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The flaws of the EU's asymmetric approach to imbalances | 132 comments (132 topical, editorial, 0 hidden)
Re: Well done (4.00 / 3)
You don't accumulate wealth by running export surpluses. And you only accumulate power if the IOUs you accumulate are worth anything under the rules that apply at the time when you want to cash them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jul 19th, 2011 at 05:40:29 PM EST
[ Parent ]
Re: Well done (none / 0)
JakeS:
You don't accumulate wealth by running export surpluses

So what are the Chinese trying to do?

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jul 19th, 2011 at 06:11:33 PM EST
[ Parent ]
Re: Well done (4.00 / 3)
Maintain employment at home.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Tue Jul 19th, 2011 at 06:12:40 PM EST
[ Parent ]
Re: Well done (4.00 / 3)
Encourage the Americans to ship their industrial plant to China.

It's a bit late to get in on that game now.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jul 19th, 2011 at 06:48:45 PM EST
[ Parent ]
Re: Well done (none / 0)
Yes, but the shift in the relative balance of power between China and the USA has already happened.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jul 19th, 2011 at 06:51:15 PM EST
[ Parent ]
Re: Well done (none / 1)
Depends on how you look at it. The US still has the warships that keep the sea lanes to the colonies open. And it's still American soldiers that die to keep those colonies in a colonial relationship with the US/China bloc.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jul 19th, 2011 at 07:05:38 PM EST
[ Parent ]
Re: Well done (none / 0)
China is being more targeted in its external resource deployments - buying up oil and mineral rights in Africa and Latin America - it doesn't need to deploy its armies to maintain its foreign interests.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 20th, 2011 at 04:38:09 AM EST
[ Parent ]
Re: Well done (4.00 / 2)
It probably doesn't need armies, no. But it does need a navy to keep the sea lanes open. Having mineral concessions does you no good if every other ship you send to fetch your ores gets hijacked on the way back.

That's a real service that America provides, and one that China cannot rapidly replace (in part because building up the capacity to replace it would be viewed as an unfriendly act by pretty much everyone else on the planet).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jul 20th, 2011 at 06:23:04 AM EST
[ Parent ]
Re: Well done (4.00 / 8)
China is running an industrial policy to get industrial and technical know-how. This is done by keeping wages down to a level the US is unlikely to compete with. This then produces surplus.

Germany is running a societal policy to transfer power from middle-class to upper-class by means of keeping wages from following productivity, while keeping its industry. This is done largely by undermining social safety nets to make the unions demand less from fear of unemployment. This also creates surpluses.

The US has been running a societal policy to transfer power from middle-class to upper-class by means of keeping wages from following productivity, while keeping up middle class consumption. This has been done largely by crushing unions while stimulating bubbles. This creates deficits.

In a technological world, industry is also power, so loosing industry is loosing power. The US has tried to keep control over industry by means of pushing ownership rights to plants and rights. This was succesfull with smaller asian nations but looks largely like a failure with China.

My point here is that in all these cases, the main driver is domestic policies. But these domestic policies creates large foreign policy consequences.

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by A swedish kind of death on Wed Jul 20th, 2011 at 06:23:37 AM EST
[ Parent ]
Re: Well done (4.00 / 2)
So what are the Chinese trying to do?

Prevent a re-run of The Asian Debt Crisis® and keep US policy on some kind of leash through the potential threat to dump dollar reserves. The latter is probably better used as a threat than as an action.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 20th, 2011 at 09:05:54 AM EST
[ Parent ]

The flaws of the EU's asymmetric approach to imbalances | 132 comments (132 topical, 0 editorial, 0 hidden)
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