China needs to save the World

[Der-Lowe]

and save themselves.
In an era of global recession like the one we're in, the most important global players need to use their power and pull the world out through an increase in aggregate demand. This used to be easy when the biggest players where the same as the biggest creditor nations (ie, everybody owed them). They could simply "cash in" their loans, increasing demand, and problem solved.
As you all know, the world's most economically important nation, the US, is in not a comfortable position to do this. Whereas not as large as it used to be (7% of its GDP!) the balance of payment of the US is still shaky (3% deficit). Moreover, it hasn't had a fiscal surplus in a decade, which created a considerable yet not lethal amount of public debt. That means that the US government is not in a good position to reset the world's economy.

China, however, has been amassing T-bills for quite a while now. Its consumption/gdp ratio is abnormally low (35% while the US' is 70%, and the normal value is 60%).Fiscally speaking, its debt is among the lowest in the world (15% vs the US' 60%) and their budget is balanced.

Even if China didn't want to start spending all their money, there is not need for them to do so. A mere revaluation of their currency would have major economic impacts for the rest of the world.
The Chinese may ask: while helping others is nice, what's in it for us? Well, increasing consumption would mean increasing the living standards of hundreds of millions of Chinese. It means cheaper imports, and China is a major food importer. Far-sighted Chinese may argue: we're not going to fall into the trap the US already fell on: ignore the long run to enjoy the short run. Well, it's not ignoring the long run: China has already 2 trillion dollars worth of US securities. It will be the major loser in a possible US currency/debt crisis, a crisis that is much more likely to happen if China does not start reverting its trade situation with the US now and lifting the global economy off the ground.

[morefngdbs]

China has been pouring money into third world countries lately !
It has recently (this year) agreed to put 5 billion American dollars into Zimbabwe, to help develope their huge Platinum reserves. they spent over 10 billion US in other areas of Africa for the same reason...get rid of American Dollars & invest in real wealth like Gold & platinum & oil.
Unlike some Western Countries China has no problem ignoring dictator governments or human rights abuses...as long as they can get at the bottom line.
I read a couple of weeks back that China has inked a deal to help open up a delta in Venezuela oil feild. To the tune of 16 billion US or so...that isn't the only Latin American country they're investing in to get their hands on as much real weath as possible.
Also let us not forget China is leading the cry for a world currency to take the place of the US dollar. But while the International Monetary Fund has now got the power to print their own money ie; SDR's (special drawing rights) aka unbacked money ! ! !
No one has raised any concerns that an executive body without any country, or any type of election, is poised to become the central bank to the world.

Your not alarmed yet....I sure as hell am !

[LongLongCat]

1,300,000,000+ people. You know that's a lot of people. It's like US + 1 billion people. Tough job for them to feed themselves.

[HorseloverFrost]

At 10/20/09 03:10 AM, LongLongCat wrote: 1,300,000,000+ people. You know that's a lot of people. It's like US + 1 billion people. Tough job for them to feed themselves.

China currently produces enough food to feed not only itself but several other countries as well.

[jonnyrules935]

Maoism will save all our souls.

[VinnyXY]

China might soon one day become the world's sole superpower instead of the United States cause already the U.S. is declining.

[Ericho]

I think it's important that we acknowledge places like China and India. If we truly want to be unbiased, we need to accept that these countries have far greater populations than anyone else on Earth. We must take greater note of these countries, so we can learn from all of the people in them, as there are more than we can count.

[TheStonePilot]

Considering Chinas track record for hiding secrets from the public, oppressing it's citizens and generally not being a fun place at all, I'd rather not they 'save the world'.

[morefngdbs]

At 11/1/09 12:39 PM, TheStonePilot wrote: Considering Chinas track record for hiding secrets from the public, oppressing it's citizens and generally not being a fun place at all, I'd rather not they 'save the world'.

;;;
Consider objectively... the US governments stance on invading other countries, waging war, where ever it choses, Invading Iraq, which had nothing to do with 9/11, but it has a shit load of oil & a dictator they hated.
Then setting up its citizens with alarmist policy like " homeland security, which is against their constitution...but because of the 9/11 hysteria they slid that little piece of police state control right on into place. With barely a complaint.
Has it actually saved the US...I don't know, but I do know it didn't do S.F. A. to help those 13 dead soldiers or the 30 + wounded killed yesterday at that US Armed forces base in Texas.

