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pandabear
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13 Jan 2008, 9:52 pm

(to the USA, that is).

I received my income tax forms, and somewhere inside it explains that about 10 percent of our nation's federal budget comes from borrowing (and I think that the bulk of it comes from China).

That has all the looks of a massive foreign aid program.

The Chinese keep lending us money to keep our government afloat, even while our government cuts domestic interest rates, which not only minimizes returns on lending to our government, but also causes the exchange rate for US dollars to fall. Thus, loans from China wind up being more gifts than loans, or the Chinese would start to demand being paid back in a hard currency, such as the Euro.

On top of that, you would have a hard time finding anything to buy that wasn't manufactured in China. Fifteen years ago, you would often find articles of clothing that had been assembled in places like Bangla Desh or Honduras. Not any more, as far as I can tell.

And, even with our plummeting value of the US dollar, things made in China are getting better and cheaper all the time. Prices of oil and food (which China doesn't export) are going up, but computers and digital cameras (which come from China) are always coming down in price in the US market, as their quality gets phenomenally better.

The Chinese are absolutely keeping our government and economy from collapsing, preventing us from suffering from inflation, and providing us with quite a lot of things that we are just too lazy to produce for ourselves.

Plus, the Chinese don't interfere with our foreign policies in Iraq and Afghanistan.

On the one hand, Hip Hip Hooray! for China.

On the other hand, what could they possibly be up to?



benjimanbreeg
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13 Jan 2008, 9:54 pm

As long as they keep cooking such great food, i'm not worried :wink:



pandabear
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13 Jan 2008, 9:59 pm

That's true. I do enjoy their Mongolian barbecues. And their buffets.



benjimanbreeg
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13 Jan 2008, 10:28 pm

:P :P I feel hungry now!!



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13 Jan 2008, 10:41 pm

The US contributes to the booming Chinese economy. They are just looking out for their best interests.



Postperson
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13 Jan 2008, 10:48 pm

We'll all be ruined!



Mc_Jeff
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13 Jan 2008, 11:37 pm

If the economy of the US collapses, it will do very significant damage to China's, if it doesn't bring China's down with us. Frankly, the Chinese economy depends on American consumerism.



The_Q
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14 Jan 2008, 4:24 am

I don't think China likes the U.S. very much. They are simply playing a very clever game.

Mc_Jeff wrote:
If the economy of the US collapses, it will do very significant damage to China's, if it doesn't bring China's down with us. Frankly, the Chinese economy depends on American consumerism.


While I would agree that if (I believe it's probably more a case of when) the U.S. economy goes down the drain, China will certainly take a hit, I don't think it will collapse. The U.S. is not China's sole trading partner and I think they would simply adapt to the new circumstances. For the moment, it is probably in the Chinese government's head that it's in their best interest to support the U.S. They'll be wanting to take advantage of America's success until such a time that it's economy reaches the same level. China is surely aware that opposing the U.S. is not quite within their league just yet.


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Odin
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14 Jan 2008, 9:46 am

The Chinese rely on the US for a market to sell the stuff they make, thus the Chinese will try not to do anything that would threaten consumer spending in the US. This won't last forever, though; China's middle class, a middle class that can buy the consumer goods the country is making, is growing rapidly and so soon the US will become much less vital to the Chinese economy.


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pandabear
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14 Jan 2008, 4:28 pm

As the value of Chinese holdings of US dollars continues to fall, probably the only thing that Chinese will be able to do with them in the future will be to buy parts of America. For example, the USA bought Alaska from Russia when Katherine the Great needed some cash, and it wound up being very cheap (she obviously didn't know about the gold and oil). Perhaps at some point the Chinese will be interested in taking Alaska as a means of settling US debt.



richardbenson
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14 Jan 2008, 5:55 pm

its probably because almost all of our goods come from there, all you have to do is walk into a store pick up anything and more than likely it will say, "made in china".


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Anubis
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14 Jan 2008, 7:30 pm

Because Chinese people are very generous, and need the US as a market until they can open up more markets elsewhere.


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Mc_Jeff
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14 Jan 2008, 10:32 pm

Quote:
While I would agree that if (I believe it's probably more a case of when) the U.S. economy goes down the drain, China will certainly take a hit, I don't think it will collapse. The U.S. is not China's sole trading partner and I think they would simply adapt to the new circumstances. For the moment, it is probably in the Chinese government's head that it's in their best interest to support the U.S. They'll be wanting to take advantage of America's success until such a time that it's economy reaches the same level. China is surely aware that opposing the U.S. is not quite within their league just yet.


I didn't say it necessarily would collapse - rather, a collapse would be a worst/best case scenario depending on how you want to look at it.

My reasoning though, is that a significant part of the Chinese economy depends on jobs provided by American outsourcing. If some of these American producers go bankrupt and close, China is going to start seeing an increasing unemployment rate, causing a situation much like the gas prices here in America are right now.

Another possiblity of an economic collapse is our government finally getting around to putting limits on outsourcing in order to keep money within the country. This would also hurt the Chinese.

And yeah, I'm seriously worried about the state of the US economy.



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15 Jan 2008, 10:29 pm

They are nice to us because they are profiting on our economy to a massive extent not seen in decades, and as long as they can continue to export loads of s#!t to our country, they will ream the profits at the bank.


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pandabear
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18 Jan 2008, 9:15 pm

But, my point is that the Chinese seem not to be profiting--they are taking US dollars, which are falling in value. And, they are working so hard, basically for our benefit in the USA, so that we can enjoy their high-quality low-price merchandise (ignoring, for a moment, the lead paint, etc.). They are willing to do this rather than pursue a higher standard of living for themselves.



JohnnyCarcinogen
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18 Jan 2008, 10:33 pm

pandabear wrote:
But, my point is that the Chinese seem not to be profiting--they are taking US dollars, which are falling in value. And, they are working so hard, basically for our benefit in the USA, so that we can enjoy their high-quality low-price merchandise (ignoring, for a moment, the lead paint, etc.). They are willing to do this rather than pursue a higher standard of living for themselves.


It may not seem to be profitable on the surface, but when the Chinese investors start calling in their investments, you'll see an entirely different picture.
The entire nation, of course, is not investing in our national business - the workers are merely doing as much work possible to receive the most pay they can to take care of their families. The culture and society far differ from our own.


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