The Unz Review - Mobile
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
 BlogviewEamonn Fingleton Archive
Why British Prime Minister Cameron Is Stiffing Obama to Woo Beijing
🔊 Listen RSS
Email This Page to Someone

 Remember My Information


Bookmark Toggle AllToCAdd to LibraryRemove from Library • BShow CommentNext New CommentNext New ReplyRead More
ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
These buttons register your public Agreement, Disagreement, Troll, or LOL with the selected comment. They are ONLY available to recent, frequent commenters who have saved their Name+Email using the 'Remember My Information' checkbox, and may also ONLY be used once per hour.
Ignore Commenter Follow Commenter
Search Text Case Sensitive  Exact Words  Include Comments
List of Bookmarks

The Financial Times this morning carries an important exclusive on British Prime Minister David Cameron’s defiance of a White House effort to counter Chinese financial power. The White House had been trying to organize a G7 boycott of the new Asian Infrastructure Investment Bank, which is seen in Washington as a Chinese-inspired rival to the American-led World Bank. In an astonishing departure from normal British diplomacy, Cameron has broken ranks to back the Chinese initiative. The Obama White House has retaliated by publicly criticizing the Cameron government for its “constant accommodation” of China. The Obama slap-down is well timed because Cameron is facing an exceptionally tough general election in less than two months.

So why did Cameron do it? Part of it may be personal. Rumors have circulated for years about his uneasy relations with Obama. But there is surely more to it than that. The fact is that the United Kingdom is second only to the United States as a net debtor nation. Although the United Kingdom’s participation in the new bank has been presented as just another instance of the export of British “financial expertise,” a little noticed underlying fact is that the United Kingdom is close to national bankruptcy. How so? Because it has been running ever larger current account deficits. These recently were running at an astounding 6 percent of GDP, which means they have doubled since 2010 when Cameron took office.

It is a fair bet that without constant infusions of Chinese cash (mainly via purchases of British Treasury bonds), the British pound would be toast – certainly British finances are in far worse shape than they were even in the mid-1970s when, in a humiliating corrective for the British establishment, the International Monetary Fund was sent in to London to sort things out. Meanwhile, unlike the United States, the United Kingdom lacks the fallback position that it can borrow abroad in its own currency. A major difference compared to previous times is that the United Kingdom cannot go to the United States with a begging bowl because U.S. external finances are almost as bad as the U.K.’s.

For more on the United Kingdom’s trade click here and here.

(Republished from Forbes by permission of author or representative)
• Category: Economics • Tags: Britain, China 
Current Commenter

Leave a Reply - Comments on articles more than two weeks old will be judged much more strictly on quality and tone

 Remember My InformationWhy?
 Email Replies to my Comment
Submitted comments become the property of The Unz Review and may be republished elsewhere at the sole discretion of the latter
Subscribe to This Comment Thread via RSS Subscribe to All Eamonn Fingleton Comments via RSS
Are elite university admissions based on meritocracy and diversity as claimed?
The evidence is clear — but often ignored
What Was John McCain's True Wartime Record in Vietnam?
Hundreds of POWs may have been left to die in Vietnam, abandoned by their government—and our media.