the usa's debt dwarfs china's debt ..., page-19

hercules

The communists only won in 1949 because they were supplied with arms by the Russians, were completely ruthless just like the Russians in winning control of their country, and the nationalists failed to win the minds of the peasants. The Russians also flew against the Americans in the Korean war and supplied heaps of arms to both the North Koreans and China. China had massive losses of men during the Korean War, a level that was unacceptable to the US. I suspect you have a rather one-eyed view of China's government which is now basically akin to the Fascists government of 1930's Italy. Such governments ultimately overdo things and are destroyed.

A better model for China's future is Taiwan. Aggressive governments ultimately create coalitions that work against them, and India is rather unhappy with China building a naval base in the Indian Ocean.

I think you will see the US and Europe massively reducing their imports of Chinese products simply because the trade imbalance has no rational basis for its continuation. There is simply too much unemployment there and they need a manufacturing base to maintain their standard of living. China will then have to run down its reserves to continue buying commodities.

There are a number of commentators/economists that see China has currently having a major bubble and excess credit - for example google Andy Xie (a locally based economist) to read his view.

The real growth in China has come from its adaptation of western technology, and no doubt this will continue.

I just hope China continues to buy gold.

loki