By Fareed Zakaria, CNN
What struck me this past week was China's reaction to our credit downgrade. Its state-run media thundered that America needed to "cure its addiction" to debt.
A Hong Kong newspaper widely read on the mainland ran a front page with a banner saying "The American Dream is Over." It went on to report that Washington owes every single Chinese citizen 5,700 Yuan - about 900 U.S. dollars.
Another editorial said Washington's solution to its debt time bomb was to make the fuse one inch longer.
That kind of commentary has hit a nerve with the Chinese people. After a drop in Shanghai's stock market, bloggers took to local social media sites. One wrote: "The U.S. suffered a downgrade, why did we become the biggest victim?" Another said: "It was a huge mistake to buy U.S. bonds with Chinese taxpayer money. We must hold those who are involved responsible."
Here in the U.S. you hear many people worry that the Chinese government might stop buying American T-Bills. I think these fears are vastly overblown.
The economic situation between China and the U.S. is the financial version of mutually assured destruction - that cold war doctrine of nuclear deterrence. If you destroy me, I will destroy you.
Let me explain. I'll start with the facts. China is indeed America's biggest foreign lender - it owns about 1.2 trillion dollars of debt - more than Japan, the UK and Brazil.
A little-known fact is that most of America's debt - 14.3 trillion and counting - is owned by Americans in Social Security trusts, pension funds, and by the Federal Reserve.
But it is the marginal buyer that matters, so China is important. Imagine that China were to sell off those 1.2 trillion dollars of U.S. Treasury bonds. This is a huge hypothetical - but let's play out the disastrous chain of events that would happen if China began to divest.
It would trigger panic selling of the dollar. That would in turn hurt the U.S. economy, which is China's number one export market (not a good idea if you are the Beijing government trying to keep workers occupied in factories across China).
China is addicted to a strategy of export-led growth, which requires that it keep its goods cheap. This means keeping its currency undervalued. That's why it buys dollars.
But could China stop or slow down its new purchases of American debt? Yes, but even here, it has fewer options than people think. As China's export growth continues, it will keep adding to its foreign reserves of 3.2 trillion dollars. Where can it park that money? Does it want to invest in Japanese debt and make the Yen a reserve currency? Anyone who understands the deep animosity between China and Japan will see that this is unlikely.
Euro-denominated assets are a possibility - but there's really no such thing as European Treasury bonds. And even then, do you really want to put all your eggs in the euro when the future of the currency looks more shaky than ever before? Can you be confident that it will even be around 15 years from now?
As for British pounds and Swiss francs, you can buy those but just not in the vast quantities that China needs given the cash it generates.
And of course, if China were to stop buying Treasuries, the value of the Yuan would rise, Chinese exports would become more expensive and employment in China would fall.
So at the very moment China's bloggers and state-run media were blasting the U.S. government for its profligacy, guess what Beijing was doing?
It was buying U.S. Treasuries.
The reality is that China is trapped into a cycle of buying our T-bonds. No matter what any ratings agency says, no other bond market is as big or as safe.
So ignore all those theories about China doing America a huge favor. The reality is, they have nowhere else to go. We're probably doing them a favor.
And by the way, in terms of who is paying whom, data from the Congressional Budget Office shows that the U.S. pays out some 74 million dollars to China in interest payments on debt every day. We did the math. That means Washington is paying Beijing 833 dollars every second.
For more of my thoughts through the week, I invite you to follow me on Facebook and Twitter and to bookmark the Global Public Square.
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No, China isn't the one trapped, there are better investments than T bonds which are unlikely to be paid back such as gold, silver, oil and other various natural resources. However the US is trapped witth a growing debt, this article only blinds Americans to think that they're secure when they're not.
&&& Author, why are you back on the China vs US topic again? The whole us vs them thing, other than the debt crisis...stil, there's the election coming up.......oh well, at least you're not as dillusional as the author that wrote What Will Bieoner whatever his name is will find in China.
You're suggesting investments in silver? Do you even watch commodities? Silver's wildly variant, a young man's game if you will. It is not the place a government looks for low yield, secure returns when they are investing heavily to help keep the U.S. dollar out of their system to keep the yuan stable and undervalued. Purely ridiculous statement from someone who clearly knows very little about commodities trading, responsible fiscal policy, and currency "stabilization" methods.
Exactly what I was thinking. Well said.
Response to original poster: China is trapped and the author is absolutely spot on. The person holding the debt is always at a disadvantage. It goes with all things, your mortgage holder your unsecured credit holder(s) and so on. This works the same way on the international level. The person or nation holding the debt can simply not pay. Look what Mexico did in the 90's. They basically said we cant and are unable to pay. So what did its debtors do? They took it in the shorts, mainly the good old US of A. That would happen with China if the US said well we are not going to pay. China does not have any really good options on collecting its debt. They cant come on reposes anything. So they have to are stuck just as the author clearly pointed out.
To Brian – China has hundreds of thousands of rockets and an Aircraft Carrier. They also have a sizable military foot on the ground force. China has 2.2 million on active duty compared to the USA's 1.5 million active duty. And they have 800,000 reserves compared to our 1.5 million reserves. They could pose a military thread to the USA if we decided not to pay them. They are also full members of the UN just like we are so they could move with their allies (mainly Russia) to impose sanctions on the USA due to our debt problems. They are not trapped as the author suggests, but their options are limited.
Not really. China could buy Gold, Silver, Platinum, Copper, Steel, Coal, Uranium, ships, airplanes, etc. I can also buy heavy machinary and make road construction a major job for its citizens, thus reduce unemployment...There are many options. The author simply repeats the old propagranda...
@Destruk
China's Military has the numbers, but very little experience, especially when it comes to naval and air... They also import the majority of their gear from the US, Russia, and its allies. this is a well know fact. America would destroy China in a head to head war, China knows this, America knows this. The global repercussions would be dramatic and terrible, and no one has ever gone to war over debt. The only country that could hypothetically "take us out" in a one on one war is still Russia.
Destruk
You obviously know little about the chinese military machine.
Sure they have an aircraft carrier that is just going into sea trials.
Unfortunately for the Chinese navy, this ship is already two decades old, does not have the ability to land planes, and has no pilots who have ever landed on a carrier.
Secondly, the Chinese may have numbers, but numbers mean little when you match up against a well trained and well armed force that has been fighting for the last decade.
China and Russia combined couldn't put one foot on American soil no matter how hard they tried. The US navy is the strongest force in the world and would sink all the millions of troops you think china would throw at us.
Until china develops it's navy, they pose no threat to the US or it's allies. Should they attempt to attack Taiwan the us backed Island would make the invasion so painful it would take years for the Chinese military to recover from the trip across the straits.
Please, in a non-nuclear confrontation the 7th fleet could probably single-handedly blockade China and defeat their Navy and Air Force. There's no way they'd go to war over debt. It would be them signing their own death warrant.
I have to agree with That's Not True Either; taking the massive amounts of currency that currently earn China acceptable yields in US treasuries, and transferring it all into commodities, would not work. China already plows a lot of its resources into commodities around the world. They are probably buying another mine in Africa as I write, and Australia makes a killing off of them. Maybe I'm wrong, but it seems that it's simply too much money to be going into those markets. It would be a tsunami that over inflates those markets. And that may very well cause industrial production costs to rise dramatically. It seems like that idea would damage economies.
"Destruk
They are also full members of the UN just like we are so they could move with their allies (mainly Russia) to impose sanctions on the USA due to our debt problems."
Are you dumb? You understand that for the U.N. to impose sanctions on the U.S. America would have to let them right? Wait no you dont because you dont know anything about which you speak but heres a little fyi for you America has veto power in the U.N. so nothing can be passed with out America saying ok 2 it.
Also guess what china isnt part of? Nato which doesnt need permisson from China or Russia for sanctions.
Dang, i forgot to add what so many others have pointed out. When's the last time China was involved in a war? Any war? Even UN peace keeping missions? Besides murdering Tibetan monks or Uiyghur civilians of course. The last one I can think of is Korea, even if it was more recent, I very much doubt any Chinese infantry troops have any real combat experience. The war in Afghanistan alone has gone on for almost 10 years, not to mention the near constant deployment American troops have had over the past 50 years: Vietnam, Laos, Cambodia, Phillippines, Lebanon, pretty much all of South and Central America, Iraq, Bosnia, Somalia, Haiti, and "advisors" almost every where else.
An ounce of silver is an ounce of silver, fiat valuation is meaningless!
To the person saying china would crush us in a war... What are you smoking? China is so under trained compared to the us. Not to mention, we would see them coming from quite a ways. IF, and its the biggest IF ever, China would to invade us due to debts, it would cause WW3, no questions asked.
@ Destruk
The idea of China going to war with the US is absurd. First, people keep talking about their new carrier, which isn't new at all. They purchased an unfinished rust bucket carrier that the soviets abandoned and have spent the last 20-30 years trying to fix it up. And they have fixed it up really well, so they have ONE. The US has ELEVEN carriers in their fleet. And if you want to talk about airpower, they have a prototype stealth fighter. We have tons of F-22s and they are well past the prototype stage. We will be working on the next gen within the next decade. China has come a long way in the last 20-30 years, but they are still decades away from being on the same level, technology wise, as the US. But the biggest reason is even if the US stopped paying and China was thinking about war, you have the same problem the same problem the soviets had. You destroy the world. No one wins.
Also I would like 2 point out that the Falcon Hypersonic Technology Vehicle 2 is a unmanned aircraft the fastest one ever built it can be ANYWHERE in the world in under a hour it was designed to fly at 20 times the speed of sound.
You know what that really is? the fastest ICBM ever made before another country would even know to fire back we would of already hit them.
Also look at the size of our navy, NOT active navy im saying full out navy. We have ghost fleets bigger then most countrys active fleets which not alot of people really know about..
If Jimmy Rogers is correct, commodity will continue moving up in the next 10-20 years. So buying commodity today may appear to be risky but may be less risky than owning US debt.
@ Seriously?
China never murdered Tibetan monks or Uiyghur civilians.
This isn't the age of one country winning a battle. those days are long gone. this is the age of "The Next World War Will Destroy Most Humans"
do you know how much credibility we would lose if we can't pay our debts? think about it. we would go from a superpower to a complete joke.
China's military compared to the US is like comparing a matured industry to a growing one. However, in limited excursions in China's expanding sphere of influence, the US has failed in its strategic aims. In Korea, a fledgling PLA armed with only 19th century bolt-action rifles halted the heavily armed and trained Americans at the 38. In Vietnam, China provided most of the war supplies and provided over 400,000 in infantry, result: America retreated. As long as it's a war at a limited tactical level, US and China are about even
It is a complete waste of time and anxiety to think that China would ever want to get into a war with the USA. The US is a world super power and there is literally no one who can compete on that level. Moreover, China and the USA have had a mutually beneficial relationship that has resulted into one of the largest trade partnerships in the world.
The US media made such a huge fear mongering stink about some old re-furnished aircraft carrier that would never be able to compete with the US military. Google what other countries have aircraft carriers and whether there was ever any mention of these countries launching these ships. Some of these countries are in less stable parts of the world.
China's launching of this aircraft carrier is more to exert an image of a rising country that can defend it's interested around it's own territory. It's stupid to think the Chinese have any interest in ever attacking the US. China has never been colonial in it's history.
Instead of wasting time concerned about the "threat" of China, we should be worried about how we are going to educate our workers and children, and improve out education system so that we can compete globally. Tariffs and banning Chinese products are not a realistic strategy. Zakaria is pretty one dimensional and is acting like nothing more than CNN's version of Glenn Beck. Scare the crap out of everyone that the Chinese are coming when it's internal problems that have to be addressed if we are to improve the living standards of our children's future.
What everyone fails to realize is the fact that the Chinese have already landed. With the FTZ's and the ability to bring in unlimited amounts of MEN and CONTAINERS, they don't need to storm the beaches and get past our navy.
Besides, the same "Chosen" people control both China AND the USA, so this is all one big game they are playing, with the clear intent of leading us into yet another Jew war.
China, coming to a neighborhood near you...
the "that's not true:[" guy is a Chinese propagandist. They always come on here and try to spin things their way, AND pretend to be American or otherwise neutral to the discussion. The article laid out the facts.
Anyone with a brain knows that China doesn't do anyone favors. In fact, with their currency manipulation they are deliberately screwing over the rest of the world to catch up. Because they are too lazy to get there on their own.
While they may not have the means or wherewithall to oppose the U.S. militarily, you neglected to mention the possibilities through chemical warfare. China is the biggest exporter of goods to the United States and as such, you must take into consideration the posibility of the plastics used for baby toys, childrens toys, animal toys, pet foods, etc. I promise you, if China was going to pursue retaliation for inability to pay back the debt in a timely manner, we needn't be concerned about nuclear warfare, we need to pay attention to the imports in which we buy on a daily basis.
@Scott-Hey, leave your skinhead dogma in your grandmother's basement, you racist tard.
Hi There. Only one way for America and China out of this and it is for Americans (And for that matter Europeans) to get off their backsides and restart productions and selling stuff and services to the Chinese. If not unemployment will continue to rise and the ressession will continue. A one way street will not work in the long run. Surely America is still the leader in many aspects. Use it or loose it.
@Destruk: Yeah, ifj you want to consider destruction and death an option...sheesh.
Yeh... i live in Poland... there was a time (long before WWII) when we lost our independance for 123 years... you know how? not becouse we lost a battle or war... but becouse we had a huge crisis in our country, we couldn't summon and eqiup our armies. As for now – your army is the best... but soon YOU WILL HAVE NO MONEY TO MANTAIN YOUR ARMY BECOUSE OF YOUR DEBT! Deal with that and do something! dont pretend evrything is still OK when your rating is droping down, and will drop down again if you wont reduce your debt. 20 years from now and US will fall if you will keep saying 'yeh we owe china trilions of dollars but so what they cant do anything'. America! Plz do something with your debt! i dont want chineese global domination!
