Here's the real reason China has struggled to make meaningful advancements in the past several decades...
Read this article on our economic relationship with China.
1) We took advantage.
2) What goes around does come around.
3) Who was foolish enough to allow China to hold so much of our debt?? Seems like little Jess Thornton, completely untrained in the business of economics, can even tell this was a bad move.
2 comments:
Just wondering why you think it is a bad thing for China to have invested in US debt.
I think there are a couple of ways to look at how we got here. They may well reflect different philosophies.
1. The US and other developed countries took advantage of China and other third-world countries by moving manufacturing into places where wages were low and there were no labor or environmental protections. The reasons were primarily greed.
2. China (and Japan and South Korea previously) manipulated the currency markets and restricted imports to become the low-cost manufacturer. Their objective was to create a domestic manufacturing industry to provide jobs for their citizens. It was more important to the Chinese government to put people to work - and keep them off the streets - than to focus on safety or pollution. The Chinese essentially have tried to destroy manufacturing in other countries to ensure a place of power in the world.
I think reality is somewhere in the middle - but I do believe that the Chinese government knew and supported what has happened.
A political scientist would probably tell you that having China 'coupled' to the world economy is a very good thing. What we have seen over the last ten years or so is the beginnings of capitalism in he country. If you look at it from an economists view, would it be in China's self interest to damage the economy of the US? Or does the $1 trillion is US debt held by them, counterbalance any aggressive intentions? Plus, how many more million Chinese would be out of work if the US (and Europe) went into depression?
I think countries are more hesitant to take extreme actions if they believe every thing is interconnected.
But what about all this talk of China having the funds to "uncouple" themselves from the rest of the world? That's mostly what concerns me...what's to keep them from uncoupling themselves and letting the rest of us tank? Then, couldn't they take advantage, and rule us all?
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