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Mysterious East and more mysterious West: U.S.-China love affair, cont'd
Tuesday, January 25, 2011
snip
With Beijing rapidly approaching $3 trillion reserves, mostly in dollars, the understatement of the century is to label its economy ?uncharted territory.? Only so much American debt can be used to invest abroad.
Meanwhile, they lead to inflation, the destroyer of so many Chinese dynasties. It?s already hitting food, virtually most of the 1.3 billion Chinese only consumption, despite the Communist elite?s Gucci culture and a privileged coastal urban population.
The still-Communist half-hearted command economy subsidizes exports not only by manipulating currency but with exports built on high-cost imported components, rising labor costs and increasingly expensive energy imports. Infrastructure has been overbuilt, much of it unsustainable. The 2008 Olympic showplaces are virtually unused, a housing bubble matches the U.S., and many of Shanghai?s dramatic skyscrapers in Pudong?s financial center across the river remain, as they have been for a decade, empty. As regional and class disparities grow, social friction is rising.
Tuesday, January 25, 2011
snip
With Beijing rapidly approaching $3 trillion reserves, mostly in dollars, the understatement of the century is to label its economy ?uncharted territory.? Only so much American debt can be used to invest abroad.
Meanwhile, they lead to inflation, the destroyer of so many Chinese dynasties. It?s already hitting food, virtually most of the 1.3 billion Chinese only consumption, despite the Communist elite?s Gucci culture and a privileged coastal urban population.
The still-Communist half-hearted command economy subsidizes exports not only by manipulating currency but with exports built on high-cost imported components, rising labor costs and increasingly expensive energy imports. Infrastructure has been overbuilt, much of it unsustainable. The 2008 Olympic showplaces are virtually unused, a housing bubble matches the U.S., and many of Shanghai?s dramatic skyscrapers in Pudong?s financial center across the river remain, as they have been for a decade, empty. As regional and class disparities grow, social friction is rising.