What you guys fail to realize is that China could very well indeed attack the usa and conquer us easily by dumping 100 million naked Chinese women on our shores....up to our necks in illegals we would surrender without any level of resistance ..
If you owe the bank $100,000, the bank owns you. If you owe the bank $1,000,000,000, you own the bank.
I am amused by the military talk, China simply doesnt have the capabilities to attack the U.S. Under lack of blue water navy in the dictionary, it says see China. That aside this whole situation is a bloody mess and has no clear cut solution. If the U.S congress continues to get nothing done then we're not going to be able to pay off any debt and our economy will collapse which will in turn drag China with it since they will lose a massive amount of exports. However, this crisis will end, not for a long time perhaps, but it will end and we just need to weather the storm as best we can and try to blunt the worst of, depending on if the government can do that of course.
No one will win in a war, so lets not wasting time talking about it. On a global market economy, everyone is inter-dependent. Complaining or not, they will work it out.
Commodities don't have the liquidity of bonds. They really aren't that good an option for China's purposes. As usual Zakaria has hit the nail square on the head.
Fareed is probably the best investigative journalist on the air right now. Hands down. He deals in facts and doesn't spin stories. He is a breath of fresh air, while other are full of hot air.
you clearly don't read a lot, or engage in critical thinking
David, You obviously have not watched scrap steel, copper and other metal prices as well as their primary sources. China is using their treasuries to purchase them and they are in enough of a rush that prices are record high. They have already got the low hanging fruit and are reaching much higher now.
Perhaps you haven't had a thief stealing your metals but I have. When they are gone and the prices are double or 10X, then you may relalise that the US capacity (reserves) are severely depleated. Not only will we NOT have the production, we will NOT have reserves of steel or the ability to even get the base metals, China will have purchased the sources.
In my community J(e)ws control the scrap markets. This local person is greedy and has a reputation for taking in stolen property. I found 1/2 of my stolen stuff there, the rest had been "processed" he said His business is growing rapidly taking scrap and sellling it to China. And he has $200K motorhome, new trucks, purchasing buildings for the scrap steeel, new this and that (all high price) in a storage building that I pass every day. I cringe when I see the "Christian and Jaw Alliance" showing pictures of poor Jaws and asking for donations to help them.
About two weeks ago I tried to buy electrical scrap from a a building being destroyed by his business. I offered about 4X the steel scrap but that was not enough, he wanted 10X. Every time I drive by his storage building and the door is open, I think what a greedy basterd he is. China is making him rich and law enforcement does nothing to stop him from fencing stolen property. He has a "friend" in the Prosecutor and Judge.
I'm for masssive TAX on exports of scrap metals, especially copper and stainless. Stop this bleading of metals because when it's gone...IT"S GONE and we clearly cannot be secure if we have depleated our metal stocks. Tax the Hel out of scrap leaving the US, and do it TODAY!
Actually if you were knowledgeable of the world. You would know about 'supply and demand'. Countries rarely sell off their precious metal reserves. Just look towards greece for an example of this, they are in the midst of an economical collapse and still they have yet to sell off their gold reserves. So there is no way for China to stockpile those precious metals and is far more efficent to just buy tbills.
Netro, You have obviously not watched scrap metals, steel, copper, stainless, etc. China is purchasing them and we are depleating our reserves. Economies operate more on these metals than gold or silver. They are purchasing both scrap and the mines at record levels. In the things we use every day, there is little if any gold or silver but there certainly is steel, copper and nichel (in stainless steel). They don't want our gold, they want the metals we use in our daily lives and for military. Every car and a lot of buildings have steel, every house and electric utility use copper and every restaurant has stainless steel food prep areas (not to mention the food and drug product companies).
TAX exports of these metals befor the local thief sells them to the scrap dealer, who is getting rich selling them to China. DO IT TODAY.
As a side note, multiply out about 8,500 tons of gold in our reserves bringing it to ounces. Then multiply that times $2,000 (rounding up the current price). It's am amazingly small number, compared to our debt.
l thought it was a good show, he had some interesting panel that commented on some key questions.
If you ask me, l think it's a good way start a debate. if it is true that "Washington owes every single Chinese citizen 5,700 Yuan – about 900 U.S. dollars." we need to find a way to pay back what we owe and fix this debt crisis that you calling it. after all this show is called GPS. We created this mess and l am confident we can fix it.
Great job Fareed Zakaria. you can count on me to buy your products..
That'snotTrue: what will be your solution to fixing this crisis?
It's a love-hate relationship. The Chinese and the Americans have to grin and bear it, whether they like it or not!
Gold is a bubble that will explode, not pop. Not a wise long-term investment.
Not a wise long-term investment?? have you gone goofy? sept 2001 gold was $255 an ounce and has gone up ten yours straight to now nearly $1800 an ounce?? try http://www.kitco.com to watch gold and silver for the last ten years. I deal in rare coins and precious metals and just bought a new porsche and going to buy a lambo when it comes in, in 2 months. Invest in the greenbacks and tell me in 2 years how you are doing. lol
@TakeNoPrisoners: Lots of things have exploded in value over a 10 year period, only to drop like a rock later on. There are plenty of historical examples. I wish you luck if you think things will continue, because you will need it.
takenoprisoners – it's easy to make something look good when you cherry pick your data... tell me how well gold did if you bought in '80 and held onto it. even at todays record prices you would still be under water some 40% after inflation. you sound like a '05 house flipper. hope your mortgage is paid off....
People forget that gold bugs have gotten smashed in the past. They get too emotional over it and forget it is just a commodity. It may go up more, but I can promise you it will also drop, and once it starts dropping, people will get hurt.
The author seems to take lengding for granted. Why U.S. count others to pay for u? Why U.S. can't develop own economy better? A narcissist narcissist!
@TakeNoPrisoners - I suppose you were completely surprised when the housing bubble burst and all the people that had bought homes as an investment lost everything. The same thing will happen to you. Eventually people are going to have to sell their gold because you can't walk into the store or your utility company and pay in gold. If you're counting solely on your little gold buying business then you're naive and will deserve to be laughed at when gold drops back down to $200-400 an ounce.
Gold always will have value. It was around 200-400$ just because people thought economy is very strong. But it is not the reality. You dont know how many dollars fed print in 2008 and still keep printing. Coming to housing market, people bought homes when they cannot afford it. And moreover houses are liabilities rather than investment. But people buy gold only if they have useless dollars. they dont take mortgages to buy gold.
Gold is a commoditiy and if one pays attention the majority of the rise in perceived value is against the dollar which has dropped over 50% in the last few years...it is a bubble that will make the real estate bubble look small when it blows...anyone buying gold against dollars today for long term it going to lose!. $A is a commodity strong currency and it has risen leaps and bounds against the dollar...gold in terms of $A still up but no where near as against the dollar...on the technical side still some upside room...but not much longer
This author is short sighted. He seems not understand the basic economics. Look at the logic, borrow money is doing lender a favor and the more the merrier. The problem is if the lender stop lending, it may suffer some loss of earning but US suffer loss of life.
I will tell my credit card company what the author is telling us. Lets see what they have to say!
"The problem is if the lender stop lending, it may suffer some loss of earning but US suffer loss of life."
The Chinese will also lose the $1,4 trillion, if the U.S. is completely broke.
@j. von hettlingen: "The Chinese will also lose the $1,4 trillion, if the U.S. is completely broke."
In this case China will buy Alaska and few other cash rich states for 1.4 trillion and will not mind buying the rest of the country for pennies like US bought Alaska from Russia
Fareed's logic is the following:
1. US buys things from China, pays them in dollars.
2. China can only do two things with USD:
a. Buy T-bills, or invest in the US.
b. Buy oil.
BTW, in addition to T-bills, they're buying up a lot of companies in the US, they're buying real estate in NYC etc as well. So one should change T-bills to any US assets.
3. However if US goes broke, then China loses:
a. Their investment
b. Their market.
The flaw in this argument is that Fareed assumes US is the only game in town. Its true T-bills are the most liquid, least-dumb investment to make. But there are other markets China can go after. It may take a little longer, but consumer markets are developing all over the planet.
All this means we need to get the debt crisis fixed ASAP so we can get back on track.
It was very disappointing, and I guess a sign of the times, that neither Krugman nor Rogoff could agree on what needed to be done.
Zakaria is correct that China is really backed into a corner by running consistent trade surpluses. That surplus causes their currency to appreciate, and the Chinese have to flood the market with Yuan (i.e. trade them for other currencies) to counteract this force. Unfortunately, no market other than US debt is deep enough for the volume of purchasing China must conduct. We really do have them in a tight spot, and it would be even tighter if we could resolve our budgetary issues and stop lending to them. What would they do then?
"Zakaria is correct that China is really backed into a corner by running consistent trade surpluses."
From what witness in China, the changes in the last 20 yrs, it surely is a fantatic corner China is backed into.
"So ignore all those theories about China doing America a huge favor. The reality is, they have nowhere else to go. We're probably doing them a favor."
While we sat on our lazy ass borrowing anyway we can, the Chinese have ran the race from the very last to the very front, moving great wealth and brains to their doorstep. I beg Fareed please also do us a huge favor: This article do us no bloody good, please withdraw.
Youi are not serious are you???
The numbers don't lie. Our government's biggest debt is the government itself as the author pointed out and that is a good thing but of course China is our second biggest borrower and you can look that up anywhere. We also employ all of China and if it weren't for the US, China would be nothing. They are scared at going down with us but reality is nothing is going to happen to China as long as there is always demand for Chinese-made products. We will never stop buying Chinese products because if we did, then everything we consume/purchase on a daily basis would cost much much more. You have to also remember that China exploits and manipulates their currency to make it stay weak. Any normal citizen of a country would want their own currency to be strong why does China not want the same thing? Have you asked yourself that? So in the process they are the ones who are hurting their own citizens. Look at the conditions that Chinese workers work in. That's thanks to China's own government.
For myself, I would rather have fewer things, but with more quality. I would rather quit buying from China, and bring back American, quality products, not the lower quality Chinese products(to all of you who keep berating America). That in turn may bring the jobs home. The government needs to have a plan to return jobs to America(to those who praise China and blast the US, how do you think China has started becoming middle class? Many US companies are there giving them jobs)I think the people should start complaining and bring American companies back home, even though its cheaper labor in China-wheres your patriotism?Your country needs those jobs, find a way to bring them back so you can earn enough satisfaction, is that so difficult or are ALL businesses too greedy and need to be boycotted by Americans who take their jobs overseas?I dont have any solutions, thats not my area of expertise, but I know there are plenty of intelligent, innovative Americans out there who are quite capable of creating jobs for people, thats what Americans are all about. We dont give up and we come back stronger. I call on BIG BUSINESS and CORPORATION and those with mpney in their pocket to make a differnce here since politicians can't.I dont like to berate people, but its a fact that China and a few others STEAL ideas(even making copies of original cities in other countries) . Shame on those who sing their praises , then blast the US who has helped many countries rise to midle class by exporting our jobs or importing their goods. Americans need to start looking out for themselves and insist that jobs stay here. I dont care if its cheaper to build something in another country rather than ship it, the government needs to help find ways to ship them cheaper, rather than building factories with our technology elsewhere.We help others and it only hurts us and allows us criticism from those who dont know who helped in the first place.And those businesses and corporations know who they are. We in fact helped India with our technical jobs and one company is bringing the jobs back home and I applaud that move. Our voices need to ring louder in this regard. I used to enjoy helping other countries, but there is no appreciation for it, all we hear are the negatives from the world because no one knows the reality. For those that wrote these articles, you should know, we are a resilent people, and when we are attacked verbally by people we have helped, we know its time to stop helping you. Now, if we can get the government to start listening up, because face it people, you work for we the people, and we need to make sure you get a pay cut because youre not doing well in job performance. We would all be fired by now!
Oh and btw,I feel the government should listen to Fareed and others who offer ideas, maybe you will learn something!
"Look at the conditions that Chinese workers work in. That's thanks to China's own government."
From the Chinese citizen' approval rating of the Chinese government and millions migrant workers from the villages, we need to ask "Is the workers condition really that bad as we heard?"
China is just playing the waiting game. Once there are strong consumer markets that have a powerful currency, China can ship large volumes of goods to non-US markets.
Making all products back in America is un-realistic, US workers need to be payed far too much to justify manufacturing small goods here, that is why the only US manufacturing jobs are in high tech/high value goods. We need to look to invest in Mexico and turn it into our China for manufacturing. This will do so many things: bolster Mexico's economy, discourage illegal immigration because jobs would be there, reduce influence of cartels which prosper in poverty. The biggest thing is that we will save on transport. It is a lot more economical to build more cargo train lines to mexico than to ship in goods from China.
Chinese women workers(50-70 hrs per week), have a lower standard of living than our "welfare moms" who never work. We are borrowing money produced by these Chinese workers to finance welfare moms. Let's readdress what we are doing with our social programs when we proclaim to help the "poor".
a couple of thoughts/questions:
China is one of the few countries in the world that has multiple currencies. The Chinese can keep their own currency artificially low, as has been discussed at length above, for the purposes of export but still purchase globally with the Hong Kong dollar, which is one of the most traded and reputable currencies in the world (and the Macanese pataca, but I can't see that being used). I'm not actually sure how big a factor this is, but it would seem to be a considerable advantage.
Also, unlike the yuan renminbi, the HK dollar is globally traded. HK still counts for a full fifth of the Chinese economy (depending on how that's measured). What are the odds that the US and others haven't already loaded up on HK's equivalent of t-bills?
