Sino-US Trade War

US Treasury Secretary Tim Geithner accused China of currency manipulation.

What the US wants China to do is to take sides with it in the rebuilding of international financial and economic order and to ensure China's wider financial openness to the outside world. The emerging Asian economy is also expected to buy more treasury bonds to support the US economic revival.

The root issue of the China-US trade imbalance is due to the spending patterns in US (and UK) and China.Consumers in the United States are enjoying a virtual tsunami of inexpensive, high-quality manufactured goods coming from China, a nation that is now being called "the workshop of the world." Cheap labor and fast, flexible production combine to make Chinese manufacturers extremely competitive.

The U.S. and China are economically interdependent, but this mutual dependence is not sustainable.

President Barack Obama on Friday approved new tariffs on all car and light truck tires coming into the U.S. from China, a move Beijing condemned as protectionist and a violation of global trade rules.

China is alarmed by US Fed money printing to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy.
Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".

"The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow. That's why we have this financial crisis."
Yet the consequences are not symmetric.
"He who goes borrowing, goes sorrowing," said Mr Cheng.
It was a quote from US founding father Benjamin Franklin.
In retaliation to the latest episode,China’s commerce ministry announced Sunday that it would investigate “certain imported automotive products and certain imported chicken meat products originating from the United States” to determine if they were being subsidized or “dumped” below cost in the Chinese market. A finding of subsidies or dumping would allow China to impose tariffs on these imports.

Dow Jones candlestick 2nd week September.

Investors pulled money out of stocks after a five-day rally left the market at its highest levels in nearly a year.

Friday's candle pattern is above the bull pivot and still very safe but yet to complete previous day's candle pullback.

It is a norm,7 days before expiry of futures index a high setting needs to be set and vice-versa.