4 ms·
> They might, but it's really hard to tell (they're so opaque it makes detailed analysis impossible). This is actually one of the reasons why I think China is
by mahranch 11y ago
> They might, but it's really hard to tell (they're so opaque it makes detailed analysis impossible).
This is actually one of the reasons why I think China is going to be worse off. More uncertainty means less foreign money coming in which is a bit of a viscous circle. Economies can't grow at a specific rate forever. There will be ups and downs, sharp rises and bubbles. As much as China tries to mitigate them, the can't fight it forever.
Also, the government has total control of their monetary system. While helpful in times of economic uncertainty (they can keep propping it up, even beyond what the U.S can/will do), it shows that China's Yuan isn't ready to replace the dollar. No country is going to want to go all in on a currency where the nation could pull the rug out from under you at any time. They would be beholden to China, and give up more 'power' than they do with their competitor, the U.S. China also ranks 100th on the global corruption index (http://www.transparency.org/cpi2014/results http://www.transparency.org/cpi2014/results). There are 99 countries less corrupt than China.
It truly and really is like the U.S is a legitimate bank with rules and regulations while China is more like the Mafia's version of bank, where they make their own rules and have no regulations or checks & balances on themselves.
- jacquesm 11y agoThe world is connected beyond the point where it can function without China, the rest of the developed world is solidly hooked.
- wcummings 11y agoAre you saying China is too big to fail?
- jacquesm 11y agoNo, I'm saying that if China fails we will definitely feel that in ways we probably can not even imagine. China is big enough to fail without us being able to bail them out.
- curiousjorge 11y agoYes. Especially true for countries or cities reliant on Chinese money. One of which is South Korea with most of it's trade coming from China. An economic crash in China will have a big impact there. Also, we should see housing prices in west coast fall when the Chinese money exits quicker than it came. Vancouver in particular is kept afloat with Chinese money, that's going to turn out to be a bitter lesson,
- yongjik 11y agoI just checked and it seems 26% of South Korea's export (and 16% of import) is to/from China. That is pretty big, but not terribly bigger than many other countries. (For comparison, 8% of US's export and 20% of its import is to/from China.)
- jacquesm 11y agoIt's not just direct stuff and financials, there is a huge knock-on effect with suppliers to other suppliers. (Just about every consumer good from cars to phones to computers has bits and pieces in it sourced from China if they aren't made there whole).