[SmilezRoyale]

At 10/19/09 05:38 PM, Der-Lowe wrote: and save themselves.

Although i'm not particularly sure why China consuming it's own products would help the global economy, i think China would be stupid to continue it's current relationship with the united states. It seems to me that the only goods that the united states produces any more are Health, Education, and Government. Health and education are expenses, not things you want to have to be so large and it should be startling to anyone at the fact that these sectors have grown whilst the manufacturing sectors have continually been shrinking. As for the government sector i don't think i have to say much about it.

point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars. In my opinion the dollar right now should be next to worthless, and the Yuan should be much higher in value.

I can conceive that if China restructured it's economy to allow for more domestic consumption of it's products, it would probably experience the same kind of euphoria that America experienced in the 50's. All of the factories that were originally configured for war production turned to producing goods for domestic use.

[Warforger]

Global Recession? Its only a recession for America now nearly everyone else is fine.

[Der-Lowe]

At 11/7/09 10:39 PM, SmilezRoyale wrote:

At 10/19/09 05:38 PM, Der-Lowe wrote: and save themselves.

Although i'm not particularly sure why China consuming it's own products would help the global economy,

Because the products they consume themselves are to be replaced by foreign production. A more expensive yuan will also increase imports, increasing Chinese demand of foreign goods.

i think China would be stupid to continue it's current relationship with the united states. It seems to me that the only goods that the united states produces any more are Health, Education, and Government. Health and education are expenses, not things you want to have to be so large and it should be startling to anyone at the fact that these sectors have grown whilst the manufacturing sectors have continually been shrinking. As for the government sector i don't think i have to say much about it.

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing!

point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars.

Soy, every agricultural product known to man, basically any technological good known to man. Cars, basically any type of machinery, etc.

In my opinion the dollar right now should be next to worthless, and the Yuan should be much higher in value.

Well, that's precisely what I say. We agree :D

I can conceive that if China restructured it's economy to allow for more domestic consumption of it's products, it would probably experience the same kind of euphoria that America experienced in the 50's. All of the factories that were originally configured for war production turned to producing goods for domestic use.

Yeah, well, it would actually be the other way round. A higher yuan would shift demand outwards (which is why they would save the world), since foreign goods become cheaper. They'd export less, and import more, possibly moderating their growth rates. Their fiscal stimulus might compensate for the loss.

[morefngdbs]

At 11/7/09 10:39 PM, SmilezRoyale wrote: point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars. In my opinion the dollar right now should be next to worthless, and the Yuan should be much higher in value.

;;;
As long as the dollar is 'seen' to have value & no country like China, refuses to trade for it, it will survive.
BUT as for worthless, China is actively seeking to spend US dollars & is doing so by the billions, 5 + billion in Zimbabwe for a cut of the platinum production (second highest reserves in the world) over 10 billion last year & probably more this year for developement of gold, & oil resources in other African kingdoms.
A recent 15 billion + for developing a delta oil project in Venezeula, THey've got money invested in materials in other South American Countries as well...
Brazil is looking to them (china) for 10 billion dollars to develope this oil feild est. at 8 billion barrels. China is now Brazil's largest trading partner & Brazil is trying to get China to open is market's to Brazilian Meat & poultry, which it is presently shut out of...My argument would be , you want a crack at that oil, you pay in & you open your markets...China like most industrialized Nations is trying to secure oil reserves.
Do you not see what they're doing ?
They are devesting themselves of US dollars & using them to buy real wealth .
Once they reach a certain point they may then refuse US dollars, & the dollar will tank !

[SmilezRoyale]

At 11/8/09 02:40 AM, Der-Lowe wrote:

Although i'm not particularly sure why China consuming it's own products would help the global economy,

Because the products they consume themselves are to be replaced by foreign production. A more expensive yuan will also increase imports, increasing Chinese demand of foreign goods.

i think China would be stupid to continue it's current relationship with the united states. It seems to me that the only goods that the united states produces any more are Health, Education, and Government. Health and education are expenses, not things you want to have to be so large and it should be startling to anyone at the fact that these sectors have grown whilst the manufacturing sectors have continually been shrinking. As for the government sector i don't think i have to say much about it.

