This Week in China

In honor of this week's US-China Strategic and Economic Dialog, today's Crisis Talk is dedicated to the latest discussions on Sino-American economic relations.

To start, Brad Setser has three excellent articles on Chinese-American monetary relations:

• The first article points out that the PBoC's balance sheet totals 70% of GDP, compared to the Fed's, which recently hit 15% (and was 6% before the crisis).
• The second asks, "Doesn’t a smaller (external) deficit mean less dependence on (external) creditors, including China?" Setser thinks so, and I agree.
• Third, for all its concerns about a weak dollar, China has been allowing its own currency to depreciate lately. 

Simon Johnson analyzes Tim Geithner's China strategy:

Any country that runs such a current account surplus is implicitly taking a great deal of currency risk – China was in effect deciding to take the biggest ever official long-dollar position.  The idea that the US government should spend time reassuring them is somewhere between quaint and not good strategy.

Today's FT has two commentaries on China and the dollar. The titles speak for themselves:

• Washington risks taking China too seriously
• Chatter about a new global currency is overblown

Finally, China Law Blog gives advice on how to avoid getting kidnapped in China.  The solution: "Plan in advance or go home."