NEW YORK (
) -- President Obama visits India and Indonesia on his way to the G-20 Summit in South Korea and an Economic Forum in Japan. Here's what you need to know:
This is an economic mission.
Obama will announce in India significant deals with American companies like GE and Boeing to strut his economic stuff. For once, America seems to be getting the better of a deal.
In advance of the G-20 summit, Obama wants to garner political support from all four countries for pressuring China to strengthen the yuan.
India and Indonesia are getting flooded with speculative hot flows; Japan has been directly hammered by China through its purchases of Japanese bonds; and South Korea maintains a stiff upper lip in the face of an over-valued won.
This is much more a strategic mission.
India, South Korea,and Japan (and to a much lesser extent, Indonesia) are the "countervailing power" countries the U.S. wants to woo and align itself with as it tries to contain China economically and militarily. This is a high-stakes strategy that risks Chinese ire.
Both India and Japan have ongoing territorial disputes with China -- India by land, Japan by sea. South Korea faces a China-backed North Korea. All countries are getting hammered by Chinese mercantilism, while also benefitting from the China trade flows. All are uneasy about the rise of China.
Selling sophisticated weapons to India, along with nuclear technology, is a crap shoot that ruffles Pakistani feathers and further destabilizes the region, but it pays for our trade deficit AND it sends China a message.
Any political gain from the trip has been successfully sabotaged by the $200 million a day attack -- politics never takes a holiday. The real payoff of the trip -- or failure -- will come at the G-20 summit when trade issues with China are addressed.
Peter Navarro is a business professor at the University of California-Irvine. He is the author of the path-breaking management book, "The Well-Timed Strategy," and the bestselling investment book, "If It's Raining in Brazil, Buy Starbucks." His unique and internationally recognized expertise lies in his "big picture" application of a highly sophisticated but easily accessible macroeconomic analysis of the business environment and financial markets for investors and corporate executives. Navarro's articles have appeared in a wide range of publications, from Business Week, the Los Angeles Times, The New York Times and The Wall Street Journal to the Harvard Business Review, the Sloan Management Review and the Journal of Business. Professor Navarro is a widely sought after public speaker. He has appeared frequently on Bloomberg TV and radio, CNN, CNBC, and NPR, as well as on all three major network news shows. His free weekly investment newsletter is published at