If the world economy collapses (lets not discuss if vs. when), there won't be anyone willing or able to pay $1800 for the ounce of the gold you just bought. And guess what? The gold bubble, just like internet stock, Enron stock, housing, mortgages, and everything else that is purely made up of air, will burst.
OK, who is ready for the next bubble? I have some great land in Florida for you.
So this traitor Zakaria wishes to exchange US collapse for 1.3 trillion, only? I bet not only Chinese but also Euros will be more than happy to do so.
"So this traitor Zakaria wishes to exchange US collapse for 1.3 trillion, only? I bet not only Chinese but also Euros will be more than happy to do so."
First off, why is he a traitor? He analyses a situation, and he's a traitor. If you say so, but to say that he wishes to exchange US collapse for $1.3 trillion "only" makes no sense whatsoever. What Zakaria was doing was simply giving the reader context – it's a whole lot of money that can't go elsewhere for the various reasons he explained. And even if the US were to "collapse", I'm pretty confident that both China and Europe (and the rest of the world) would not be happy.
There's no zero sum "exchange" here. The US and China are stuck with what we've got, because there's a hell of a lot more downside to turning the boat in a different direction, than leaving it on course. Think before your type.
Simple Outline:
-The Jews print money at will (giving them all the power to do with as they please).
-With that money, they purchased (stole) the entire American manufacturing industry (we create, they corrupt & destroy).
-Then, they moved it all to China (this all happened right under our noses in a relatively short span of time, yet very few are able to recognize the obvious, even to this day).
-All the while, they tax us into slavery, and sell us back OUR goods that are now laced with lead and other toxic substances (think that was a coincidence/accident or the fault of the Chinese slaves on the other end?). Yes, this is just another way the Jews have poisoned us (and our children).
-In the meantime, they stole OUR technologies (all they do in China is reproduce everything we invent, discover, and create), our military secrets, and fund the very RED army they will eventually use to strike the final blow in our coffin justified by our false "debt" to them. Do you "think" they are arming them for "nothing", and convincing the Chinese that we "owe" them for "no reason"? Will you still "believe" that as the RED Chinese army is marching down your street?
And on the back end of all of this, they have most of the American sheeple convinced that we somehow "owe" the Chinese, as they have engaged in a relentless propaganda campaign in China as well to convince them of the same ridiculous lie.
Wow.. What a scam these Jews have pulled off. Robbing us blind, destroying our economy, stripping our entire manufacturing industry down to the bones, and convincing the Chinese that we are in "debt" to them (of course the Jews have complete control over China, so all that "debt" they created on this end, goes right to them on the other...screwing us both coming and going)
Unless of course you "think" this was all a "coincidence" and "believe" that the Chinese somehow out smarted us, swooped in and stole everything on their own, and beat us at our own game...To point out the obvious: these are OUR inventions and OUR technologies, nothing originally "Chinese" about ANY of "their" products or weaponry.. especially that Chinese warship in the 1st post of this thread (what would they threaten us with if not armed with OUR military "secrets".. bows and arrows?).
Again, they are using OUR technologies against us... to include, in the not too distant future, the military technologies that were stolen from us. "Ironic" isn't it? Or so it would seem, to a person who is unaware of the Jewish agenda and their usual modus operandi.
Wow, Scott!! Most people think that the Jews are just a bunch of comedians.
Now this should be a turning to us Americans. Let us not depend on their products (which our rich brother chose to make use of their cheap labor). Lets work harder if we want to recover. No more spending beyond your means. Cut your credit cards. Bank owner will start planting tomatoes on their backyards. We can be self-sufficient. We are the great inventors of all times. Our movies produced are admired everywhere in the world. We can put back the American Dream the Chinese said we lost. Our products are always of quality which are always admired abroad. I'm not delusional and not sick when typing this. Just remember when the Russians sent their first object out the outer space. We were so worried for not being number one. We will struggle to be number one again!
Lawrence, most people don't THINK at all. Therein lies the problem.
Scott:
trollolololololololololololololololol!!! Good call with saying the Jews control China. Brilliant stuff, mate, really.
It's more cunning than that, Scott. They just pretended to move all of US manufacturing to China. Actually, they left it in the USA and they only pretend to control it all. In fact, even more cleverly, they don't actually control or pretend to control it.
How subtle is that ?
invest in gold instead of treasuries? bwahahaha! if you owned every single ounce of gold ever mined worldwide you still would be looking at a pile of value equal to about HALF of the us debt.
Hey, there is a finite amount of comodites that market will get OVER HEATED AND BURST LIKE THE OTHERS. Oh, I SMELL a TEABAGGER, since your on those tubes i.e. internets google/bing/dogpile/yahoo and anything else. The tulip crash in Denmark. You can simple cut/past my words to find what WILL HAPPEN TOO YOUR COMODITES.
As the dollar declines, along with home values, and the CD not paying a dime, with Gold increasing in price..as the debt escalates, one has to laugh or cry we are in debt up to our eyeballs...
The world markets are laughing, and the president votes present and spend even more...
We can spend our way out of debt, sure we can....
If China thought silver or gold were a better, safer investment, that's what they'd be holding in reserve instead of dollars. The value of treasuries is at historic high right now. If China wanted to divest, they could do so at no loss (at least, they could divest gradually).
The premise of the article is correct. China is doing a favor to China only. They may be mad, just like American citizens, that congress went down to the wire on raising the debt ceiling, or that more isn't being done with regard to the deficit, but if they want to divest, theres nothing stopping them except their own best interest. China wants their currency devalued compared to the dollar and they want to hold safe debt.
America doesn't owe China any favors. America's already doing China a favor by being the safest possible place to park their budget surplus.
Why would anyone buy REAL THINGS???????
Gold, silver, oil! You do not get paid back!!!!! Assets!!!
shame on you ! Why don't mention the drop down of US Dollars ?
American destruction is at the hands of the federal reserve.
None of you have ever asked a Chinese about China... I remembered some of you predicted China to invade Taiwan.... China being so aggressive.... in the past 60 years since communists took over China, it has invaded only two countries: North Korea and Vietnam, and had border conflicts with several countries, and most of them resolved. United States? Don't let me start counting. So why is China more dangerous than the United States militarily?
@Sean – Really? What do you think Tibet is all about? What about the war with India in 1962? Also, please talk to the Oiyghurs. What about the communist invasion of Malaysia in the early 1960s? Please also chat with some people in Inner Mangolia. etc. Many of these were land grab/ or attempts. Please know your history first.
As for the US, show me one country where they have stayed on. Yes, it is true that the US has represented and fought for a global economic regime – and like ALL POWERFUL nations in History – has consistently sought to ensure that success of the global economic regime is to its' own advantage first. The population and citizenry of no other country in history has been as vocally critical of their country and about 'fairness', as those of contemporary USA.
I am a new immigrant to this wonderful nation of ours. I admire your ability to criticize, but also for giving me the opportunity for the rebuttal. Please just be factual – and smile, my friend – we are not as bad as you think we are
This is a huge hypothetical – but let's play out the disastrous chain of events that would happen if China began to divest. Fareed you are such a tool????? Everything in your post was pure speculation. Could you at leat find some hard facts?
Ray writes:
If it were me I say raise a national sales tax. And pay everything off.
I didn't get he was saying either side is in good shape... both are addicted to something that is unsustainable.
what would you expect? look at history of civilizations. those who control the future exchange of commodities, became an empire...which we are possibly, still ahead of other countries... as we look to sell destruction. which i postulate we are good at this devastation. only to our demise. the hard choices must be made, and they do not help the wealth of a few. sorry, wait i'm not sorry, i'm liberally minded and realistic human with an education our gov't is cutting. to heck with our kids! lets just leave them trust funds and...wait, i can't afford that. well i guess i'll just vote in fear. bla bla bla
The article is pretty spot-on. There's an old saying in business:
"If you owe someone $1000, you have a creditor.
If you owe them $1000 BILLION, you have a partner."
Well....He's right that China is not doing us any favors. Not to mention that they steal technology constantly....they got the specialized materials from our downed Bin Laden raid helicopters courtesy of Pakistan. China is not a friendly country and it is hardly a democracy. Basically run by thugs who have no legitimate claim to power. They desperately want Taiwan but are unwilling to become a true democracy which Taiwan would consider joining.
No.
Let's say I sell you so much gold that you yourself push up the prices of Gold to unforeseeable highs. What happens when body wants to pay the amounts that you do? They sell or stop buying, driving the prices back down. And who says China isn't doing a little diversifying anyway?
The difference between stocks and commodities, vs Bonds, is that Bonds have real value – they are paid in interest rates instead of fictional demand.
Guess where stock-flee-ers run to? The bond market. It's a safehaven, even in a downgrade.
What about needing to keep their money weak? If they do what you say, then their currency will appreciate. They're a export driven economy, they would be hurting bad from that as well.
The who is benifitting is large corporations and banks, its that simple.
as every economist know, gold or petroleum or thinks like that is NOT investment. US should do actions to grow the value of US dollar to chinese and do not accept the US $ undervalue. if you don't know where to invest, i can give you a suggestion: BRAZIL.
To the Chinese: "Owe u $200, that's my problem. Owe u $1 trillion, that's your problem"
Typical western mentality until you start losing your house and land.
The problem is, the whole world economy is in a mess. Bubbles burst and our economy is one big bubble and it is slowly unwinding. We're ALL going to have to deal with this economic mess for many years to come. Voodoo economics my friends, are coming back to haunt us all. The next boom economy will not come for at least 20 – 25 years. We're all in deep doo-doo.
China is like Obama they talk out of both sides of their mouths, China artificially devalues their currency to keep their economy going against the US currency all the while holding a huge amount in America Securities. They also have legal slave camps as their people don't know any better but to work from sun up to sun down with no days off.
If Obama and China are both speaking with two sides of their mouth, you are speaking with the whole mouth and we get lots of hot air only!
Does china make anything which is a necessity..Nope ..Idea now should be just stop the import of chinese goods..There aer no debts to be paid..Quite simple..understand one thing Chinese never make a prodcut which has a monopoly..So tahts your strength..What the Author did say is yes.. China is like a parasite feeing on its host
you're absolutely right! None of the stuff made from china are of necessity or not replaceable. they are copies of other safer quality goods. we can keep our garages clean by not bringing home things because they are dirt cheap figured they don't effect the budgets. Eventually, they do add up. If everyone stays off walmart or similar places for a month now and then will see that nothing will go wrong at all.
Remember the golden rule of banking: If you owe the bank $100 dollars, your in trouble.
If you owe the bank $100 million, the bank is in trouble.
That was a well written breakdown of this trade-off that Chinese and America have with
each other financially. I also understand the point-of-view that the Chinese have about
American debt, lately.. As an American, I also wonder why in the world did we stop making our
own products? Why did we shut down all of our steel production, and automotive production
or sell them to Asian car makers? Detroit is a ghost-town. America was the place everyone
in the world came to purchase products they wanted, and was considered to be the best
for a period of time. Some of our classic cars sell for 100x what they originally sold for today at car auctions to Chinese and European collectors.. Something changed with the direction of American businesses, and
their strategy to make as much money possible, without any thought or basis for the future
of American citizens, and being the best country in the world, and continuing to be an example to other nations,
and that they would want to be more like America. That was what I believed was the point, and our destiny, when I was a child
growing up in America. This story has changed. Americans are a strong, patriotic people, but
we were also interested in easy-solutions, and over the last couple od decades we have been less and less interested in the security of that system for future generations as much
as our government wanted to spend more and more of our money on programs that benefited only the few, and focus on solutions like GATT AND NAFTA globalist trade deals that only benefited everyone other than Americans first. Globalism is
real, and it appears to be what everyone wants who works to invest their money into finance or markets.
Not just Americans. Chinese too. Even the EU. I personally would like to return back to the time where America was the best
country in the world, with the best cars money could buy, and the highest innovation ratio and
break-through scientific inventions. There are so many things wrong in this world today could benefit from
something like this more now than ever before. Who else has proved to handle that task?
As the world population increases, if we fail to have the foresight that we have lacked now for the last 30 or 40 year as a nation, simply
blackmailing (financially at least) the Chinese and the EU into this ridiculous globalist strategy, with no real
end in sight except a globalist new world order, something I doubt very much many average
Europeans, Chinese, or Americans wish to have happen, we may never have the opportunity to return to what is good
for our own people, for our own future generations, and not some imaginary new world that
will somehow fix itself by going bankrupt first. I will say that I have no easy solution either. But it would
be better than some strange fallacious financial theory how the Chinese are the same as Americans
financially, and that we continue this strange dance, or we fail. We didn't have this problem
for hundreds of years before in America, and we were the best country in the world in so many ways. China
didn't have this problem before, and they were one of the most solid societies on earth for thousands of years. We may
have won the war against many of things that we both mutually stood together with in the past, but we have
undoubtedly lost the peace of mind regarding each of our own countries best-interests, ourselves, and
our own people/children/elderly. How strong can the individual be or as successful will they ever become
if the end-game strategy is bankrupting and ruining everything that worked so well up until the last
couple of decades for the purpose of some new world order.. I'm not satisfied with the media telling me that the Chinese are damned if they do and damned if they don't, because that also means we here as Americans are damned if we do and damned if we don't too. That is a childish and stupid justification to have to accept for any stable system to exist for the long-term, and deep down we all know this to be true, though we may not wish to admit it openly in the media.
i cant belive it
one man with brains in all of CNN formes
you must be on the pay.
China has other ways of parking their assets. They will buy up the USA. Yes, we are gonna be your new landlord. Please be nice to us or we will boot you out of your apartment or office.
The reality here is simple: USA should stop borrowing more money. Fantasizing about what could China do is a waist of time and energy. All liberal journalists are trying to tell us that there is nothing wrong with borrowing more money to China, cause they are in the same vicious cycle. Stop making excuses please.
