China and the Economic Crisis
I have written a paper that approaches this practice from a different angle, and recommends a different solution. The paper can be downloaded here http://ssrn.com/abstract=1332842
In this paper, I revisit the historic ideas surrounding miserliness and usury. I explain why these were economically pernicious activities, and why they were socially stigmatized or made illegal. The paper then moves onto international relations. I argue that China has been acting as miser and usurer on the world stage, at the expense of its own needs and global productivity. The world needs to balance spending vs. saving/investing/lending, and if there is too much of the latter then a rebalancing is inevitable. China has been doing too much of the latter, and the current economic crisis is that rebalancing.
The preferred solution to this problem is not trade protectionism, but rather increased trade. Over the past decade Americans have spent trillions of dollars on Chinese goods and services. This created employment in China and helped the country achieve its potential. The Chinese have responded by hoarding and lending that money. But a relationship where Americans spend and Chinese save and lend is not viable. Only when China takes the dollars Americans spend to employ Chinese, and uses it to employ Americans, will there be a sustainable relationship that can tap the productive potential of both countries. The United States has taken the first step and spent to establish this relationship. It is now China’s turn to spend, to advance that relationship.
I am interested in comments before the paper is published, so please do not hesitate to write me at the link above with any feedback.
Note: post title and content changed per the author’s request. -admin
There are currently no comments highlighted.