I will go a step further. China told KJI to threaten Japan.

I wrote the following at the beginning of this year (Jan 06).

http://koreanamerican431.blogspot.com/

”
NK has always been a satellite of China, ever since the fall of USSR. Hu can order KJI around and Hu is calling shots about (now debunked?) six-party talks. KJI is just a puppet.

Actually this year is very interesting time for China-Korea-Japan relationship. China, after using NK nukes as trading chips against Taiwan acquisition, may try using NK in a new venture.
KJI visited China this year with military generals. This is significant move. And, I am afraid that the purpose of visit was not economic change as many media have reported.

China may start using NK to attack Japan!

The following events may take place.
1) NK will be very belligerent toward Japan, attacking Japanese boats and even SHOOTING SOME MISSILES.
2) The US will be put into an awkward position. To defend Japan, the US may have to start a war against NK. However, this will not pass in the Congress. Koizumi’s Yasukuni visits will be a convenient excuse for the US not to commit troop. The US will just take the issue to the UN.
3) When NK attacks heighten and the Japanese require the US to live up to the mutual defense treaty, the US will reluctantly have to commit troops.
4) This is where the most intriguing events will follow. South Koreans will ask the US to leave the country! SK will join NK and China alliance.
China wants this consequence and may activate this scenario.

The US will pull out of Korea and just supply the Japanese Self-Defense Corps some missles to fight the war against NKs. As soon as the US pulls out of SK, NK ends hostilities against Japan, with China working as the peacemaker.

Five years later, the Unified Korea attacks Japan under China’s orders. The US is nowhere to be found.
“

That’s a bit of a stretch. Trade is just over 10% of the US economy. Most of it is with Europe and Uncle Sam’s immediate neighbors. Trade is a large component of China’s economy, and a huge component of South Korea’s economy. But the American economy is mostly self-sufficient. Cheap capital from abroad has served mainly to inflate US asset bubbles - first the telecom and internet bubble, and now the real estate bubble.

There is more than enough money available to fund the technological advances of the future. Note that semiconductor industry grew of age during the stagflation years. IBM and Apple developed the first personal computers during an era of mid-teen interest rates, during the early 80’s. A 15% Fed Funds rate (up from 5% today) reminiscent of that era would affect the US economy, but probably not much more than it did in the early 1980’s, when the computer and semiconductor industries were just specks on the US economic landscape.

At that point, the American consumer electronics, steel, auto and machine tool industries were being devastated by competition from Japan. American financial colossi like Citibank and AIG looked set to be plowed under by their hugely profitable Japanese counterparts. Peripheral industries that hadn’t learned to relocate production in low-cost East Asia were being slaughtered by their bottom-feeding cheap labor counterparts in South Korea, Taiwan, Hong Kong, Singapore and Malaysia.

Today, American companies like Boeing, Intel, Pfizer, IBM, Caterpillar, Cisco, Oracle and Microsoft are world leaders in most of the important industries. American financial institutions set the standard for profitability and risk management. Even tiny sole proprietorships have learned the art of outsourcing assembly work to cheaper countries while keeping design work at home - to China if cost is all-important, and to other East Asian countries if timeliness and quality are more important. Bottom line is that America Inc. is at the peak of its powers and open for business. Anyone who thinks that a disruption in trade with Korea and China is going to bring about a rerun of the Great Depression needs a doze of valium (another 80’s medication).

Instead of saying KDJ caused the “brinkminship potential” I should have been more specific and said it caused the opportunity for Pyeongyang to pursue brinkminship with nukes and missiles as chips. I understand too that there is no “one” cause but a myriad. Sunshine, however, I think played a big role in setting up the current situation.

So what it comes down to is that the willfull Walmartization of Chinese-American relations becomes directly related to Pyongyang’s continued existence. We buy cheap Chinese VCRs, and the Chinese use that money to prop up an evil regime in Pyongyang.

Kim Daejung’s Sunshine Policy did not create this problem, but Roh Moohyun is wasting many opportunities — particularly in the form of demanding some quid pro quo — wrought by warming Seoul-Pyongyang ties.

That’s purely a statement of (willful) judgement not one of verifiable reason. Nor will it have any value when the world, excluding korea and china, agrees that South Korea and China are responsible for placing Japan in this predicament. To take the argument further I never said KJI was responsible for this, I said South Korea (mostly) and China are responsible for this. They gave KJI the opportunity and the guts to threaten and provoke Japan. They are responsible for Japan being placed in a situtation of the need to further protect themselves. And Japan does have the right to protect themselves regardless of the diplomatic belligerance South Korea will protest with.

Regarding their holding of US debt, its not as though they can act in concert with one big cash-in and have it not effect the individual owners of the debt. As soon as one large holder of debt starts an attempt to cash-in, the value of the debt by other holders will start to decrease. China’s central bank, if it acted first, would in affect be devaluating South Korea’s holdings. South Korea would only hold their investment if they waited until other investors picked up the slack. If they got out it would be a major loss to them. Meanwhile, China’s “non-market related” move would create extra demand for US investment instruments which could be scooped up domestically or by the Japanese who are slowly coming back to a point where they can start investing again. They already hold around 650 billion and I doubt they would start selling.

Further, we have to always keep in mind that holders of government instruments cannot force a government to pay up prematurely on government instruments. Laws on national sovereignty restrict foreign governments from trying to force payment. A lawyer will be more specific than I in that regard but essentially that means China and South Korea (or the individual holders there would be more accurate) can’t force payment for instruments that are not at maturity.

I agree that the US debt is a growing problem but not relative to the debacle most other developed countries’ economies are in and not so, considering the growth the US market has seen parallel to this rise in debt. Any future actions governments may try to take in cashing in the debt they hold have nothing to do with debt already accrued, i.e. funding for the Iraq War. That is debt on the books, not specific to what is held by any one creditor or groups of creditors. You can see more specifics on who owes or is due what at:

ftp://ftp.publicdebt.treas.gov/opd/opdx122005.xls

I’m also wondering where you got the 700 billion number from. Chinese has roughly 330 billion in credit and they are the number two holder of US debt behind Japan. South Korean holdings are only around 70 billion. At 400 billion total that is right around one year’s deficit the way Congress is supposedly spending money these days.

Incidentally, last years deficit is now being calculated at over 100 billion less than estimates from the end of last year due to greater federal revenue from corporations and high income individuals. Funny how lower taxes can produce higher federal income…investment opportunity is a wonderful thing that only higher taxes can quench.

…it would be japan’s own choice. no one else is repsonsible, even KJI who provided one of the many excuses.
if japan want to do it and it can do it without consequence, it would do it any moment, with or without KJI’s help.

let’s list these ‘vital interests’ explicitly and discuss how vital they are? sea lanes? hostage?

remember if NK is going to attack anyone anywhere, it would be SK. in the whole course of its history, NK had not did anything to Japan.
(the hostages were for spying purposes, but they were not kidnapped by a missile)