There isn't enough gold and silver on the planet for the kind of cash we are talking here. There is no other consumer base in the world that could absorb China's goods and they, at this time, are not prepared to put their billions of people to work should the worst happen. Plus China is already busy squashing growing protests, revolts, and uprisings due to working conditions. Losing a few million jobs would put tremendous pressure on the Chinese government to implement steep and swift changes to maintain order and control. Yes, at this time they still need the US nearly as much as we need them, scary. Two superpowers are not going to war in this day and age over debt. The future shortages of resources, food, and water are much more volatile.
Farid is against China Why?? becuase he is an Endian and CHina has kicked Endian's back side quite hard when they fought . So they put the Arms doen on that front realizing that tiger has teeth and claws intact and their Endian Cow is help less in that fight . So they only do mouth bashing against China. If you are spending more and your lender adviced you to spend wisely before you gone bancrupt is a favor.
I don't think you understand the point here. Maybe you should read it again and think.
The thing about arguing with someone over the internet is: whether you're right or wrong it doesn't matter. you're still a retard.
China is only trapped in the sense that they are going to be bagholders if we default. Can you imagine the "problem" of having so much cash that you don't have any place to park it? Gee, that sounds so catastrophic. If only we had that problem. Trust me, they can find plenty of places to put the cash if we decided to "cut them off" from our treasury bill market. Just typing that sentence makes me LOL.
yup being arrogant when you owe more then you make is a clear sign of stupidity , and he's being paid to get this edited ?
That is not correct.
China has 1.3 billion population. It is not any other countries. China just needs to turn it's economy from exportation to supply it's own people.
Build up National medical insurance, unemployment insurance, free education, invest it's money to high technology agriculture and biology technologies, even defense technologies.
Let the cheap labour, low added value, exportation companies to get bankruptcy. Move the social resource to where the market leads to.
By this way, china does not need an big importer. China can sell off any single USD.
That will be the future of China.
Then, US has to produce things. Made in China will not be as cheap. Eventually, US will create value by it's people to pay down the debt.
The easiest way to solve this problem is to let the Chinese currency to increase. Once this is succeed. All the problems can be solved.
@zzz
In those instances the Chinese military had the advantage of being close to home and close to an easy flow of supplies. In addition while their troops weren't as well trained, they were acclimated to the environment and had far more detailed knowledge of the region.
In any case, China going to war with the US over debt is ludicrous as it doesn't even accomplish the aim. In the worst case they lose and as a treaty action we have them wipe the debt, in the best case they win a stalemate and spend a ton of money getting there and likely the debt is reduced as a treaty action.
How do china buy gold without dollars? Yuan has no values and no one will take it. For the commodity purchase, do china sends it's carrier to haul them home? No, bring a brief case for the certificates and stick with something that makes economically sound. Gold and silver are metal, they are good for jewelry and electronic products. They are limitted and are not source of protein! In case of mergency, a bag of food and water worth more! It may sound annoying but remember, the china should worry about how to maintain business relationship with the world for it's own survival. The chinesse presses are mostly lack of knowledge and they are talking too loud as usual.
In the Future Silver will BE WORTH MORE than GOLD. Trust me. DO YOUR RESEARCH.
No, China doesn't have alternatives: no other market is large enough – metals market is too small to absorb a trillion in purchases, and the other edge of the sword is that China needs to keep the yuan low. If they stopped buying dollars and bought resources – oil, minerals, etc, the yuan would rise – just like the aussie and the loony. Get a clue before posting, eh?
Fareed Zakaria is hundred per cent right in his assessment, I strongly believe President Obama should appoint Mr. Fareed as his economic adviser, to turn the tables down on China.
THAT "Z" DUDE IS A JOKE!,.SO BIASED,.EVERYTHING ""I*N*D*I*A"" IS GREAT FOR HIM,.HE IS A PHONY!
I think bejings actions are proof enough. China is trapped. Everyone is trapped. Sadly the world will msot likely blame china for this global economic breakdown. China could invest in gold which in turn would increase the value of gold and who has the largest reserves of it? US. Silver goes down and who has the largest reserves of that? China. Its a scary moment. I think China is now realizing what they are causing. They like to cheat the systems and dilute the market by unfairly controlling the employment wages. China is dragging the world down and they are not listening. This is naive China at its worst. This is why China will probably get blamed for this in the end.
And your opinion is more accurate because of...?
Would still like to see USA businesses pull out of China, as they are part of the reson China is rising to Middle Class. I would rather help democratic, smaller countries rise to middle class than a country I dont trust. Some place where we dont have to face the arrogance and flexing of muscle seen by this and remnants of other Chinese govs. I understand some companies need cheaper labor, but why go someplace where they steal our ideas and cheapen our products and brag about their rise while challenging us andputting us down. Or better yet, US businesses should find a way to find cheaper ways to function in their homeland and create jobs back home, thats PATRIOTISM. I'm not a financial, business expert, but there are many out there who can show ways to bring our corporations back from China and other countries who are not as US friendly. I would rather see them go to poor countries who would appreciate us, who I would love to help anyway. We have ideas and others steal them because we wait too long. Time to get innovative.
《山海經》有記載，在神州和東海蓬萊之間有一座海底仙山，隋唐以來，日本、高麗循海路來中原進貢的使臣和留學生，以及唐、宋、明、清歷代東渡扶桑的中華人士都目睹過蘇岩，並留下文獻記載，歷史古籍更確認蘇岩礁屬於中國無誤。
清末民初，中國的地質學、地理學進步後，專家更證實蘇岩礁位於東海大陸架上，是中國大陸海床的一部分。
它位於中國領海和二百海里專屬經濟區內，是中國領土，外國無權在蘇岩礁上建築前進基地，更無權在其周邊海域開採石油，霸佔該島礁就是侵犯中國領土主權的完整
宏觀來看，朝鮮半島狹小，三面環海，朝鮮人自古就有「北拓精神」，向與中國接壤的北部拓邊移民是擴大疆域的唯一選擇，近代在日據朝鮮時期，朝鮮邊民越界到偽滿洲國吉林一帶開墾，就是一例證；
那以後，韓國開始向東拓展領域，在日本海與日本爭奪獨島，採取先佔原則，日本居下風，韓國成功開闢了東疆。如今，韓國又開始擴張南疆的領土，強硬而迅速先佔為主。
從微觀看，韓國想將蘇岩礁築成人工島，而後根據國際海洋法，在中國東海、黃海圈出一塊相當於法國大小的一片海域，屬於韓國，目的是劫掠東海漁業礦產，覬覦海底石油資源。
中國失去蘇岩礁後海域縮小，大面積海洋國土淪喪，東海和黃海與韓國對半分都分不到，空域也被連帶壓縮，防空識別區拱手讓給韓國。
漁民丟失漁場，漁業發展受到制約，海軍只能在沿岸近海游弋，成了海岸巡邏隊，最重要的是海底石油財富全給韓國人搶去了。
i won't buy anything that comes from Zak. he suck. big time.
I concur...
You show your limited education and understanding of the economics like Michelle Bachmann. Remember she said " I will not raise the debt ceiling" and let US default and declare bankruptcy. Thank God that dumb people like you and her are not managing the country's economy.
We are in debt partly because of Bush tax cuts and a massive fraud generated by Wall Street . Why is that the tea party Republicans don't like to pay their share of tax but still want all the services from the govt.
ZakSuckACreek, you just jealous of ZAK 'cos of your very limited IQ which is graded as the shoe size of a church mouse. Very, very, very Tiny! ZAK has more brains than ALL GOPer's dead or alive put together. Have your tiny, peewee brains examined. You look like a typical primitive, backward GOP who HATE people with HIGH IQ's. Punk, eat your hate filled heart out. There's nothing you can do about it.
Wow, really interesting perspective. I would be curious to know your thoughts on what would happen if we prevent them from buying t-bonds in the future as a method of reducing our dependency on them.
For all of his talk of us vs them...how come he never mentions the U.S.'s possibility of placing a tariff on China and the pros and cons of such an action. It would decrease our trade deficit with China while adding 220 billion in tax revenue. There would be inflation, but it would be on unnecessary goods. It would also encourage local manufacturing, or at the very least move manufacturing to a smaller nation.Let's face it, the U.S. has a huge advantage when trading with smaller countries that it does take advantage of.
The tariff on China would only be placed until they let the value of their currency float.
By allowing China to keep its currency artificially low without any penalties, the U.S. has been handing China billions to trillions of dollars in revenue to the benefit of large corporations who have moved jobs there at the cost of a good chunk of the American economy.
I just want to know why no one is even suggesting a tariff which is the logical economic step when one country is keeping its currency devalued. I fully admit there may be good reasons why this hasn't occurred, but I can't think of them, and I have not heard any reasons why not to do this. Even the threat would probably benefit the U.S.
jheron: Since we allowed China to join the World Trade Association we are not permitted to put tariffs on their products. If we do then they can counter us with other things as well as other countries could. Which in the end would be real bad for the US
VERY SIMPLE,.BUDDY! BECAUSE WE, AMERICANS,.ARE CAPITALISTS,.WE SELL EVERYTHING FOR A PROFIT!
EVEN YOUR WIFE TOO,.IF YOU CAN DO IT,.""BEFORE YOUR WIFE SELL YOU OUT FIRST"",.
The Chinese government is also made stable largely by internal force of arms. The people obviously feel oppressed to some extent and they would likely prove restless should there new found upgrade in stander of living begin a backward slide.
I know people who live in China, and while there is a lot of dis satisfaction in places, unlike the USA, it isn't directed at the central government. In China, distrust tends to exist at the local level, which is where corruption tends to lie. People get angry when local village chiefs and those who are close to them profit from urbanization at the expense of the villagers, or angry at the local businesses which sometimes operate like robber barons or mafia.
I LIVE IN CANADA AND IF A CANDIDATE FOR PRIME MINISTER OR ANY OTHER OFFICE, WERE TO EXPRESS HIS FUNDAMENTALIST RELIGIOUS VIEWS DURING A CAMPAIGN HE WOULD BE COMMITTING POLITICAL SUICIDE AS WELL HE SHOULD BE. I WOULDN'T WANT THE LEADER OF MY COUNTRY TO EVEN REMOTELY CONSIDER THE SUPERNATURAL IN ANY OF HIS/HER DECISIONS, ITS ABSOLUTELY ABSURD AND TOTALLY UNBELIEVABLE, AMERICANS GIVE YOUR HEADS A FREAKIN SHAKE
Perry scares me and he is only one of many...
Yes, Perry is certainly a controverse. On the one hand he loves to be an utlitarian, on the other hand a transcendentalist.
Yes, John, it frightens us to know that some of our neighbors and fellow countrymen are delusional enough to vote for any in this bunch.
I agree
Sorry but what does this have to do with China buying U.S. debt?
LOL John I am not sure what this has to do with an article on C H I N A, but yes you are correct it probably would be political suicide, we just dont do that here – and lets hope it stays that way – Perry is one import we do not want.
John, this is really a petty point. Are you saying you have a good hold on your decisionmaking process? I am an atheist, but I really do not think I can pinpoint where exactly my 'gut feel' decisions come from. I know from experience however, that it usually does make sense to do what 'feels' right, and that in complex situations we do not have enough information to make a 'rational calculations', and thus have to rely on 'guidance from within'. The fact that, say, George Washington was what you would call a 'religous fundamentalist" does not in any way diminish the soundness of his decisions, as far as I am concerned. So, would not have any problem voting for him today.
LoL @ john. were you forced to say that so you don't get taken away to a labor camp? I'm not sure anybody really wants to copy the Chinese "political" model.
John, this is NOT CANADA. Every person has the right to vote whoever they want. Just because you disagree with a large faction of the US population who are evangelical Christians does not mean they have no right to be heard or vote someone who is like them. I don't like Perry because he is a horrible governor. But to each his own.
Who says he is a horrible Governor. He has the third highest approvals of all 50 states governors in the polls. He has low employment compared to most states. The Democrats in Texas love him because Perry was a Democrat for six years. Hes the only candidate that will bring Democrats and Republicans together. Ronald Regan was first a Democrat as well and brought both together. Of all 50 Governors Perry has the third highest state approval ratings in all the polls. I am Republican but most my Democrat friends say Perry is the only one theyd vote for because they know Perry started Gores campaign and is a true Democrat. Trust me. hes the only candidate that will get the Democrats and Republicans to vote for him.
Brian,
Better check your numbers - most Americans are NOT fundamentalist "Christians" :
Evangelicals – 26.3%
Catholic – 23.9%
Mainline Protestant 18.1%
Unaffiliated – 16 %
etc, etc.
Did you get your figures from the same source that holds the the United States were formed as a "Christian Nation"? Major Fail!
SORRY,.BUDDY,.WE,.AMERICAN,.REALLY ,.REALLY NEED SOME GOOD F*U*C*K*I*N*GS ,.SO WE WILL WAKE UP & KICK ALL THOSE CROOKED POLITICIANS OUT FOR GOOD!
Fareed, you are one of the more intelligent voices in the media but I have to say you miss the point about why so many Dems are upset with Obama.....it's not that he compromises, it's that he compromises when the other side won't, then thinks he's making progress. Yes, he needs to engage the public and to educate them on the GOP agenda, bring it home...the absence of any mention by the media is proof positive "liberal media" is a myth......one of your guests just barely got out how the Bush tax cuts were a major part of the problem before you cut him off.....so tell me Fareed, do you have an overlord, as well? The Truth will save America, not party politics;
CNN is a double agent for the GOP
Rofl. Cnn leans left, unless you're looking at it from a marxist perspective.
