On Thu, Sep 4, 2008 at 1:33 PM, Charlie <[EMAIL PROTECTED]> wrote: > More perversely, unlike the US whose economy is wracked by a large > budget deficit, China has a huge budget surplus, trillions of dollars. > And what do they do with this surplus? They buy tons of US government > bonds, essentially funding our budget deficit and subsidizing each and > every American so that Americans can keep consuming and buying Chinese > goods. > ... > But it's hard to understand why they don't take more of that trillion > dollar surplus and invest it in their people, especially in the rural > areas and the young people there. China has become "one nation, two > people" -- rich vs. poor, city vs. country.
This is a somewhat unfair criticism. Just because the Chinese government has a huge surplus and lots of money doesn't mean they can spend it freely. They are sure to run into bottlenecks and cause massive inflation - which already is a big problem because of all the export dollars the Central Bank needs to "sterilize" by printing local currency. A better option may be to allow renminbi appreciation and slow export growth which may allow them to spend more money within China. But export growth is more important to the Great Power ambitions of the government than helping the poor.. -raghu. -- "Really ?? What a coincidence, I'm shallow too!!" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