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing

The increased personal investment in health and education are not solely demand derived, the cost of healthcare and education have gone up, which is why people are spending more of their income on these things. Having young americans go deeper and deeper in to debt to pay for education which is all too often over-rated does not sound like a healthy trend.

And on the same token neither is

I'm not saying that developed countries aren't going to have more real resources (in absolute terms) dedicated to issues of health care, as compared to under developed nations. But idealistically a developed country should be capable of running it's health care system efficiently enough that people can afford to spend LESS not more, of their income on health services. The same applies to education.

For example, cosmetic and lasik surgery's have been getting increasingly advanced, and on the same token they have been getting increasingly cheaper. in developed countries Vane people can alter their faces with less of their income in relative terms even when the technology of those surgery's has improved.

point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars.

Soy, every agricultural product known to man, basically any technological good known to man. Cars, basically any type of machinery, etc.

But America's Manufacturing base is declining.

http://4.bp.blogspot.com/_GMkD4mFrFxw/Sn 92P-qjBDI/AAAAAAAAB7w/tHxChL2SZEM/s1600-
h/Annual+employment+growth+in+US.gif

I can conceive that if China restructured it's economy to allow for more domestic consumption of it's products, it would probably experience the same kind of euphoria that America experienced in the 50's. All of the factories that were originally configured for war production turned to producing goods for domestic use.

Yeah, well, it would actually be the other way round. A higher yuan would shift demand outwards (which is why they would save the world), since foreign goods become cheaper. They'd export less, and import more, possibly moderating their growth rates. Their fiscal stimulus might compensate for the loss.

I don't see the difference between what you said and what i said.

[hongkongexpress]

At 10/25/09 08:41 PM, HorseloverFrost wrote:

At 10/20/09 03:10 AM, LongLongCat wrote: 1,300,000,000+ people. You know that's a lot of people. It's like US + 1 billion people. Tough job for them to feed themselves.

China currently produces enough food to feed not only itself but several other countries as well.

>>> This would explain why on a school visit to their country last summer. I saw more sleeping bag mummies slowly dying in the streets to make the "Bumfights" homeless look like millionares.

It seems that the Workers revolution forgot about these people.

[morefngdbs]

I read today in the Gringo News (english language news out of Brazil) that Brazilian State owned petrolium giant Petrobras has accepted a 10 billion US dollar loan to be paid to them from 2009 to 2013 & is for financing its business planning.
Petrobras has agreed to give preference to Chinese goods & Services & part of the loan will be paid back with oil. The deal also gives China an agreed delivery of 150,000 barrels a day for the first year of specified delivery & 200,000 barrels a day for the rest of the agreement. this will be paid for at an undisclosed rate.

Like i said before ladies & gents... doing everything they can to get rid of toxic assets (aka paper dollars) & turn them into real wealth (aka commodities )

[puddinN64]

The U.S.A. and The People's Republic of China will have an armed conflict by 2020, I guarantee it.

[Der-Lowe]

At 11/8/09 05:06 PM, SmilezRoyale wrote:

At 11/8/09 02:40 AM, Der-Lowe wrote:

Although i'm not particularly sure why China consuming it's own products would help the global economy,

Because the products they consume themselves are to be replaced by foreign production. A more expensive yuan will also increase imports, increasing Chinese demand of foreign goods.

i think China would be stupid to continue it's current relationship with the united states. It seems to me that the only goods that the united states produces any more are Health, Education, and Government. Health and education are expenses, not things you want to have to be so large and it should be startling to anyone at the fact that these sectors have grown whilst the manufacturing sectors have continually been shrinking. As for the government sector i don't think i have to say much about it.

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing

The increased personal investment in health and education are not solely demand derived, the cost of healthcare and education have gone up, which is why people are spending more of their income on these things.

This is basically explained by saying that those goods are luxury goods, and that their supply curve has a positive slope.

Having young americans go deeper and deeper in to debt to pay for education which is all too often over-rated does not sound like a healthy trend.

And on the same token neither is

For example, cosmetic and lasik surgery's have been getting increasingly advanced, and on the same token they have been getting increasingly cheaper. in developed countries Vane people can alter their faces with less of their income in relative terms even when the technology of those surgery's has improved.

I don't think so, prices here are merely cheaper because surgeon's salaries are lower, and still very expensive in local salaries.

point is, China having all of these US dollars is worthless for them, since i cannot conceive of what they could possibly buy from us with those dollars.