I agree. What is this "hands-off" policy wth the Bush administration? The same people who are ready to "impeach" Obama sat through eight years of what brought us to this point! Where was the outrage then? Everybody was too busy waving flags and saying "Go get 'um, Georgie!" So, bin Laden was captured under Obama's watch. Still, the rednecks and the aristocrats aren't happy. The money is gone. It's spent. We now have a larger deficit than before. Amazing how it's the sick and the elderly's fault!
How many hundreds of fathers, mothers, brothers, sisters and sons and daughters did we bury? How many families have a void that will NEVER be filled? How many children will never know their mothers and fathers? A Chinook carrying the brave men that captured and killed bin Laden was knocked out of the sky. More dead. For what, now? We keep sending lives and dollars into that pit called The Middle East because George said so? I'm not buying it – but the Chinese are certainly paying for it!
Uh, George has been out of office 3 years. Mr. Obama has had 3 years to get our troops out of Afghanistan, and instead he greatly increased troop strength, yet the insurgency and taliban are as strong as ever. Don't blame George, he is gone. The Obamonator is (supposed to be) in charge.
The "Truth" will save America? Please.
"We're probably doing them a favor."...good one. Let's keep repeating this line and all our problem will disappear.
So what it all boils down to is that we don't really have anything that they can use over there other than these magical green pieces of paper that can convince them to give us what we want. That does not sound like it would require very much of a work around compared to having to suddenly support your own population with 0 manufacturing facilities.
Back in the 80s we were told how the economy was changing. We weren't going to have to work in mines and factories like our parents did (we were told that was a -bad thing-). This is the new SERVICE ECONOMY!
Want fries with that?
One would think that all this was manufactured by astoundingly smart people in untouchably high places to permanently keep the Chinese dependent on the survival of the US.
I think North America should avoid doing business with China Chinese all together, accept the fact they are not our friends to many fraudlent chinese companies. Do not invest or you lose!
Ken, good luck with that. I went to the store to buy gauze the other day – guess where it's made? (Hint: not here.)
How long did it last for, if you need some more come to a Vancouver BC Night Market (Chinese) you can get all crap, knock offs and pirated goods you want direct from China!
Why trade with a country that is against religious freedom, uses slave labor, and has a one party Communist government? Are Americans that addicted to $10 bread toasters and cheap hammers? Every DVD player I looked at yesterday was made in China. I couldn't even find one made in Korea and certainly not the good old US of A.
Common sense: Because it's cheaper. That's why. Business couldn't give any less of a s**t about how the country they deal with handles their people, they want the best deal possible.
Fareed, resident expert on all matters foreign and domestic, is at it again! CNN, please do us all a favor and find a new "expert." At least give us a few more to choose from ... Fareed has been your anti-American, golden, go-to boy long enough! And he's proved himself wrong more than right! I don't trust anything he writes because he's wrong sooooo often. I just don't understand why CNN editors can't see this???
totally agree. he is over again, again and again. this guy called Zak or w/e should be fired.
Exactly what's anti-American in the article above, Sitty?
China
I agree, Zakaria is nothing more than a very good talker. I'm from Canada and from an objective point of view, he merely makes arguments to stoke anti-Chinese fearmongering, like most of the media. I saw him in a Monk debate in Toronto and it's obvious he is supports creating a new "cold war" between the US and China, like most of the media, because there they need to blame someone.
The fact is that China is an emerging super power. That does not mean it is game over for the US. It means we, in North America, need to change our education system, create a more skilled labour force and yes, increase the production of goods and serviecs that the world buys. No, it does not mean we need to put more tariffs on products created in Asia or call out the Chinese as the next boogey man. That isn't going to help us in the long term.
Idiots like Zakaria are just pandering to popular media ideals of creating tension between two of the world's most important countries, who are probably going to just end up being two of the world's largest trading partners and live a peaceful co-existence as these two governments try to do the best for their respective citizens.
Creating an "us versus them" mentality isn't going to change one thing. Zakaria is only good at painting the Chinese as the enemy, which is funny since he's representing himself as a "true American" when he is from India. The two economies of China and US have had a very successful and beneficial relationship for a long time now, while India has lagged because there are too many Indian companies that are fraudulent, undependable, or untrustworthy.
Zakaria doesn't propose any practical solutions. It's time to stop complaining about China (because it's obvious, that isn't helping) and start figuring out how to compete with China (on an educational, economic and fiscal restraint perspective). Yes, there is painful medicine in store for us to rectify the debt situation, but we have overspent, plain and simple, based on military, social and govermnent infrastructure). It's like a household that is $500K in debt, of course you are going to have to give up some items you are used to spending on every month. The US needs to raise some revenues and also cut spending. Polls have shown that most Americans already know and support that we need to increase some taxes for the rich, and cut government spending so that this out of control spending situation is rectified.
Though I agree with your other points, this has got nothing to do with Zakaria belonging to India. India's problems are different which dont make the trade grow as much as China's. Too many fraudlent companies? Please do me a favor and post the entire list here.
Dan, do you really invest or Have you married a chinese? China is full of fraudulent companies. Most companies report different numbers to their govt and SEC. Do some research please. India has a much more open society (largest democracy) than China. India's problem is population density, infrastructure and corruption across a wide spectrum of the populace.
Being smart is "anti American?"
News to me.
Can we somehow recoup all the aid we gave China up until just a few years ago, back when they were starving?
You must of missed this:
http://www.foxnews.com/politics/2011/08/09/critics-question-us-aid-to-china-amid-debt-woes/.
It is ongoing.
If, as you say, America's debts seem to be overwhelmingly owned by Americans in Social Security trusts, etc, would it not be biting the hand that lends you money if you curtail Social Security? Or am I looking at a different animal? Perhaps someone can explain.
MY GOD, REPENT AMERICA!!!!!
"We're probably doing them a favor." LMAO ..................
Are we doing china a favor?
RETURN TO YOUR FIRST TRUE LOVE, GOD ALMIGHTY, YOUR STRONG HOLD, YOUR DELIVERER, YOUR PROVIDER, YOUR HEALING, YOUR RESTORER, AND REDEEMER, AMERICA!!!!
REPENT!!
God gave us all brains and expects us to use them. Simply throwing our hands up in the air and asking God to help us won't do the trick.
god wants us to pray. go conservatism prayyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy
Ah, so god hates the Chinese?
Great article but you are missing one huge component. Today, every dollar invested china creates one in GDP growth. In the US, that number is 7-9$ invested per $1.00 of GDP Growth. China can start to focus on investment partnerships within its boarders and boast local demand. It can ultimately replace US demand (nation of 1.2 Billion vs nation of 300M). In addition there are consumers in Russia (although slowing), Brazil, and India. The reality is our debt and currency is losing huge value. Forget the soaring debt load 14Trillion growing to 25 or 26 Trillion. even with the additional super committee we are only talking about a tiny slice in deficit and debt reduction. What is really bad is 60 Trillion-112 Trillion (depending on estimates) of unfunded liabilities. That is an IMPOSSIBLE hole. There is nothing we can do to repay that as a nation. The only solution is to destroy our currency which is what is happening.
The only solution is to raise the top tax rate from 36% to 39%, ending unneeded oil industry subsidies, closing tax loopholes that encourage corporations to ship American jobs overseas and offshore their profits, raise the FICA income limit from the current $106,000 to $250,000 (or even $500,000) and end our military involvements in Iraq and Afghanistan (also eliminate no-bid military contracts).
This would go a long way to fixing our current fiscal crisis.
It's called SHARED sacrifice and those who don't want to do it, can jolly well leave.
36% to 39%, are you that ignorant ? How much money do you thing that will raise ?
There are a little over 13480 Families or Individuals that make over 10 million dollars a year.
Lets just make it 100% tax this year, they should have enough saved that they won't feel a pinch. Problem solved right?
Oops, whats thats only 134,800,000,000 and it's not even enough to cover 1/100 the debt. Get the picture yet. There is only one solution, stop spending and pay it off.
Actually Bob, if you close the loopholes and also add on a tariff on Chinese goods until they allow their currency to float, we are talking well over 10 trillion in 10 years.
Oops, that's in conjunction with everything else.
I'd give up my SS benefits if ANYONE could guarantee my grandchildren would benefit... I thought not.
Lets just say "F" it on the debt. Wipe that slate clean. Other countrys have done it. Short term, it would hut. Long term, it would let the U.S. start over again, without all the old mistakes getting in the way. Go BANKRUPT.
I dont think China would be to happy with that decision lol.
What China thinks is of little concern compared to those who own the other 92% of our debt (mostly Americans).
Your knowledge of world finance is very limited. US is not a third world country that can just go bankrupt and start all over.
It was "The Donald" who was raising the red flag about China over the past two years, and now it seems everyone is paying more attention. Recently, warnings have been aired about the dual threats of cyber-war and economic war between the US and China... all very true... but we cannot be lulled into forgetting the growing power of China's more traditional warfare threats.
If "The Donald" suddenly started saying that the sky was blue, I'd begin to doubt it.
The US would be doing good if it had bought alot of silver when the price was $7/per oz
oh well
I did but it was $3.49 an ounce and now $39 an ounce today. while the old greenback has gone down the tube. China is buying gold, silver and rhodium as we speak and they will start around 4pm eastern time today. i am still buying gold and silver, and fixing to vacation in st thomas aboard my yacht. will have a drink to the dollar while i work on my tan. Gold luck to our president, just hope he doesnt blame anyone else while i am gone as last week he blamed his dog for eating his homework.........
Hope you are right!!
Thank you, Mr. Zakaria for explaining this. Please come up with a simple analogy so that it is easier for American voters to understand. How about:
China's economy depends on cheap exports. The US is its biggest customer. We go under; they go under. They won't call in our debt.
Oh please.
Fareed Zakaria, you should know this better than anyone else.
if the Indians can run their economy based on domestic consumption and still achieve stellar growth numbers of 8-9% per annum, the Chinese will eventually cut the Americans off once gradual Yuan appreciation gives the middle class of China the spending power to consume China's crap that she exports to US.
EVer seen the actual poverty in india ?
Not a pretty site. The privledged live large while the rest suffer in silence. Thats the Obama / Zakaria plan.
The European Union, not the US, is China's biggest export market, and China is making serious inroads into the emerging economies that will dominate the global marketplace in a decade or so.. If the EU can pull itself out of its current financial mess, that market, too, will continue to grow. Barring unforeseen changes, China will be the world's biggest economy sometime after 2016, with an internal consumer base that will dwarf its American and EU export bases.
Fareed Zakaria will say anything to advane himself, I would not pay too much attention to what he has to say.
l agree with AGuest9 comments, war is not cheap and we all gave the GOP a blank check to free.
"
I agree. What is this "hands-off" policy wth the Bush administration? The same people who are ready to "impeach" Obama sat through eight years of what brought us to this point! Where was the outrage then? Everybody was too busy waving flags and saying "Go get 'um, Georgie!" So, bin Laden was captured under Obama's watch. Still, the rednecks and the aristocrats aren't happy. The money is gone. It's spent. We now have a larger deficit than before. Amazing how it's the sick and the elderly's fault!
How many hundreds of fathers, mothers, brothers, sisters and sons and daughters did we bury? How many families have a void that will NEVER be filled? How many children will never know their mothers and fathers? A Chinook carrying the brave men that captured and killed bin Laden was knocked out of the sky. More dead. For what, now? We keep sending lives and dollars into that pit called The Middle East because George said so? I'm not buying it – but the Chinese are certainly paying for it!
"
Zak, is a Globalist, member of the CFR and is pushing an agenda for the power elite. It's pretty easy to see he's again, trying to push the "All is well" button as well. The overall agenda of the World Banking Elite is to bring about a One World Currency, controlled by the BIS. Having the BRIC nations screaming for a new reserve currency, is playing into the IMF/BIS' hands. And good ole' Zak is there to push that agenda hard. But I don't know why I'm sitting here trying to educate the sheep. Really need to wake up people....see the forest through the trees...ugh
Why does Fareed Zakaria keep being defensive about America's debt? Having lots of debt just can't be good. The American system is just broken and maybe outdated. Maybe we should try to learn from the Chinese. Even S&P has thrown out the big stick. What the Chinese press are saying is irrelevant. We need to swallow that bitter pill now – higher taxes, cuts in government spending – or Fareed may soon find himself working for the Chinese press.
As China builds consumers, and republicans destroy out consumers, there will come a time when China does not need our consumers, they will have consumers of their own. They are a billion, we are only 300 million, not all consumers, and a shrinking consumer base. They wouldn't all have to be $50K a year consumers, just middle class consumers on their scale. China is still predicted to be the #1 economy, with authoritarian capitalism, while our democratic capitalism is not doing too well. We have no growth, most predict no growth, while China gets double, or near double digit growth. The tea party tried a bit of authoritarian capitalism, my way of the highway, or more like, we will ruing the economy if you don't, it didn't go that well, lost trillions in just a few days, much more than the tax breaks to the rich themselves. Authoritarian capitalism might work well, if the top dog knows what he is doing, you can't just put anyone in charge of that, certainly not the tea party. As China becomes the top economy, we will dance more to their tune, we will just be a non-player on the economic front, military, diplomatic, we won't count, and our economy will get down to next to nothing. Sure they don't matter much now, but slowly and surely, they rope it all in, catching a few off guard and complacent, saying we got China just where we want them. Stil they don't say that China will not be the #1 economy, and all the trappings with that. With no US gdp growth, it's likely to be sooner than later, all the economist are now re-doing all their projections, it might be by the end of next week that we fall down below another superpower, an also ran, down in the pack, maybe 3rd, maybe lower, but all along, we will have China just where we want them, got them on a string. Just fell into our cleverly designed trap, we don't grow, and they grow like hell, they fell for it hook, line, sinker. We are so clever, we're # 2, we're #2, rah, rah,............we're #4, but in our hearts, still #1, nobody else sees that though.
