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Yeah, but the Chinese and US economy are tied to each other through that mechanism. It would not be good for China if the US falls.

The resources thing is really the only reason, why one country could benefit from the others gloom. But e.g. for building up a long term energy solution, cooperation would help everybody much more than confrontation. Here is the point, that even in the best possible scenario a confrontation could only give some more years of cheap oil consumption for the winner. A common enemy helps to bring different people together and this common enemy is time/energy shortage.
Peak oil is as much a chance as it is a risk.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Mon Apr 28th, 2008 at 07:05:05 PM EST
[ Parent ]
Yes, but the US economy is far from the only growth driver for China ... there is Europe and Japan as well as domestic growth ... and indeed, to the extent that China is simply financing the export of Chinese output to try to keep labor intensive producers afloat, that can be done by providing finance to LDC's to purchase Chinese products, with long term resource contracts from shaky governments certainly at a rough par with US Treasury securities ... a shaky command over something (material resources) certain to be of value against a reliable command over something (USD) of shaky value.

If imported inflation threatens to upset domestic growth, then sacrificing competitiveness in the US market may be the lesser of two evils, and China always reserves the power to reduce domestic inflation by increasing the weight of the Euro in its basket peg at the expense of the USD.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Apr 28th, 2008 at 07:17:25 PM EST
[ Parent ]