Voice

Reader contest: help China insult the United States!!

You know, as insults go, this one is pretty bush league:

China's credit-rating agency on Tuesday downgraded its rating for U.S. sovereign debt and warned of further cuts, in a pointed move ahead of this week's Group of 20 major economies meeting.

Dagong Global Credit Rating Co. Ltd., the only wholly Chinese-owned rating agency, cut its rating on U.S. debt to A from AA, citing the Federal Reserve's move last week to initiate another round of asset buying, worth $600 billion. It also placed the U.S. sovereign credit rating on negative watch.

"The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar and the continuation and deepening of credit crisis in the U.S.," Dagong said.

"Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government's intention of debt repayment," the agency said.

Sounds very, very serious, until we get to this part of the story:

The downgrade of the U.S. rating by Dagong comes just over a month after the U.S. Securities and Exchange Commission denied the firm's application to officially rate bonds in the U.S.

At that time, Dagong called the SEC's move discriminatory and said it was considering legal action.

The SEC said in denying the application that "it does not appear possible at this time for Dagong to comply with the record keeping, production and examination requirements of the federal securities laws."

Indeed, even the New York Times' now-thrice-weekly story about rising Sino-American tensions observes:

In the rest of the world, the United States is still the strongest of credit risks, and the Chinese downgrade is not expected to have much real impact....

[T]hose critics, mostly countries that fear that recent American policy will devalue the dollar and undercut their competitiveness, do not appear poised to offer an alternative to an economic order that has been led by the United States since the end of World War II, or to the role the dollar has played for decades as the de facto world gold standard.

The Chinese, who have protested that the Federal Reserve is trying to unilaterally manipulate the dollar for the purpose of creating jobs at home, have been accused of doing exactly that for years - the root of many of the world's economic tensions today, in the eyes of Mr. Obama and his economic aides.

Look, clearly China is suffering from... an insult gap. Americans have been leading the world in trash-talking for decades now. China is trying hard to catch up, but I think the authorities in Beijing need some assistance in their game of catch-up.

I hereby call on all readers to offer, in the comments, ways that Chinese authorities can really sharpen their rhetorical jabs at the United States. In the spirit of kicking off the conversation, here are a few suggestions:

"Chinese Halitosis Institute Downgrades American Fresh Breath Index to BB: 'Seriously, What's The Deal With All The BBQ,' Asks Agency Head"

"Chinese Election Monitors Accuse Obama Administration of Rampant Ballot Fraud During Midterm Elections: 'It's No Myanmar, I'll Say That' According to Chief Monitor"

"Chinese Dietary Institute says American Food Leaves Them Hungry After Only 12 Hours"

Go to it.

Daniel W. Drezner

The globalization of gridlock

As I said last week, the emergence of gridlock between the legislative and executive branches of U.S. government is going to put political pressure on the unelected components of government.

This isn't just a national phenomenon, however -- it's also an international one. What happens if the big players on the global stage can't agree -- either internally or externally -- on new arrangements to solve a mounting policy problem? If the problem clearly needs fixing, then pressure inevitably builds up to use a pre-existing mechanism to address the issue. Some elites in gridlocked countries will welcome this kind of development, because it allows them to bypass domestic impediments to policy change. Because this new possibility is both suboptimal and less than democratic, however, it inevitably builds up global resentments against unaccountable international institutions.

For exhibit A of this phenomenon today, let's wander over to John Broder's New York Times story on the latest developments in fashioning a policy response to climate change:

With energy legislation shelved in the United States and little hope for a global climate change agreement this year, some policy experts are proposing a novel approach to curbing global warming: including greenhouse gases under an existing and highly successful international treaty ratified more than 20 years ago.

The treaty, the Montreal Protocol, was adopted in 1987 for a completely different purpose, to eliminate aerosols and other chemicals that were blowing a hole in the Earth's protective ozone layer.

But as the signers of the protocol convened the 22nd annual meeting in Bangkok on Monday, negotiators are considering a proposed expansion in the ozone treaty to phase out the production and use of the industrial chemicals known as hydro fluorocarbons or HFCs The chemicals have thousands of times the global warming potential of carbon dioxide, the most prevalent greenhouse gas.

HFCs are used as refrigerants in air-conditioners and cooling systems. They are manufactured mostly in China and India, but appliances containing the substance are in use in every corner of the world. HFCs replaced even more dangerous ozone-depleting chemicals known as HCFCs, themselves a substitute for the chlorofluorocarbons that were the first big target of the Montreal process…

[T]he plan is not expected to be adopted this year. Large developing countries, including China, India and Brazil, object that the timetable is too rapid and that payments for eliminating the refrigerant are not high enough.

One advantage to using the Montreal protocol as a vehicle, supporters say, is that negotiations over the treaty have been utterly unlike the contentious United Nations climate talks that foundered in Copenhagen last year. Negotiators say that without legislative action on curbing greenhouse gases by the United States, little progress will be made when countries gather in Cancún, Mexico, late this month for another round of climate talks.

In a post-election news conference, President Obama noted that it was doubtful that Congress would do anything to address global warming "this year or next year or the year after."…

Daniel A. Reifsnyder, the deputy assistant secretary of state for environment and the nation's chief Montreal Protocol negotiator, said that it might take several years to persuade the ozone treaty countries to back the plan.

In addition to pace and cost issues, some countries say that HFCs have little impact on the ozone layer and thus should be handled under the United Nations climate change talks. Mr. Reifsnyder dismissed that as a legalistic argument and said that the ozone treaty could and should be used to achieve broader environmental objectives.

"What we've found is that the Montreal Protocol has been a very effective instrument for addressing global environmental problems," Mr. Reifsnyder said in an interview. "It was created to deal with the ozone layer, but it also has tremendous ability to solve the climate problem if people are willing to use it that way."

If I was the policymaker in charge of pushing action on climate change forward, I'd be very tempted to agree with Reifsnyder. This might be a way of achieving a deliverable that would simply not be possible under the Copenhagen Accord or the United Nations effort to negotiate a successor to the Kyoto Protocol.

On the other hand… this is also an action that would inject political controversy into what was a ridiculously successful accord. It will push another governance process that's already in critical condition into hospice care. Plus, I'm not sure it will work -- China and India are going to stoutly resist this move.

My larger point, however, is that political paralysis in certain global governance forums is simply going to trigger a search for more suitable global governance structures. That search isn't going to change the underlying disagreements, however, and it just might cause an erosion of faith in the few multilateral structures that do appear to work well.