China is an ancient country, with a large working bureaucracy, and long term planning and goal setting, long before the US was ever populated by Europeans. As a result, while we think in terms of what will happen next week, next month, or next year, they look down the road several generations. They are planning for 2020 and beyond, for the country and power their children's children's children will have. One step at a time. China has absorbed massive invasions, revolutions, and natural disasters, and keeps moving on, rather like the lava from a volcano, it moves, so slowly, absorbs or envelopes all in its path, until it reaches the sea, where it becomes new land. China is growing, and spreading, slowly, quietly, inexorably, and will eventually take over the world, one store at a time. The American consumer is just speeding up the process by 'saving money' today, and helping pave the way for a future where North America is dominated by, and perhaps ruled from, China. And we won't even know it has happened until it is way too late.
To put things in their proper perspective, imagine if, during the Cold War, the USSR had amassed over a trillion dollars of American debt. They would have had tremendous leverage over us, better than any ICBM. China is not a declared enemy, as much as the Republicans try to make them into one. If they succeed, and China decides to pull the rug out from under us for political, not monetary, principles, we are properly doomed. China is the world's biggest creditor nation, with plenty of reserves to cushion the blow to its people; America is the world's biggest debtor nation, and would be ruined, our global credit score probably dropping by too much for us to compensate for, given the Tea Party-style obstructionism in Congress today.
Mr. Zakaria still doesn't understand the world at large. I suggest he stop writing and take an extended vacation spending a year in every country he can possibly visit. Maybe he will finnallly understand government propaganda and how it can be used effectivly in deceiving the masses. In China, he will find that the government wants the people to think that America and capitalism is bad and has failed. Strange that he doesn't get this, he has been practicing it here in bulk lately.
wow, so correct !
He's not talking about what China says... he is talking about the operational realities behind what China can do. And he is dead on. China needs us just as much as we need them if not more.
The difference is that they are still a Communist country with an authoritarian government and in case of an emergency can and will take any and all means to control things. It's more than Tienamen, they can tell their business elite, "We do thing this way now..." with no question to obedience. By contrast if the USA does free-fall into a true depression, our "Rich Elite" will fight like a stray animal captured by an "Exceptional" person facing it's 20th daily "Temperature reading" on any and all socially progressive measures, by knee-jerk, even if it benefits them in the long run and costs little or nothing in the short-term.
Frankly, China's doing everything it should. The outsourcing that cheats the American his wages? All that technology, from the computers to manufacturing is then copied, worked on, re-used.
Marx should have been a Chinaman ala non-pc "Yellow Peril" stereotypes
"Flom each akkolding tu he abirity, tu each akkording tu he need!"
"Da last kapitarist sharr sherr us da lope with which we sharr hang him!"
A evil marriage what fun..
The Chinese citizens could always buy their own goods which they produce instead of exporting it to America. Seeing as there are over a billion of them. As the Yuan appreciates in value when the Chinese stop subsidising the US government, the Chinese will be able to enjoy the fruits of their labour even more so since they Yuan would be able to buy more goods for less Yuan.
American companies, with their greed filled obsession for cheap, exploitable labor along with America's unwillingness to pay for what they buy, ex. (too much unsecured consumer type credit for individuals and taxes too low that they don't pay for the country's needs) has give China all the tools necessary to dominate the United States and relegate it to being a second rate country full of violence and poverty. They can do this without firing a shot.
It is going to happen anyway – the economy in China is faltering just like it is everywhere else. When they can no longer support the drag of the US, they will cut us loose – they will have to or their economy will crash and burn just like ours. They are just playing a game of "chicken" with the other debt holders and I'll bet they win by divesting first. In the end, there is too much debt to crawl out from under and everyone involved will eventually lose – the US taxpaying citizen most of all.
Why is this clown (Zakaria) harping on China AGAIN? He must be Indian I guess. WOW, look at that! I guessed correctly. Pretty sad that CNN allows an Indian-American to report on China their Arch Nemesis.
You can thank Mr. Rothschild and the family for getting us in this bloody mess. 150 Years later, justice still hasn't been served.
Which is all the more reason why America needs to stop borrowing. If we did, we would get back much of our manufacturing. This is a lethal combination for America.
Do you ever think rationally? This is the chicken and the egg argument. How does China get $1 trillion to lend to us?
And why does a country that has it's own currency need to borrow it's own currency? Maybe, "borrowing" is not really what it seems.
Have you EVER posted a pro USA article? Where did you grow up? What qualifes you to post these opinions of the USA? Iam not being sarcastic, but where did you come from and what are you qualifications? You phote appears that you are at most 35. This give you the judgement and wisdom to comment on such heavy subject and be believable?
I have been complaining to CNN for months to no avail ... he must have some dirt on CNN or his dad owns the network ... obviously something like that as he is not the sharpest tool in the shed.
Did you just see his face and read his name and automatically figure he was anti-US?
Or did you read the article? Can you even read? Which portion of it was anti-US?
Unfortunately you are about a year late in reporting on this story. Glenn Beck has warned about the economic crisis here, an in Europe. He also explained about our global economic Assured Mutual Destruction, even though you only focused on China. Either you ripped off the story or you are way behind on the issues. My thought is it is the latter. Way to go, ....
Zak, & other commentators here are placing to much faith that a rising yuan would weaken China. The Chinese will change the Global Monetary System as we know either through SDR, Bancor, or simply Gold & Silver metals.
In fact the faster the yuan increases great. China will undergo a period of economic growth with Chinese citezens purchasing Chinese goods & services that are not going to be exported with a rapidly rising Yuan but consumed domesticly by savings that appreciate. Americans after WW2 had the highest wages, strong domestic consumption, strong exports, a currency that was strong secondly it was redeemable in gold & silver to other central banks; which are net buyers of monetary metals today.
The US dollar falling gradually or by way of free fall is a positive for the Chinese citezens, et government. Not a negative, there would be no massive increase in unemployment. Exporters would shift to selling consumer goods to the richest middle class due to a rising yuan this world has ever seen.
"The billions of dollars China has invested in the flagging American economy will become worthless. They will have to negotiate the exchange rate to the new amero. This will then force the creation of the North American Union."
http://www.bigzinky.com/verity-obscura/the-amero-myth/
Well, actually the European Union is now China's largest trading partner... not the US.
China could keep growing quickly even without the United States since it has much more important trade agreements with Russia and almost every growing country in South-East Asia
Who is this Fareed Zakaria guy and why does CNN give him so much status? I never heard of him before, but every Sunday he's there to "comment" or more like criticize America.
crumbling empires give anchors lots to talk about.
Is he an anchor or a buoy?
If anyone would listen to Glenn Beck he explained this in much more detail years ago. Oh right Beck is crazy but Fareed Zakaria is sooooo smart...lol... next Zakaria will be telling you to buy physical gold and silver like he just figured out that the dollar is getting inflated to trash.
glen beck is an actor and or crazy.
Right...so Glenn Beck is an actor, but when the great Fareed Zakaria says the same thing, dumbed down, 18 months late he's brilliant... do you not see how biased you are?
He's braised not biased.
The sad fact is that everyone is living in a fantasy land about the problem. In example, the surplus in the 1990s was imaginary – we added to the national debt every single year since 1957. The "surplus" came from borrowing $ from about a dozen different government funds including social security.
We borrow around 46 cents out of dollar that the federal government spends and the recent debt deal will still allow the national debt to nearly double in 10 years.
If you owe the bank $10,000, the bank owns you. If you owe the bank $1,000,000, you own the bank. It is all a matter of scale. Zakaria is absolutely right. China not only needs us, their entire financial survival now depends on us.
China need US? China OWNS the US!
The only reason hold so much USD is it needs it for foreign reserve. China has to pay imports for oil,food, copper or imports from other countries including US and ***pays USD to US companies***. Whereas americans pay China imports with USD. No need for US to hold yuan as currency reserve.
We cant just buy everything we use with money we don't have. We need to bring back the manufacturing and show the world why we are called Americans. Zakaria alone can't come up with the solution for the the mess we are all in. Lets not forget we help created it too.
you are called Americans because you cant be called united statesins
"We cant just buy everything we use with money we don't have."
Yeah we can...and we will...continue to do so.
china already won. they are the new king,
All hail General Tso! Yeah, that's right, they've given us heart disease in the process too – bad, cheap, American-ized Chinese food subsidized with MSG.
China has to pay oil and food imports in USD
China owns only $1 trillion out of $14 trillion of US debts. The US government owns most of the rest.
when did you fall on your head?
It's sad but true that the U.S. government is too clever while its citizens are clueless. Its nice to know that someone intelligent in the media finally reiterated what I've always known but wasn't the most fashionable way of thinking considering China's is the current fad.
Zakaria may be correct in the short term, but his analysis is exactly that – short. The rest of the world will be more than capable of taking over for the American consumer. China does not need to worry about who is going to buy all their goods long term. Chinese themselves, emerging markets will more than compensate.
USA is in a horrendous situation. China and the rest of the world are desperate to get out of the dollar. Things are happening now which are laying the framework for the end of the USD reserve status. Countries are trading in their own currencies, IMF has been quite open about ideas for replacement of the USD, even China is taking steps right now to make the Yuan a global player – you can open a Yuan-denominated bank account in NY and LA now. You have to start somewhere, here it is. USD reign will not last.
it is over
@A,
Europe is 1/3, US is 1/3rd. Take away 1/3 of your income and see how things go.
peoples, who has a house made of the glass, do not throw stone to others house !
please tell the leaders and media to go collage to learn about world economics please
they couldn't infiltrate like they did Us, they were to smart. They now have a Big army and a Master plan. the Give us hints, only the Ones that know what to look for can see Them and They're everywhere. be Prepared and keep Secret but Spread the Truth, their EyeS see everything. LWO
What happens if China shut down GDP export and import in America?
America will declare greater depression. It's hard to get material and goods from china. America have lack of natural resource in order to stabilized the economy. School, post office, business, other small businesses will not stay open.
@Terry,
Where does China's citizens get all of their purchasing power from? Jobs dependent on lazy American buying cheap garbage.
Do you really think the BRICs will keep China's economy afloat? they all follow the same "export cheap" road to prosperity. Africa perhaps? Dream on. The Chinese century has turned out to be the Chinese decade, they should get used to doing what Washington tells them. War is also the quickets way if China's gov't decides to commit suicide.
What I wonder about is who Americans will blame if suddenly all there wealth is wiped out due to hyperinflation.Already there is a huge underclass of angry,disenfranchised, unemployed people.There is little if any confidence in the political system.Already you see politicians emerging that blame everything and anyone. I'm poor because of liberals because of gays or because of foreigners, I'm a good Christian did everything right in my life but now I'm eating dog food.History teaches us that nothing good comes from being in such a position.It can have absolutely disastrous consequences.Weimar Germany is probably the closest comparison and we all know what happened with them.What the world needs is for America to get it's act together and start working again.China should help the US instead of encouraging the self destructive behavior.
"China should help the US instead of encouraging the self destructive behavior."
How I wish we have "Chinese leaders" who have the market wisdom and continue buying the T bills disregard public disproval.
"Why China can't stop lending $$ to America"??? Why can't America stop borrowing from China? America's greed and financial mismanagement is not China's responsibility..
America's greed? Excuse me, but who are letting their workers be paid slave wages? Who give their workers no benefits?
Newsflash: It's not the United States.
You are also forgetting that China has been widely rapped in the news and elsewhere for undervaluing their labor, keeping their currency value artificially low, etc.
It's called strategy...have you not read the Art of War?
You're still thinking of China as it was 30 years ago. Read a book about modern china and those stereotypes will vanish. China will pass America in 2016 to become the world's largest economy. You don't accomplish that with slave labor. China is moving into the middle class with a vengeance, and in a few years its citizens will be buying more consumer goods than the US and the EU combined.
Did you honestly think America was going to stay in first place forever? If so, here's something to meditate on: one hundred years ago Great Britain was the world's greatest power, the richest country, the pound sterling was the global reserve currency, and Britain had an empire upon which the sun never set. Now look at Great Britain today. That's America's fate unless we accept that we've had our time in the sun and treat China the way GB accepted America's domination after WW I.
Zakaria has a very compelling argument, but one scenario he did not consider is one in which China weens themselves off of their dependence on exports. China has a huge population– one which can vastly overshadow US demand for Chinese products. If consumer culture in China were to develop to the same degree as in the US, exports would become only a small portion of Chinese GDP. GDP would be driven by internal demand. At that point, China could allow their currency to float and it would appreciate astronomically. Inflation would occur in the US as products become more expensive and the US would become relatively poor in comparison. For companies manufacturing in China, they may begin to consider manufacturing elsewhere as costs rise. However, this would not necessarily hurt the Chinese economy at this point since much of their demand is now supplied internally.
China is already working on developing their consumer market. BTW if you've been to Beijing or Shanghai recently you'll see more Bentleys on the road than anywhere else on the planet. If you've checked the stats GM sells more cars in China now than in US.
This is not necessarily a bad thing. Its isn't just US corporations, but individual Americans can prosper as well.
The key is to get rid of our debt overhang and get back on track, and do it quickly. Everyone likes to criticize our banks (and rightly so, 2008 was the result of almost unimaginable greed and stupidity) but China does not have a very good banking system. They don't have a good research system either: no country on the planet has a network of Universities that do basic research like US does.
More Zakaria blather
Good point "USD", US can leverage on the security of the US dollars which is widely accepted as the secured currency in the world including the Emerging markets are all hungry for us products. US need to get involved more in Emerging market.
Ah, but the Catch-22 there is that we are not able to do that because American items are more expensive than Chinese/Indian/etc. made stuff while NOT being of much higher quality. I'm not kidding with that either... I compared two items made of the same stuff, made using the same processes, etc.: one made in the United States, one made in China.
BOTH were of equal quality or so close that I couldn't tell the difference.
