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The reality is that we are addicted. The Chinese economy is growing. Ours has stumbled.
What is the advantage to China for putting the screws to its best customer? I have been trying to figure that one out. Confucius vs Evil Emperor Ming?
China does not increase value to the Yuan because they already have a 10 percent domestic inflation rate.
Taiwan? I think only the old guard really cares. The younger generations don't recall what the beef was.
The advantage of China putting the screws into America? Right now almost none. They would risk crushing their own economy as well as the U.S. And where the U.S. economy goes, so does the world's economy. That would be like a nuclear war where everyone loses. Game over.
If China becomes the next economic power where much of the world trade goes through China instead of the U.S.? Different story.
Like any other massive weapon, it's usually thought of as a deterrent. Why do many countries want nuclear arms? Not to use, but to make it a HUGE bargaining chip in any sort of world political dealings.
The Chinese are indeed worried about runaway inflation, especially since their economic engine is burning a fiery red, but the fact that the yuan is artificially devalued still makes it easier for Americans to import more Chinese goods.
The U.S. and Taiwan do have a defense security agreement, which the U.S. promised to help Taiwan from any form of physical attack from Mainland China. Whether or not if it happens, or if the U.S. backs its promises to Taiwan in that event, remains to be seen.
Last edited by tenken627; 03-04-2008 at 01:36 PM..
Honestly, I don't know if China would ever do that to America. This is really all worst case scenarios AND a lot of IFs. But, it is something to keep in the back of the mind. As of right now, I do think China and America can be beneficial partners with a more even and balanced trade scenario.
Last edited by tenken627; 03-04-2008 at 01:57 PM..
Believe it or not, China is starting to manufacture some pretty nice stuff.
Just as W. Edwards Deming led Japan along to the economic promised land, China has both Japan and us to learn from.
They started making junk... Now, most of their goods are 'mildly sub-par but serviceable" type stuff.
In about 10 more years, their goods will be just as good as anyone elses, at 1/4 the price.
The combination of increased computerization of manufacturing processes and QC functions means that China is presently able to make a lot of things on par with any other nation. Unlike in years past, "quality" is becoming less and less of a skilled human function and more of an automated one.
Yeah, well they need to manufacture toys that are not recalled. It seems that everything they make gets recalled lately.
Filthy
I read several years ago that China makes something like 85% of ALL toys. The recalls we have seen are just a tiny fraction of what they are producing. AND THE WORLD IS BUYING.
I bet you didn't catch the baby formula that GERMANY sold to some Eastern Block country a few years back that didn't have (Iron? or some substance) that caused infant deaths. Let's face it, People just have it in for China. Germany and Japan have both been at war with the US and when they do something wrong, they get a pass. What is up with that?
The author's conclusion was that China had no immediate desire to dump its dollar assets, but that things could come to that unintentionally, through financial miscues, or misinterpreted signals from the US. Also, if it did come to that, China would seek to ramp up sales of its own stuff both into the domestic market, and all over continental Asia, from the Philippines to India to Indonesia to the mideast - many of which are growing consumer markets anyway.
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