so...where's my economic sovereignity, if I let points 2 and 3 play?
You know the answer to that question far better than I do. Think Maastricht Treaty. To get into the EU, countries have to have had to align their interest rates, inflation rates, government spending, etc. IOW, you have to give up economic sovereignty in order to harmonize exchange rates.
Corollary: to achieve and keep #1, you either have to play 1 against 2, or get around the problem by other
means - like carrying a larg stick -.
I know how the Germans did it, once they decided to go this route in the 1930's -- they set up a government agency that had to approve the movement of foreign capital into or out of the country. When Hitler came in, he ordered that foreign capital and gold not be allowed to move out of the country.
This "worked" for the following reasons: 1) the Germans had got used to government interfering in the economy under WWI (rationalization) and the Weimar government, which was socialistic; 2) Hitler wanted Germany to be independent economically (autarky); 3) when they ran out of money, they stole it, first from rich Jews, later from other countries. Also, slave labor allows your goods to be competitive even without capital investment.
Jay understands China far better than we do, so maybe he can confirm that China has adopted #1, and how it works for China. My impression is that foreign capital does not move freely into or out of China. But this may be wrong. I remember at one point years ago thinking about buying Chinese stock, probably in that gorge project, and I think it can be freely bought and sold on the US stock exchange, but whether that is the same as moving freely into and out of China, I can't say. |