China charges 25% import tariffs on American goods while the US tariffs on China are scant. They buy our treasuries to make sure that their currency stays low – treasuries that increase in value for them, at least considering how relatively flat they keep the yuan, as the US dollar inflates (like it has been doing to an insane degree for 3 years now). Trust me, China is not as worried as you might think about our economic troubles. The Chinese gov't has not stopped and will not stop buying treasuries unless we show signs of actually defaulting – it's just too profitable for them.
An aside – now is definitely not the time to buy gold. Its value has almost gone up 10x since the beginning of the 2000s and even if it does go up a bit for a few years I can guarantee that it will never go up that degree again. There is no such thing as an infinitely rising commodity – remember the housing bubble? If anything I would be selling if you've had it for more than 5 years and stick it in a savings account. Why do people constantly think that it's a good idea to buy high and sell low? Most people should be able to realize that the common opinion makes no logical sense, at least if you're in the business of making money.
When comparing the youths from the 2 nations, I doubt that we will end up the winner.
Dear Mr. Zakaria,
You say “The economic situation between China and the U.S. is the financial version of mutually assured destruction – that cold war doctrine of nuclear deterrence. If you destroy me, I will destroy you.”
You also claim, near the end of your article, “So ignore all those theories about China doing America a huge favor. The reality is, they have nowhere else to go. We're probably doing them a favor.” But doesn’t your statement tie back into the pettiness of: “If you destroy me, I will destroy you.”
I understand your frustration, and I as an American am prone to this frustration as well, but today the world is locked into an integral system through globalization. So the idea that “We’re probably doing them a favor” seems to me to be shortsighted. After all, we our responsible for buying, by far, the most Chinese goods but doesn’t this then mean that we are both doing each other a favor?
More importantly the U.S. and China are just players in one big system, for them to put all the blame on each other for economic woes is akin to a person stating that inner city schools, in the U.S. for instance, are chiefly responsible for low test scores throughout the country. In both instances a vast amount of information is left on the shelf in order to simplify the problem. But how can the problem be understood, and solved, if a large portion of data is not accounted for?
Martin Wolf, chief economics commentator at the Financial Times, says “Consider then a world in which the US was not one of the world’s countries, but a global federation with equal voting rights for all. Far greater resources would then flow to the poorer regions of this imaginary “world-country,” to finance infrastructure, education, health and the machinery of law and order. …While everybody should be better off if countries combined to provide global public goods, it is normally in the interests of individual countries to let others bear the cost.”
Mr. Wolf seems to be saying what many economists around the world are coming to, that business as usual will not alleviate the economic crises of today. The world is too interconnected for the U.S. or China to calculate just how they will alleviate their own problems. If they do, the system becomes more imbalanced by their failure or unwillingness to consider how their actions will affect the global economic system.
What if China buys assets elsewhere instead of treasury bonds of some country. They are already buiying oil companies, Oil fields in Africa, and ports in Europe and Asia. They can intensify buying strategic assets with their trade surplus dollars, and reduce on T-bonds. The reasoning that China has nowhere else to go than T-Bonds may probably be a myth believed by too many powerful people.
I would rather pay more for an item, keep it longer and have it made in the U.S. We are missing a huge section of middle class income by not making more items that we use every day. Those manufacturing jobs enabled many people to learn a skill, better themselves and move up in income...not to mention all of the industries that support the manufacturers with raw materials / office supplies, etc etc. I resent the fact that most of the items that we use every day were manufactured in China – and shipped here burning oil on a huge polluting tanker. Seems that we gave away our middle class to help make the Chinese move into middle class. I realize that the trade issue is not simple, but we need to take care of our country first.
If you "keep it longer," you're not much of a market are you?
Good point "Ben" The question now is, how can we balance the budget ? Zakaria said put everything on the table and l agreed with him.
Lets not get emotional about the budget cut. everything to the table.
"
Zakaria is correct that China is really backed into a corner by running consistent trade surpluses. That surplus causes their currency to appreciate, and the Chinese have to flood the market with Yuan (i.e. trade them for other currencies) to counteract this force. Unfortunately, no market other than US debt is deep enough for the volume of purchasing China must conduct. We really do have them in a tight spot, and it would be even tighter if we could resolve our budgetary issues and stop lending to them. What would they do then?
"
Mr. Zakaria I would like to point out several inaccurate statements in your article.
First, the EU is the biggest Chinese export market, not the US.
Secondly, China has shifted its focus from export driven to domestic consumption and investment. Although they are big exporters the Chinese are using their foreign reserves to build cities, trains, airports and a military.
Lastly, you mention all these fiat currencies as alternative investments but fail to mention gold which is rapidly becoming the world reserve currency again. The total value of the worlds gold is close to 3 trillion. As the dollar and euro fall against real assets savers will turn to gold as a store of wealth. In fact it is already happening with gold touching $1800 this week.
China and America are still very much intertwined, but you would be surprised how well China can muster without 20 billion per month exports to the US.
Its not China. they are already feeling the backlash from the economic woes of this country. They have too much to loose if they try to destroy us. And you know it.
The trouble makers are countries such as Fareed Zakarias home of origin.
There has been a economic "game" going on for a little over a decade. And that is China intentionally buys our dollars (becomes our bank and lends money to the USA) to artificially keep their currency value down. This is NOT playing buy the economic rule book. Due to supply and demand the prices of goods, labor and the value of money is suppose to go up and down. But when China buys the USA's dollars...they are artificially keeping their currency undervalued.
This is why their products have been able to remain so cheap...for so long. It is not just their low labor rates, lack of overhead costs (such as pensions/social security, healthcare for citizens, lack of environmental rules). The game of keeping their currency depressed is like artificially keeping labor wages down, or by the government commanding that prices be set at a certain level.
The economic "game" gets out of proportion when the law of large numbers comes into play. Now China has to buy billions of dollars of US currency every month just to keep their currency down. All the U.S. needs to do is keep printing money, and China if the choose to keep growing through exports will have to buy our cash...it is a free ride (but a dangerous one) for the USA.
China is a command economy - they are NOT a free market economy. The government pronounces they want millions of miles of high speed train track laid within 5 years and it gets done - with no regard to safety, environmental rules, etc.
The Chinese government commands they want 9% GDP growth for certain cities within China and it is the local governments responsibility to make it happen..
How do you keep growing though at 7 – 10% a year....you can't do it forever. So you are seeing some very bizarre things in China. A great way to grow GDP is to build housing (i.e. what we did here in the USA the past decade). It takes lots of money, requires lots of purchases of steel, plaster, etc...and you are able to grow GDP quickly by building thousands of homes (yet entire cities). BUT - there is NO ONE living in them. Type in "China Ghost Town" or "China Ghost City" into YouTube to observe.
China gets out of this by getting their citizens to buy and consume. 70% of the USA economy is lead by consumption (US citizens buying things). China needs to start having more of their economy be lead by consumption - and not exports.
Though I am scared for the USA...we actually hold a lot of the cards. It is much like when Donald Trump couldn't pay for his real estate holdings - he ended up being ok. There is a saying that goes something like... If you are overextended in loans, the bank owns you. But if you hold most of the loans of the bank, you own the bank.
Is Fareed Zakaria a Jihadist incognito?
Not so easy. America is not safe by a long chalk. The simple truth is that even if currencies equalize and the US dollar falls, US manufacturing is practically non-existent (after decades of outsourcing to lower cost countries). So even if the US dollar becomes cheaper it will take a long time to rebuild factories and create an efficient, modern manufacturing base.
True for some industries, but you mean to tell me that Coach can't make a stupid handbag here in America?
Puhleez! They were founded in New York City for gawds sake!
Missa Fareed, why you no wear turban?
Who cares what a terrorists thinks of what China's opinion is.
Good piece Fareed. It is rarely pointed out that China buys bonds primarily to maintain it's currency manipulation game. Not because they are dumb enough to think it's a good risk reward bet. The Chinese bloggers are right, they should stop!
The crucial next step is to admit the currency manipulation scheme has a purpose as well – kill off American (and Asian and European) industries one at a time in order to grow China's list of monopolies. Cheap labor is NOT sufficient to make it economical to ship steel or drywall across the Pacific. It doesn't even justify iPhone production because labor is a small factor there. Currency manipulation driving the price of Chinese materials down 40% and thereby buying US bonds to support that is key to gutting Americas jobs.
We need to stop funding our own demise. As you note we are paying China interest every second. Why? To keep rates low. Four years of that have done NOTHING because bankers do not want to invest those cheap dollars in America. We don't need cheap capital that goes abroad or sits in banks we need to keep our jobs!
Stop selling bonds to China or any currency manipulator. Rates will rise. Thats OK if we pay the higher returns back to Americans and close this leakage.
Greg Autry, co-author of Death by China
i JUST LOVE THE COMMENTS WHEN ZAKARIA HAS SAID....."This is a huge hypothetical " He is playing make believe so the entire article is bogus!
Why is this foreigner saying "us" like he is an American?
Mr. Zakaria: You are misinformed
In your analysis, you miss the fact that, whether through CIC, its State-Owned enterprises, and even its privately held conglomerates (who have access to Government subsidized loans), China is acquiring land, copper deposits, lithium brines, and in general, everything that means access to the world's natural resources. And they do this for strategic as much as for financial reasons. China going outbound is perhaps the largest portfolio rebalancing exercise ever carried out in history. If current trends continue (China outbound M&A activity to the tune of $90-100bn/year), in 5-10 years China will have divested the majority of its Treasury holdings, will have secured dominance in the world's commodities markets, and will have hedged its savings portfolio against the expected structural depreciation of the USD. While your analysis is partially true, it is also incomplete and short sighted at best.
Best regards,
JB
Not once was the Chinese consumer mentioned. The escape route for China is to slow down the US treasury buying and the same time, increase internal consumption. This will happen, but slowly and surely, it will happen, because staying with the alternative, the US dollar, is catastrophic.
No, we do NOT need to "cure" ourselves of debt...we need to CURE ourselves of BUYING GARBAGE FROM CHINA! Go look in the stores...Almost EVERYTHING is "made in China". THAT is why we have no jobs here and our economy is in such bad shape...we are sending TRILLIONS of dollars to China to pay for all this stuff. DON'T BUY CHINESE-MADE GOODS! The government should STOP giving tax breaks to any companies who import or sell non-US-made finished goods, and slap a 100% import tariff on all these imports. More income for the government, more jobs for Americans. Let's bring back "MADE IN USA"!!!!!!
Well, there 70% – 80 % of americans like "Made in China" They are extremely huge fan of "MADE IN CHINA". Americans have Iphone, imac, nintendo wii, etc... They love "MADE IN CHINA"!!!
They like those things because the things made in China are of comparable quality (and much less cost) to things made in the United States today. Now, should the United States be using our dollars to encourage China to put into place environmental protection laws like we have? Yep.... punitive tariffs for things that come into America from China that are not made in an environmentally friendly way would put us down the path to that.
Help me on this. if i remember right we, the USA started outsourcing manufactured goods decades ago. It began to be too costly with the UNIONS grip on business. As the unions demands for money and being able to sit around and get paid for nothing, that added cost was passed on to the consumer. So, if business could not satisfy the unions, they go out of business. They had no choice but to go to Asia for cheap labor. Canada, India, Mexico is included. Not just China.
Its bigger than just one country. When did NAFTA start
NAFTA is irrelevant, there are no tariffs on weed and coke.
Ha
I've been predicting this for years. The COMMUNIST CHinese do not care about their economic problems. They are out to destroy us buy selling us enough rope to hang us with that very same rope. Yet, the corporations just can't get over there fast enough to hire their workers at dirt cheap wages. Our politicians can't "kowtow" to them quickly enough and our govenrment can't spend us into oblivion fast enough.
Our nation has to get its finances in shape. Bring the jobs home. Re=build manufacturing in this nation. Allow businesses to create new jobs. If we don't? Then we are doomed.
Yes, let's create the smog and pollution necessary to resurrect the manufacturing sector and bring back the "local" economy. I'm in.
II will accept some smog if AMERICANS are working. YOu'd prefer we all just work for the government in offices producing nothing but paperwork. That is what has us in this mess to begin with.
With all due respect, we don't need to bring back smog and pollution. Efficiency in the manufacturing industry has gotten to the point where solar power (almost totally clean once the manufacture of the solar panels is done) could supply their power needs.
stop buying products from China.
I'd like to, but America companies won't let me, because they make everything there.
the yuan and USD is FIXED and pegged to the USD and is not allowed to be traded in the forex market so accusations of forex manipulation is HOGWASH. Central banks cannot control the value of their countries value in the international forex markets which are determined by international banks who float it. All the banks are involved in currency trading but cannot trade the YUAN in forex market like the USD or other currencies that not fixed rate
How do you think a peg works? In an export oriented economy that's not a GDR-DDR style "we say 8 Yuans are 1 Dollar" kind of proclamation! Whenever the Yuan is under pressure to appreciate, the Chinese buy Dollars and put more Yuans on the market (i.e. they increase the supply of Yuan on the market)... that's the manipulation bit because on a free float, no one would be there to "support" the currency.
America were suppose to INVENT... Not grabbing wages like PIGS.
I didn't read the article, since I have never previously been very impressed with any of Zakaria's opinions. I don't understand why CNN keeps giving him such a prominent soapox.
China is an investment and consumption led economy, not exports.
Exports is 25% of China's GDP and 20% of that is to the US.
Exports is also 25% of Canada's GDP and 75% of that is to the US.
Canada will collapse LONG before China does.
Exports are 36% of South Korea's GDP.
Why does no one say "lolol South Korea doomed"?
In fact, the BEST THING EVER for China, would be for the US to default.
