Originally posted by plumranch
reply to post by desert
Besides, the US Navy heavily patrols around Tiawan to prevent any Chinese aggression. Right now China's navy is far too small to pose much of a threat to Tiawan. Navy's take a long time to build so that eventuality is a long way off.
True.
However China has been spending on and building up their military. Nobody should be fooled by nay Sayers who spout that China has no interests outside their borders. It's only a matter of time of "if and when" their interests abroad are threatened or in jeopardy.
The result of this good old boy, political allotment of loan system is that many loans are non productive and essentially defunct in real terms. A business may have a lot of money coming in but the money doesn't pay the bills. The Chinese try to hide it but the figure is 20 to 25% of GDP!
I think the large Chinese balance of payments is what is keeping China in positive territory for now. A lot of money in, little margin for error and a small downturn is what will bring them down.
Then several things can happen.
The US was honestly way overdue for an economic adjustment. They put it off for too long and this only added to the severity of this downturn. Recessions are cyclical. Every 8 to 12 years there is normally a healthy readjustment. This time however things were much worse.
As far as China's Mythical 8% growth. Too much of that has been artificially padded. This has opened the door to bubbles and potential issues in the next few years or sooner. {Massive Inflation} etc. What they are hoping for is the global economy to grow again so that they can offset what they have already spent and most likely will loose when the speculations end and off set it with real business growth when the US and West economies start to grow in earnest.
Because the US and West have spent relatively small amounts on Stimulus when compared to China, our economies will show solid growth all be it smaller and slower than previous recoveries. We will have reduced the {FLUFF} So when I see these charts comparing the US vs China's growth rate I take them with a grain of salt.
