ManufactureThis will be taking a few days off for the Fourth of July weekend.  But we want to wish everyone a Happy July 4th, and a great summer.

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The poet Charles Reznikoff once noted that what matters is “not the five feet of water to your chin, but the inch above the tip of your nose.”  Cheerful words indeed, but particularly poignant today for the residents of Qingdao, in China’s Shadong province.  Preparing to host the boating competitions of this summer’s Olympic Games, the city’s residents are currently working non-stop to clear a stunning algae bloom that has swallowed up large swaths of coastal water.

  Qingdao officials blame the algae bloom on “increased rainfall and warmer waters in the Yellow Sea.”  However, the Algae infestation now covers more than 5,000 square miles of the sea, according to the Xinhua News Agency.

Possibly the International Herald Tribune is closer to the mark when it notes that “many coastal Chinese cities dump untreated sewage into the sea. At the same time, rivers and tributaries emptying into coastal waters are often contaminated with high levels of nitrates from agricultural and industrial runoff. These nitrates contribute to the red tides of algae that often bloom along sections of China’s coastline.”

While China does have environmental laws on its books, they are seldom if ever enforced.  As a result, Chinese manufacturers frequently violate every accepted air and water discharge standard. 

Not having to incorporate environmental restrictions into their production saves money aplenty, but it also means tons of noxious smokestack emissions and the sort of groundwater runoff that produces unnaturally vast algae fields.

   In the next few weeks, AAM will be examining the consequences of Beijing’s environmental disregard with a report focusing on lax emissions standards for Chinese steel producers.  You can be sure ManufactureThis will have much to say when that report is issued.  But for now, here’s to a safe and healthy Olympic Games in the People’s Republic.

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  ManufactureThis’ friend, Sen. John McCain, is traveling to Bogota today to help promote a free-trade agreement with Colombia.  The senator has been vocal in his support for a deal with Colombia, which he believes will be a boon to the U.S. economy.

While the good Senator is flying south, ManufactureThis wants to suggest that bigger problems lay to the east.  Secretary of State Condoleeza Rice is currently in Beijing, where Premier Wen Jiabao has expressed significant concerns about the weak state of the U.S. dollar.  Premier Wen was quoted this morning by the Wall Street Journal as saying that the Chinese “hope the U.S. will quickly pass through the subprime crisis and stabilize the exchange rate of the U.S. dollar; this is of great importance to the world economy.”

Notwithstanding Sen. McCain’s passing interest in economics, it would seem that he’s currently talking to the wrong country.  Two-way trade with Colombia in 2007 added up to $18 billion, with the U.S. charging up a mere $876 million in trade debt.  By contrast, U.S.-China trade hit $386 BILLION, and most of that ($256 billion) racked up as increased U.S. debt. 

It’s because of the huge overall U.S. trade deficit that investors are losing confidence in the dollar.  Ironically, China has continued to manipulate its currency, in violation of the free market, to continue its huge trade advantage.

If Sen. McCain wants to steady the U.S. economy, he should consider a longer plane flight—one that will take him straight to Beijing, where he can firmly remind Premier Wen that Beijing’s currency finagling has been unraveling world markets for a number of years.

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