist and global warming guru James Hansen identified 350 parts per million as the upper limit for safe atmospheric carbon concentration. Current levels are approaching 390 parts per million.

Others argue that there is no reason for panic — nor for what they say is an economy-crushing global climate treaty. They are putting their faith in human ingenuity, arguing that planetary-scale engineering projects like blasting seawater into the atmosphere to increase the heat reflectivity of certain clouds (yes, that’s a real idea), will eventually solve the problem.

By Juliet Eilperin, Washington Post Staff Writer

By offering concrete emission targets last week, the United States and China have resuscitated global climate talks that were headed toward an impasse. But the details that have yet to be resolved — including the money that industrialized countries would offer poorer ones as part of an agreement — suggest a political deal remains a heavy lift for the 192 countries set to convene in Copenhagen in little more than a week.

Negotiators aim to produce a blueprint for a legally binding international treaty that would replace the Kyoto Protocol when it expires in 2012 and govern individual countries’ greenhouse gas emissions.

Although the proposals from the world’s two biggest greenhouse-gas emitters have boosted the prospects for a deal, they demonstrate something else as well: No one wants to shoulder the blame for failure at Copenhagen, even if it means the final outcome falls short of what many had envisioned a year or two ago. The U.S. pledge to cut its emissions by 2020 and China’s offer to lower its carbon dioxide output relative to the size of its economy by the same date are more modest than what their negotiating partners had demanded.

The fact that countries are defining their climate goals in varied ways — including different baseline years and efficiency targets rather than absolute cuts — makes it hard to assess their commitments. The United States has pledged cuts that are modest in the first decade but ambitious 15 and 20 years from now, while China has set a target that could amount to a meaningful reduction if the country’s growth rate slows somewhat.

Keya Chatterjee, the U.S. director for the World Wildlife Fund climate change program, likened the developments to “a phoenix . . . rising from the ashes.” She added that, under a best-case scenario, “It’s not a deal that’s going to solve the problem of climate change a hundred percent. . . . But it is a deal that’s going to create a foundation and an international architecture for resolving this issue over time.”
A senior Obama administration official offered a more cautious assessment: “There’s a very real chance of getting this done, but hurdles remain.”

The biggest remaining obstacle is money, including how much the developed world will give developing nations to cope with the impact of global warming and to acquire technology to curb their emissions. The United States has not said how much it would pay into any global fund, which the Europeans have estimated would require at least $10 billion annually beginning next year.

And on Thursday, Brazilian President Luiz Inácio Lula da Silva said at a meeting of Amazon nations that wealthier countries must “pay the price” for protecting rain forests that are vulnerable to clear-cutting and burning by farmers and ranchers, activities that help fuel global warming.

Connie Hedegaard, the Danish minister for the climate conference, said “the decision on finance” was the most pressing issue developed countries face.

The Obama administration has allocated about $1.2 billion toward international climate programs as part of its proposed fiscal 2010 budget. Sen. John F. Kerry (D-Mass.), chairman of the Foreign Relations Committee, said in an interview that it would take at least twice as much to help seal a deal in Copenhagen.

China’s announcement Thursday that it would send Premier Wen Jiabao to the talks and improve its economy’s energy efficiency — by as much as 45 percent by 2020, compared with 2005 levels — makes it easier for other countries to commit to a treaty, but it remains unclear how the outside world would verify these cuts.

“It’s great the Chinese have come forward with a plan, but are they willing to have that part of a binding agreement?” said Stephen Eule, vice president for climate and technology at the U.S. Chamber of Commerce’s Energy Institute.

South Korea’s climate change ambassador, Chung Rae-kwon, whose country just pledged to cut its emissions 4 percent below 2005 levels by 2020, wrote in an e-mail to The Washington Post that China’s proposal was “a great step forward” but added, “The issue now is how this Chinese target can be captured in the agreement to be achieved in Copenhagen.”

Several U.S. senators have said they cannot endorse domestic climate legislation or an international treaty unless it ensures that such economic competitors as China and India will take steps to curb their carbon dioxide output.

Senate Republican Conference Chairman Lamar Alexander (R-Tenn.) said in an interview that it was hard to determine whether the Chinese announcement addresses that concern. He added that he would rather have Obama focus on building more nuclear power plants and electrifying the U.S. auto fleet than “making trips to Copenhagen, trying to convince China to make itself poorer when so many people there live on less than a dollar a day.”

Daniel Price, an international economics adviser on the climate talks under former president George W. Bush, said negotiators still must resolve a range of issues, such as protecting the intellectual property rights of technological innovators and ensuring the integrity of any carbon trading scheme created under the pact.

