Thank you.. An excellent report. Sincere regards..
======= S1000+ ======= --- On Mon, 4/27/09, xi <[email protected]> wrote: From: xi <[email protected]> Subject: China-USA. One conflict less. To: "World-thread" <[email protected]> Date: Monday, April 27, 2009, 11:02 AM My comment: Since several years ago, two perspectives have clashed about the same issue the huge inbalance of foreign trade between USA and China. USA has shared this issue with many other economies, but reaction in USA and in those other countries were different. Some Americans have told along some years that US corporations "outsourced" jobs, that sold low quality cheap goods, etc. even that China has forced USA to borrow. And finally that China´s authorities manipulate the yuan to push exports. On the other hand, some Chinese have told along years that we work hard to produce cheap goods to let Westerners keep their standard of life, that we pollute our land for them to enjoy cleaner air, and finally that must use our profits to fund a standard of life that they cannot afford. The new China´s policy, to promote domestic consumption, if successful, means that both the American way of life and the Chinese way of life would change. More and more data suggest that it is being succesful. Therefore, we have to analyse the consequences much deeper for both China and USA. And better, for Americans and for Chinese. In macroeconomic terms it means that foreign surplus might decline till complete balance or very little surplus (hopefully) as the governor of the PBoC told (1). From the American side it means that its deficit (just with China, yet not necesarilly with the rest of the world in first steps) would fall to near zero. For Chinese, it means that our standard of life will raise even faster than in past decades. In particular very probably for rural economies if geography diversification is succesfull as it seems that it will be. For US economy, it means that its economic structure has to change. As no other economy will be able to fund its debt (foreing debt, not just Federal debt) any longer, all imports have to be paid through exports. Yes or yes, US economy has to find which goods and services can be produced in USA and wanted abroad at a competitive price. The option is to let its standard of life fall exactly in the actual proportion, around 80%. Or in other words, the average US householder and their public sector would have to live with one fifth of their current budget. This fall of its standard of life could happen via inflation, via taxation, via unemployment or via lower wages across its economy or a mix of them. Does not matter the way to achieve it, at the end of the day the final picture is that USA as a whole would divide its domestic consumption, and more or less in the same rate all sort of expenses, by five. Maybe, it will be a middle point. US economy will raise or sustain its export while domestic consumption does not fall up to one fifth of the current level but up to one half or one third of it. This is the real and true crisis in US economy. Time scope counts. As policies are not changing too much, at the current pace of diversification, this final picture will happen in around five years. Peace and best wishes. Xi (1) China’s Current-Account Surplus May Shrink, Zhou Says http://www.bloomberg.com/apps/news?pid=20601087&sid=aJatiLRL5KW0&refer=home --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
