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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (158349)	2/22/2005 10:48:14 AM
From: GST	Respond to of 281500

China has one dominant concern -- its own political stability. The stability requires an economy capable of absorbing the people being let go from the state enterprises -- most of which are bankrupt but on life support. The rate of urbanization is also dependent on the transition from state enterprises. So to keep the economy humming, they need to export and by this means they rack up the trade surpluses that bring in the US dollars. They are in no hurry to change this pattern, but of course they know that in time the pattern will indeed change. They will gradually let the RMB float up and they will accept a certain amount of asset depreciation of their dollar reserves. In time, the dollar will become worthless. But for now, the Chinese are happy to help us throw away our future while they build theirs.