The need for consensus under the United Nations Framework Convention on Climate Change, which governs the talks, offers further complications. A bloc of African nations agreed this month on their bottom line for any deal but have not disclosed it. Major developing countries such as China, India and Brazil say they, too, will offer a unified position at the negotiations, but they have yet to determine it.
India’s environment minister, Jairam Ramesh, told the Hindustan Times newspaper that China’s announcement was “a wake-up call. . . . We have to think hard about our climate strategy now and look for flexibility.”

Dominick DellaSala, president of the National Center for Conservation Science and Policy, said the emerging compromise could prompt negotiators to “lock in” less ambitious emission targets in the short term.

Even Hedegaard, the Danish minister, noted that the current climate pledges by developing countries amount to an 18 percent reduction below 1990 emission levels by 2020, but the United States is pledging to cut emissions by about 4 percent by then. Europeans and many scientists have called for a 25 to 40 percent cut.
Cutting a political deal now, argued Hedegaard and environmental advocates such as Chatterjee, makes more sense than holding out for a perfect agreement.

“If we don’t resolve it now, it’s not going to get any easier,” Chatterjee said. “Time doesn’t really help resolve issues of equity.”

World Out of Balance

International travel by world leaders is mainly about making symbolic gestures. Nobody expects President Obama to come back from China with major new agreements, on economic policy or anything else.
Photo by Fred R. Conrad/The New York Times

But let’s hope that when the cameras aren’t rolling Mr. Obama and his hosts engage in some frank talk about currency policy. For the problem of international trade imbalances is about to get substantially worse. And there’s a potentially ugly confrontation looming unless China mends its ways.

Some background: Most of the world’s major currencies “float” against one another. That is, their relative values move up or down depending on market forces. That doesn’t necessarily mean that governments pursue pure hands-off policies: countries sometimes limit capital outflows when there’s a run on their currency (as Iceland did last year) or take steps to discourage hot-money inflows when they fear that speculators love their economies not wisely but too well (which is what Brazil is doing right now). But these days most nations try to keep the value of their currency in line with long-term economic fundamentals.

China is the great exception. Despite huge trade surpluses and the desire of many investors to buy into this fast-growing economy — forces that should have strengthened the renminbi, China’s currency — Chinese authorities have kept that currency persistently weak. They’ve done this mainly by trading renminbi for dollars, which they have accumulated in vast quantities.

And in recent months China has carried out what amounts to a beggar-thy-neighbor devaluation, keeping the yuan-dollar exchange rate fixed even as the dollar has fallen sharply against other major currencies. This has given Chinese exporters a growing competitive advantage over their rivals, especially producers in other developing countries.

What makes China’s currency policy especially problematic is the depressed state of the world economy. Cheap money and fiscal stimulus seem to have averted a second Great Depression. But policy makers haven’t been able to generate enough spending, public or private, to make progress against mass unemployment. And China’s weak-currency policy exacerbates the problem, in effect siphoning much-needed demand away from the rest of the world into the pockets of artificially competitive Chinese exporters.

But why do I say that this problem is about to get much worse? Because for the past year the true scale of the China problem has been masked by temporary factors. Looking forward, we can expect to see both China’s trade surplus and America’s trade deficit surge.

That, at any rate, is the argument made in a new paper by Richard Baldwin and Daria Taglioni of the Graduate Institute, Geneva. As they note, trade imbalances, both China’s surplus and America’s deficit, have recently been much smaller than they were a few years ago. But, they argue, “these global imbalance improvements are mostly illusory — the transitory side effect of the greatest trade collapse the world has ever seen.”

Indeed, the 2008-9 plunge in world trade was one for the record books. What it mainly reflected was the fact that modern trade is dominated by sales of durable manufactured goods — and in the face of severe financial crisis and its attendant uncertainty, both consumers and corporations postponed purchases of anything that wasn’t needed immediately. How did this reduce the U.S. trade deficit? Imports of goods like automobiles collapsed; so did some U.S. exports; but because we came into the crisis importing much more than we exported, the net effect was a smaller trade gap.

But with the financial crisis abating, this process is going into reverse. Last week’s U.S. trade report showed a sharp increase in the trade deficit between August and September. And there will be many more reports along those lines.

So picture this: month after month of headlines juxtaposing soaring U.S. trade deficits and Chinese trade surpluses with the suffering of unemployed American workers. If I were the Chinese government, I’d be really worried about that prospect.

