| FORUM | ARCHIVE |                    | TOTAL QUIZ RESULT |


  New Posts New Posts RSS Feed - China and America
  FAQ FAQ  Forum Search   Events   Register Register  Login Login


Welcome stranger, click here to read about some of the great benefits of registering for a free account with us and joining us in our global online community.


China and America

 Post Reply Post Reply
Author
Captain Vancouver View Drop Down
Council Member
Council Member
Avatar

Joined: 29 Sep 2010
Location: Vancouver Isle
Status: Offline
Points: 2160
Post Options Post Options   Thanks (0) Thanks(0)   Quote Captain Vancouver Quote  Post ReplyReply Direct Link To This Post Topic: China and America
    Posted: 03 Oct 2010 at 02:11

The two most prominent economies in the world, those of China and the US, are tied together in a kind of co-dependant style, one that may not be very healthy.

 

It’s a little like two dancers, metaphorically speaking, locked together on the dance floor. The American partner, a little muddle-headed from previous excesses, is feeling a bit drained, and would just as soon sit down, and perhaps have a black coffee. The Chinese partner, on the other hand, is flushed with the heady drink of economic and military expansion. This side of the couple wants to cut some more capers, and keep the bar open late. Neither finds the other particularly attractive, but around they go for another turn, because they have an interlocking need.

 

In a way, the American philosophy of consumerism and unrestrained capitalism has come around to give them a solid bite on the rear end. Globalization has allowed companies to go offshore, to wherever cheaper production, or laxer regulations, can be found. Deregulation of the financial sector has caused polarization of income, and diversion of resources from long term investment to short term gain. The urge to consume through all of this, plus maintain a huge military for foreign adventures, not to mention pay as few taxes as possible, have been other factors in turning the US into a nation in deep debt.

 

The auction of treasury bills is now an essential part of raising money to pay the bills in the US. China is a major buyer, which is a double win for them. It is a method of keeping their currency low in value in relation to the US dollar, and in addition it gives a certain amount of leverage over US policy decisions. A not so subtle hint that China was going to start getting out of treasury bills could send the dollar down, and interest rates up. Paying even more on its enormous debt, due to higher interest rates, might prove the last straw for the US. Some of the other major buyers of T-bills are not in such great shape themselves, such as Japan and the UK, and are not likely to go on a T-bill shopping spree.

 

But does China really hold all the cards? They depend heavily on exports, for the time being at least, and need American consumers to keep buying the cheap clothes, electronics, and hello kitty dolls they are turning out. They don’t want the US economy to collapse. On the other hand, they are rapidly moving up the ladder to more complex products, and will eventually have their own middle class as a market. At that point, the US consumer may have far less value to them. And the Chinese have their own problems: simmering labor unrest, and an environment that has been trashed for the sake of quick industrialization to name just two. These or other issues could seriously impede their aspirations over the next few years.

 

Some commentators, like New York Times’ Paul Krugman, aren’t worried. He believes that there is an excess of capital in the world today, looking for a safe haven. If China reduced its position in US treasuries, others would gladly buy in, he has stated. And a lower US dollar would be helpful, as it would make US exports more competitive, he added.

 

I guess in economics, perception is important. If the US really did deviate far from the generally accepted path, with lets say, a Tea Party victory within the next few years, then many in the world may want to pull the plug on American investments.

 

What do forum members think? Is the US painting itself into an impossible financial corner? Is unrestrained capitalism going to be their downfall? Have they mortgaged their future? Perhaps Obama will find his voice, and move the US back to the political center, and initiate new green industries to rejuvenate the economy. Then again, a Republican/Tea Party victory may mean a new and more intense period of polarization and neo-fascist rage.

 

Or, is the rise of China somewhat overblown? Will they be checked by intrinsic problems like overpopulation, pollution, and an unwieldy authoritarian government? Or are they really on the ascendancy and the new power to be reckoned with?

Back to Top
Sponsored Links


Back to Top
fantasus View Drop Down
Arch Duke
Arch Duke
Avatar

Joined: 07 May 2009
Location: Denmark
Status: Offline
Points: 1943
Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 03 Oct 2010 at 11:48
 
Perhaps the strange thing is not that countries like China, but also, India, Brazil, and to some degree Russia or even Indonesia are on the way to become influential and great economic powers. What is strange they have been so relatively poor for some time. Their size, natural potential, raw materials, ferile soils and populations are comparable to most of Europe or the whole of it, or U.S.  rather than one single european country or countries like Japan. So in a way it seems more natural their economies should be big too?
Back to Top
Darius of Parsa View Drop Down
General
General
Avatar

Joined: 03 Oct 2007
Status: Offline
Points: 848
Post Options Post Options   Thanks (0) Thanks(0)   Quote Darius of Parsa Quote  Post ReplyReply Direct Link To This Post Posted: 04 Oct 2010 at 01:25
China will enjoy this period of economic greatness, but will loose its power quite quickly, probably within the next twenty-thirty years. With its economical boom, China will try to spread, far too quickly and the country itself will impolde, resulting in a period of chaos. This is typical of Chinese history and the dynastic cycle. After the period of chaos, China may resort to a isolation and a rebirth of Maoist principles, or China will be expolited by outside powers, such as Japan. The major problem with China is that it is broken internally, strifes between the Mandarins , and the
Cantonese. The Cantonese had been exposed a waterway by which they spread their influences, and exchanged with European markets. The Mandarin had largely been sealed off from this economic activity, and live in poverty as compared to the Cantonese. This major flaw will disallow China, as a whole, to spread its influence further than what is under their immediate control. Examples of this would include Tibet, and Mongolia, where the Chinese have had limited success in consolidating control, and competing with other countries for dominace in the region.
 
 
 
The United States will feel the loosening grip of China, and their economy will falter. Will this lead to their downfall? Most likely not, the Americans will find a new economic fix to the situation and continue on. In addition, the United States will choose a war in which to fight, stating it is for "freedom" or such to boost the economy. This is considering other nations do not act upon America's weaknesses after China's fall. An anti-American coalition might be founded. In fact, one could argue one has already been founded, and is today, admiting members. The United States will however, try everything in its power not to let this happen, and the key members will try everything they can to resist, the foundations of a future war, and perhaps a world war.
 
 
 


Edited by Darius of Parsa - 04 Oct 2010 at 01:25
"I am moved to pity, when I think of the brevity of human life, seeing that of all this host of men not one will still be alive in a hundred years time."

Emporer Xerxes I looking upon his army 480 BC
Back to Top
whalebreath View Drop Down
Shogun
Shogun
Avatar

Joined: 01 Jan 2009
Status: Offline
Points: 244
Post Options Post Options   Thanks (0) Thanks(0)   Quote whalebreath Quote  Post ReplyReply Direct Link To This Post Posted: 04 Oct 2010 at 03:58
Quote And the Chinese have their own problems: simmering labor unrest, and an environment that has been trashed for the sake of quick industrialization to name just two. These or other issues could seriously impede their aspirations over the next few years.


Neither of the problems as quoted mean anything to the Chinese Communist Party.


Edited by whalebreath - 04 Oct 2010 at 03:59
Back to Top
 Post Reply Post Reply
  Share Topic   

Forum Jump Forum Permissions View Drop Down

Forum Software by Web Wiz Forums® version 11.10
Copyright ©2001-2017 Web Wiz Ltd.

This page was generated in 0.078 seconds.