[quote=NewtoSanDiego]Listen Americans, my real name is Wang Fu
I am sick and tired of all you Americans blaming China for all your problems.
We are the ones buying a big percentage your US government debt. We are keeping the US government solvent. If it weren’t for China treasury purchases, your interest rates would be much higher and your recession deeper
We listened a few years back when you lectured us about transparency and accountability in financial institutions. It it like a wok calling a tea steamer black!!
We are the new superpower now! As you decline slowly into oblivion, we will be glad to continue purchases of your rope.
Wang Fu (aka NSD)[/quote]
Fu 先生,
This is a symbiotic relationship. China loans U.S. money to purchase stuff manufactured in Chinese factories. Now that half of Europe is bankrupt, who is going to buy the Chinese goods without the U.S.?
Cheap talk aside, Chinese government does not (nor do other exporting countries like Taiwan, Japan, Germany) want U.S. to burrow less right now. The long term solution is for Chinese to consume more (which requires higher wages, higher saving account interest rates, less subsidies to manufactures, and a floating Renminbi). This is the path to being a superpower. However, Chinse government is afraid that doing so will cause unemployment and politcal instability.
If you think U.S banks are doing poorly (and there is much more to come), wait until the non performing loans come due in China. Everything in China is bigger, more spectacular, the three gorges dam, the Olympics, and the coming crash.
China may well emerge from the global readjustment as the pre-eminant world power as U.S. did post WWII, but readjustment will be painful for everyone. I supect China will suffer more than the U.S.
Actually, while I pull for China due to my ethnic tribalism, if I’d have to bet my money I’d bet on India, which has a real democracy.