Unfortunately, the Chinese don’t seem to get it: rather than face up to the need to change their currency policy, they’ve taken to lecturing the United States, telling us to raise interest rates and curb fiscal deficits — that is, to make our unemployment problem even worse.

And I’m not sure the Obama administration gets it, either. The administration’s statements on Chinese currency policy seem pro forma, lacking any sense of urgency.

That needs to change. I don’t begrudge Mr. Obama the banquets and the photo ops; they’re part of his job. But behind the scenes he better be warning the Chinese that they’re playing a dangerous game.

Lost There, Felt Here

 Photo: Fred R. Conrad/The New York Times

By  Thomas L. Friedman

Belem, Brazil  – “One million dollars?” The question was asked with eyes wide and a voice of incredulity. The person asking was Antonio Waldez Góes da Silva, the governor of the Amazonian state of Amapá, which has the biggest national park in the world. I had just shared with Gov. Waldez Góes a recent news article in The Hill, the Congressional newspaper, which said the total cost of stationing one U.S. soldier in Afghanistan for one year is $1 million. What if we kept just one soldier back from Afghanistan and gave you the money, I asked the governor? What would it buy you? Gov. Waldez Góes mulled that over: “If you kept three soldiers back, that would be enough for me to keep the State University of Amapá running for one year, so 1,400 students could take different courses on sustainable development for the Amazon.” O.K., I know. It is a bit misleading to take a war budget and assume that if it weren’t spent on combat, it would all go to schools or parks. And we do have real enemies. Some wars have to be fought, no matter the cost. But such comparisons are still a useful reminder that our debate about Afghanistan is not taking place in a vacuum. We will have to make trade-offs, and there are other hugely important projects today crying out for funding, as my colleague Nick Kristof has pointed out regarding health care. Well, if America is going to assume the primary burden of fixing Central Asia, maybe, say, China, could help pick up the tab for saving what is left of the Amazon and the world’s other great tropical forests. Could President Obama raise that idea in Beijing? An intergovernmental working group for saving the rainforests estimates that for about $30 billion we could reduce deforestation in places like Brazil, Indonesia and the Congo by 25 percent by 2015. After that, financing from global carbon markets, plus these countries’ own resources, could save much of the rest. China now has $2.2 trillion in reserves. How about it, Beijing? Why don’t you step up and provide some public goods for the world for once — not because you get a direct benefit, but just because it would make the world a better place for everyone? Sure, America should still lead such efforts. But China’s days as a global free-rider should be over. China should pay its fair share — and more — since it will benefit every bit as much as the U.S., Europe and Japan. Indeed, the U.N. Foundation estimates that because living tropical forests are such huge storehouses of carbon — which gets released when we chop the trees down — if we just stop deforestation, we get a big chunk of the carbon-emissions reductions the world needs between now and 2020. “And forest-rich developing countries, like Brazil, are now ready to do their part because they depend on the water that the rainforests provide for energy and agriculture, and because they see a new model for growth based on their natural capital,” said Glenn Prickett, a senior vice president with Conservation International and my traveling companion here. “Brazil has developed the science, political will and basic rules and institutions for preserving its rainforests. What Brazil and other rainforest nations like Indonesia lack, though, are the funds to take this new economic model to scale.” I was struck by how many of the building blocks for “natural capitalism” that Gov. Waldez Góes — whose state sits at the mouth of the Amazon — is putting in place, so that he can have an economy based on preserving the rainforest rather than stripping it. He’s building on the three P’s — creating protected forest areas, improving productivity on lands that have already been cleared so farmers there will not need more, and establishing property rights for Amazonian lands, which are a legal mess, inviting Wild West land grabs and scaring off investors in sustainable agriculture. Gov. Waldez Góes has already protected 75 percent of his state as rainforest and has enacted the laws and created a technical college to provide for sustainable logging and eco-tourism and for developing medicinal and cosmetic products from rainforest plants. But he needs funds to implement and monitor at scale and prove that “natural capitalism” can deliver more than the extractive version. “I am the son of a rubber tapper,” he explains. “I was born and raised in the jungle, so even before becoming a politician I had a strong connection to nature.” The world is facing this relentless “development path that brings pollution and degradation and deforestation,” he added. He and other Brazilians want to prove you can do better by bringing “conservation and development together.” Tropical forests represent some 5 percent of the earth’s surface but harbor 50 percent of all living species. Conservation International has a motto: “What is lost there is felt here.” If we lose what is left of the Amazon, we’ll all feel the climate effects, changing rainfall and loss of biodiversity that enriches our world. Brazil seems ready to do its part. Are we? What about you, China?