Soy, every agricultural product known to man, basically any technological good known to man. Cars, basically any type of machinery, etc.

But America's Manufacturing base is declining.

http://4.bp.blogspot.com/_GMkD4mFrFxw/Sn 92P-qjBDI/AAAAAAAAB7w/tHxChL2SZEM/s1600-
h/Annual+employment+growth+in+US.gif

That link does not back up your statement.

Yeah, well, it would actually be the other way round. A higher yuan would shift demand outwards (which is why they would save the world), since foreign goods become cheaper. They'd export less, and import more, possibly moderating their growth rates. Their fiscal stimulus might compensate for the loss.

I don't see the difference between what you said and what i said.

you say it would lead to "euphoria", whereas the effect of a revaluation would be to cool the economy.

At 11/8/09 10:12 AM, morefngdbs wrote:

Those figures are negligible compared to the effect on their balance of payments a revaluation would cause.

And a "tanking" of the purchasing power of the dollar would be beneficial for the US, as noted above.

[Fynz]

I live in Australia, and Chinese companies are constantly spending money on our mines and resources out here, our economy pretty heavily fueled by them, which is probably the reason why we haven't had as much of a recession as you guys, i think our $ is almost up to yours?

[Warforger]

Thats not much of an achievement, the Bulgarian leva is almost as valuable as the US dollar and Bulgaria is a 2nd world country.

At 11/14/09 08:53 AM, puddinN64 wrote: The U.S.A. and The People's Republic of China will have an armed conflict by 2020, I guarantee it.

I highly doubt that.

[Al6200]

At 11/8/09 02:40 AM, Der-Lowe wrote:

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing!

I agree with your overall message, however I do not agree with this particular statement. The value of spending money on education is vastly overrated and spending money on advanced healthcare is valuable for intrinsic reasons.

[Der-Lowe]

At 11/15/09 01:16 AM, Al6200 wrote:

At 11/8/09 02:40 AM, Der-Lowe wrote:

Yeah, because the secret to development is underfunded educational and health systems.
Look how well Ghana is doing!

I agree with your overall message, however I do not agree with this particular statement. The value of spending money on education is vastly overrated

Elaborate. I find this statement quite weak, since if you see at any process of economic development, education has played a major role, if not the most important one.

[morefngdbs]

At 11/16/09 11:22 AM, Der-Lowe wrote:

At 11/15/09 01:16 AM, Al6200 wrote: I agree with your overall message, however I do not agree with this particular statement. The value of spending money on education is vastly overrated

Elaborate. I find this statement quite weak, since if you see at any process of economic development, education has played a major role, if not the most important one.

;;;
There's a small town in Nova Scotia called Wolfville. It is home to Acadia University, in this town you'll find coffee shops with workers with multiple degrees. Waitresses in resturants in the same boat. I work with a guy with several university degrees, he's a rigger... Why you ask, unless he wants to leave Canada he can't get a job !
My brother has a Ba. a Ma. degrees in History, English he's got a doctorate in one of the Arts...I can't remember which one & he lives & works in South Korea ! He has tried for years to get a job in Canada, no bloody luck. We need educated people sure, but we need mechanics, riggers, crane operators, truck drivers, sailors, carpenters , plumbers ,roofers, medical secretaries, nurses & we need a hell of a lot of them.
Higher education doesn't help you get a job. IN YOUR FEILD.
That is one of the biggest problems IMO with higher education, you've spent years (in my brothers case over 8 years) getting all this education, a huge student debt load & you can't get work !
But I went to a nautical school for 3 months took a basic marine rigging course & have worked my way into a top position as a rigger in the entertainment feild.
Because there was & is a shortage of riggers, & at 28 to 35 dollars an hour, overtime after 8 hours , 12 hour minimum days...you don't have to have a PHD to figure out there's money to be made !

I believe that medical care & help for higher education is the right thing to do...BUT & no one tells you this in High school, there are sometimes better ways to make a living than spending 3 or more years in University. by the time you've spent 3 years in school , I've put a downpayment on a house & your still living with mom !
You still have to pay off student loans, & make up for lost time ,add to that the difficulties many University grads have in finding employment...
I'm not saying don't go for higher education, but don't close your mind off to other possibilities.