Everybody knows the Chinese are about to inherit the earth. Their economy is now comparable to the USA. They have already cornered the market for low-end goods and they are rapidly moving up the scale. And they use the dollars they earn to buy T-bills and other US investments, in effect lending the money back to us so we can buy more from them.
Where will it end? Are any jobs safe in America? Obviously the US government can't ignore this.
And what's worse, from the point of the powers that be, is that they're going it alone. They allow only a small amount of foreign involvement and investment, enough to help them get up to speed faster, but not enough to give foreigners control of anything. The motive for this is not so much nationalism but rather the well-justified paranoia of the communist party / PLA that if they open up to foreign money and influence they will be out of power quickly.
If you put together the interests of the US government and people AND the multinational corporations, you get an incredibly powerful force. But what are they going to do about it? War would be disastrous. A trade embargo would be almost as bad, and the powers that be still wouldn't get to move into China, so that is not a preferred option. What's left?
Buy them out! Use the carrot and the stick, just like we've been doing so far. Threaten them with war and embargo if they don't play ball, but more importantly, tempt them with trillions they'll get if they open up to foreign investment.
This approach will not succeed as long as the Chinese economy keeps growing at 10% a year. They don't need us, and anyway the longer they hold out the higher the price they can get. But if there is an economic slowdown, then the balance shifts the other way. All of a sudden the natives are restless, and our trillions start looking pretty attractive.
But if they do truly open to foreign investment, and the party is deposed or fades away to figurehead status, that doesn't mean we the people have won. It means there will be a huge sucking sound as investment dollars drain out of the USA and other developed countries into China.
I guess what Slider's saying is that the US market will be propped up one way or another (by taxpayers money, if it can be arranged) until this transfer is complete and it's too late to do anything about it.
So what's a poor individual investor to do? Invest in China? Any better suggestions?
Fun-da-Mental |
