David Kreps Blog

Is china taking over global economy?

Is it possible that it may be to a growing extent the Chinese who are the ones lending large amounts of money to help the Western Central banks prop up our failing banking system?

See the US Treasury website, for example - http://www.ustreas.gov/tic/mfh.txt, showing Japan as the biggest foreign owner of US treasury bonds, on a declining scale, and China as the second biggest, rapidly catching up and very soon to overtake Japan. (We in the UK are a distant - but rapidly and massively growing - 3rd after these two giants, with the rest of the world trailing behind.)

See recent analysis for China of the current crisis - "In the first half of 2008 China’s GDP continued to grow at a double-digit rate (10.4%), despite a few severe natural disasters that hit many parts of the country really hard, including the snow­storms in south China in January and the Sichuan earthquake in May. Therefore, irrespective of the economic slowdown in the rest of the world, China is still likely to propel its own economic growth and trade at a rather ambitious pace. Thanks to limited exposure to US sub­prime mortgages, most Chinese commercial banks will not be critically impaired by the current crisis. " [pdf]

See the journalistic reports that China is indeed so economically strong that its large investments in the West can nonetheless be comfortably written off...

Maybe they waited till after the Olympics before they really started to squeeze...?
STOP PRESS - Will Hutton's comments are revealing and longer term. A relief?

08 10 08 - 22:58 - da5idk - default| one comment - § ¶