"The greatest construction boom in the history of the world. 70% of their GDP is construction, and they have created the money to do it."
They are using this credit for infrastructure. That is the difference. It is being re-invested into their economy to increase their standards of living and their productive capacity.
They are sitting on trillions of dollars in surpluses because we buy the stuff that they produce. They then spend this money to acquire strategic resources around the world and build their infrastructure.
China may have inflationary pressures but all they have to do is float their currency to avert this.
The Chinese produce alot of goods that you and I purchase.
The Western world on the other hand created money out of thin air to appease the consumer who had an appetite to buy things they could not afford.
This led to the consumer fueled Credit Boom. Credit was used for consumption it was not reinvested into the economy, like China is doing.
We built our growth on debt and it was not real growth because we squandered it on consuming things and buying property we couldn't afford.
China on the other hand is building stuff and investing that credit into its economy through construction of infrastructure.
Big difference.
Eventually if they keep booming like they are they will bust. But right now they are in a more powerful position than people give them credit for.