Yes, we'll lose 1.4 trillion in paper wealth. Then the US will no longer exist. The implication of default is social program cuts. Imagine what the 32% of the US that's Mexican or black, uneducated and heavily armed will do, when the welfare checks stop coming in?
But the USA will collapse LONG before Canada. At least Canada has natural resources and primary sector manufacturing – logging, gold, diamonds, oil (tar sands), natural gas, fresh water reserves, AND functioning social security, health care, and intact civil works infrastrcuture.
BTW, did I mention they have the lowest debt burden in the G8? You're just jealous.
Central Canada produces more vehicles each year than the neighbouring U.S. state of Michigan – the heart of the American automobile industry. Manufacturers have been attracted to Canada due to the HIGHLY EDUCATED POPULAITON with LOWER LABOR COSTS than the US. Still think Canada will collapse?
Keep outsourcing to China and keep dreaming about creating jobs in USA
I agree, Zakaria is nothing more than a very good talker. I'm from Canada and from an objective point of view, he merely makes arguments to stoke anti-Chinese fearmongering, like most of the media. I saw him in a Monk debate in Toronto and it's obvious he is supports creating a new "cold war" between the US and China, like most of the media, because there they need to blame someone.
The fact is that China is an emerging super power. That does not mean it is game over for the US. It means we, in North America, need to change our education system, create a more skilled labour force and yes, increase the production of goods and serviecs that the world buys. No, it does not mean we need to put more tariffs on products created in Asia or call out the Chinese as the next boogey man. That isn't going to help us in the long term.
Idiots like Zakaria are just pandering to popular media ideals of creating tension between two of the world's most important countries, who are probably going to just end up being two of the world's largest trading partners and live a peaceful co-existence as these two governments try to do the best for their respective citizens.
Creating an "us versus them" mentality isn't going to change one thing. Zakaria is only good at painting the Chinese as the enemy, which is funny since he's representing himself as a "true American" when he is from India. The two economies of China and US have had a very successful and beneficial relationship for a long time now, while India has lagged because there are too many Indian companies that are fraudulent, undependable, or untrustworthy.
Zakaria doesn't propose any practical solutions. It's time to stop complaining about China (because it's obvious, that isn't helping) and start figuring out how to compete with China (on an educational, economic and fiscal restraint perspective). Yes, there is painful medicine in store for us to rectify the debt situation, but we have overspent, plain and simple, based on military, social and govermnent infrastructure). It's like a household that is $500K in debt, of course you are going to have to give up some items you are used to spending on every month. The US needs to raise some revenues and also cut spending. Polls have shown that most Americans already know and support that we need to increase some taxes for the rich, and cut government spending so that this out of control spending situation is rectified.
China does not play by the rules of economics. It wants to be a power but controls it's currency fluctuations and is a communist state. In the free world with free trade you have to play by the free world rules. It wants to become a power by using dirty games in economics. Lowest wages for workers, child labor, counterfeit products, corrupt laws, currency controls and all the other outrageous misdeeds. Then it wants to lecture the free world. China is rated AA- by the S&P. GO FIGURE.
The creditor (china) has a lower rating than the debtor( the US)..there is something wrong with all the US credit rating agencies.
He is giving you informed and researched opinion. He was born in India but educated in the best Universities of US. He has lived here for nearly 40 years. Remember this is his HOME and he is not trying to destroy it. By the way he is a Muslim from India. Does that mean he is trying to destroy USA & India and help Pakistan? You need to take a chill pill.
He is neither anti China or anti US. It is beyond your thought process to understand his comments. Get some more education & you will understand his explanation.
Very Interesting comments all..
See we all agree with have a problem, lets fix it together.
Thanks Zakaria for getting everyone talking again. Welcome back all to the new CNN " Were educated people communicate and others follow"
How about write to GOP that you prefer all toys and electrics should print "Designed in the U.S.A.; Made in China" ?
There are AMERICANS and GOP out there like "MADE IN CHINA" labels. They are super and super huge fans.
Peter Schiff offered a great analogy about 6 Asians and an American washing up on a deserted island, they all take on a task, one makes a fire, one fishes, another cooks etc. At the end of the day they complete a meal and the Americans job is to eat it. When asked who the most important person on the island is the American explains "it's me! I keep everyone working!"
This is essentially the logic the donkey that wrote this is arguing, it's incredibly wishful thinking.
What WILL happen (and has been for months already) is the Chinese are allowing their currency to slowly climb and while American exports will drop their own people will begin see an increase in their own purchasing power. Much like the Asians on the island they wake up one day and realize they might just rather have the meal themselves.
thanks to the incredible failure of obama china owns america and can do what they please with it...
Hey, you got the attention of the freakshow MMTers over at pragcap!
Way to go.
Zakaria's article is cognitive dissonance at its finest. China is doing the saving, producing, and more importantly, the under consuming, and they're not doing us a favor? Way to spin that one. Despite what Fareed may say (which is nothing but a rehash of globalist propaganda and the opinion of the PHD ivy league “hocus pocus” economists) China should have backed out of their currency and trade policies years ago. These policies have created major structural imbalances in the Chinese economy, which are going to have to be addressed; regardless if China likes it or not. This nonsensical idea that China has "no choice" is resulting in massive inflation as they monetize our huge budget and trade deficits. What China needs is to allow their currency to rise, stop buying U.S. government debt, pare their losses, and more importantly allow their economy to go through a recession and restructuring. America on the other hand is in for a world of hurt, as it will take years to rebuild our capital stock which has been severely depleted.
No 1 Winners: Capitalists in China and US
No 2 Winners: Working class in China
Losers: Working class in US
You are absolutely right. Corporate profits are up and all time high. Corporations are holding all their cash instead of reinvesting in this economy. They only invest overseas to hire foreign labor. Which allow the Chinese and Indian workers to benefits and their governments with tax revenues. Until we reverse this non sense, we will continue to go down.
Finally someone comes out with closer to the truth about China. They don't own us, the are addicted to us. They need us as much or more than we need them.
Here's problem in USA. America does not have CORE INNOVATION in 2008-2011. They ran out ideas.
So you guy bunch of greedy and extremely expensive unions steal disadvantage dreams away and turn into unemployment.
Why should China do a favour for US?
Comments:
1. The comparison of Economic “doctrine” and the Military “Doctrine” is not correct or appropriate.
Not only that economic policy should be a win-win that mostly based on the cost and benefit analysis, but also that we have no idea what exactly the economic “nuclear weapon” is as correspondent to the “nuclear weapon” in the military weapon technology? The invention of nuclear weapon in the 40s has changed the traditional weapon and military technology and doctrines. The MAD (Mutual Assured Destruction) doctrine is largely out of date and inappropriate to describe the cold war type or “zero-sum” game for US-China relationship…. We trust that Ted Koppel, David Brinkley, Eric Sevareid not to mention Walter Cronkite would use this analogy?
2. Do Chinese papers have the right to complain the devaluation of the U.S Currency?
Zakaria claimed that the U.S pays 74 million dollar a day to China or 833 dollars /per second. Or, can we say 38 million Chinese workers works one full year without pay, just because the 14% of devaluation of U.S. currency since Jan 2008 to August, 2011, less to mention of the collateral and consequential economic loss on the downgrade of the U.S credit?
Said that, Zakaria is part of the messy democratic process to the coming best solution….
Please call Obama and "ADVISE" him about this Fareed...
Perhaps the US shouldn't pay back it's debt to China. What is China going to do? stop shipping the US it's cheap toxic products. No Chinese made products?, I guess the US will have to start making things again. Sounds good....
Whatever. Sounds like an addict talking to me- weird contrived nonsense. I think the author included some quotes that inadvertently say it all:
After a drop in Shanghai's stock market, bloggers took to local social media sites. One wrote: "The U.S. suffered a downgrade, why did we become the biggest victim?" Another said: "It was a huge mistake to buy U.S. bonds with Chinese taxpayer money. We must hold those who are involved responsible."
It ain't about what we think folks. Get it?
Barry is way over his head.
If you voted for Barry Obama in 2008 to prove you were not a racist, vote for someone else in 2012 (anyone) to prove you are not an idiot.
That's right- this whole thing is just a problem that could be solved by the right guy in the oval office- no deeper than that. Right. Right.
When I was a child in Lyndonville, Vermont and I am a 36 year old adult now in Montpelier, Vermont...many of my toys were made in China, maybe even my Geisha doll on my fireplace mantel was made in China. My father or some one told me China has got to be rich from making all of these toys. I can not help but think that all of this bad media is jealousy towards China and that they actually just deserve our thanks for making so many things that we love. They were in our service in that way. Why don't we jut say "thank you"?
"the U.S. pays out some 74 million dollars to China in interest payments on debt every day. We did the math. That means Washington is paying Beijing 833 dollars every second."
HAHA, wut a 'HUGE NUMBER' to a 1.3 billion people country. Zakaria, u did a NICE job on math
He sure did. 74 million dollars per day = $833 per second ? Should it be slightly over $856 per second. They sure did their Maths alright.
Nice article Mr Zakaria. I completely agree with. China is not doing US a favor by buying Treasury Bills. They are trying to keep the value of their exports down, so that their goods always cheap. They are addicted to export based economy. They don't have any innovation of their own. All they do is copy or reverse engineer any thing that they can lay their hands on, which is why most of the US/European auto and other manufacturing companies are forced to share their designs with their Chinese partners. For Defense equipment, they have successfully reverse engineered airplanes and aircraft career of Russian origin. Nothing in their product line can be called their own. All they do is copy. I am surprised why they are not sued for patent infringement more frequently.
Here is what CHINA stand for:
C = Corrupt Government
H = Horror to
I = International, Chineese citizens
N = Never Trust the communist China on
A = Anything
Get You machine gun and stop all the republican and teabagger and White trash and evangelical Zionism to buy products from China in walmart. Go be a man ..
I still cannot get it, in personal finances it's good to reduce your debts and become the lender, for proving that we've the banks and what they do to the people.
Nevetheless, In governement finances, it's good to keep asking for more cheap money, increase the inflation to see the values of their debts reduced, and finally increase the taxes to the people, squeezing them like oranges to try to get out from the hole.
Honest to God, I cannot get it, we in America might become just consumers depending on other countries to feed us, I see a lot of our skill dissapearing just because the companies are moving their factories offshore.
Who in America will be able to create a motherboard to a computer?,
we might send students to China to recover these skills in in the future if we need it.
By the way, did the salary of the politicians in Washington is linked to the financial performance of our country
Yeap, I know, I'm dreaming!!!!
If China spent their dollar savings to buy goods then unemployment would drop, industry would boom and tax collections would rise. What a catastrophe. If they sold off the bonds over a few months the enormous bond market would hardly notice. Our country is worth 700 plus trillion and a couple trillion to the Chinese makes no difference... sensational politics.
It's all fine and dandy that they had to keep currency devalued. I agree with that. But riddle me this Mr. Zakaria, what happens if they announce a return to a gold standard and back up their money with only a little gold. Currency devaluation is what happens. Kinda puts a big hole in your argument doesn't it?
Why would we care if China went to the gold standard? They own USD, we don't own Yuan.
This article also same like any other articles of Mr. Fareed Zakaria, only to please brain washed Americans. How can an investment safe in bound with a country having more than 80% in debt? China is Definitely doing favor to US. US economy is in brink, that you have to accept.
What amazes me is ppl talking about economy as though they understand it.. half of the morons who ask me questions dont have a clue wats going on.. they know more abt what happened in jersey shore... there are no jobs.. kids pay more attention to teen moms and jersey shore... they dont know who the vice president of the US is.. and we have ppl complain abt economy.. and i ask why.. oh.. the markets down.. seriously???
We borrow from China to give Federal Aid to other Countries...Does this make any sense to you?
Fareed:
Usually love your show. However, last 2 paras shocked me:
"So ignore all those theories about China doing America a huge favor. The reality is, they have nowhere else to go. We're probably doing them a favor.
And by the way, in terms of who is paying whom, data from the Congressional Budget Office shows that the U.S. pays out some 74 million dollars to China in interest payments on debt every day. We did the math. That means Washington is paying Beijing 833 dollars every second."
You are talking about US paying China interest every second forgetting they are giving is 40-60 times more principal per second. Saying China does not have too many options may be fair. But saying we are doing them a favor is down right delusional & arrogant!
Lol, so us not purchasing trillions of dollars worth of goods from them is not doing them a favor??? Are you that delusional?
The real culprit here is not the chinese, but rather the American fools who complain about losing their jobs and owing china so much money, but where do they shop? In precisely the same places that export our jobs to china, places like Walmart (a.k.a. China, Inc.). I really have no pity on people who are so stupid they can't see two inches in front of their faces just how much they have sabotaged their own economy.
The government and many others tell us Americans to live within our means...and now this!! I believe it is time to stop worrying about other countries and start taking care of our own!! Stop borrowing and getting deeper in debt..stop accepting Illegals into our social security without working for i.e. getting legal citizenship and working for it like we legal Americans have all our lives and stop spending 10 million dollars a day in useless wars that do not need to be. Our founding fore fathers are literally turning in their graves at the non-sense this country has bestowed upon itself. Great job Obama and all the other worthless Government officials. The once Super Power of the world is quickly becoming a thing of the past and I fear that my Son's future will be very hard at the expense of such foolishness. American politicians are throwing caution to the wind at our expense!!
If have lost site about what this country was builded on. Surely not made in China or other countries. We aloud corporate america to send jobs overseas. So, if you think about it, we did this to ourselves. What one forgot about; if you continue to send the jobs overseas, who is going to be able to afford there product. Greed, became the norm, and now we are paying the price. Until we get back to: Made in America, we may never see that american dream continue to come true for our children.
Dear Mr. Zakaria, CNN Editors, and fellow posters,
In September of 2009, President Barack Obama signed a thirty five percent tariff on Chinese tire imports, following the lead of the United Steelworkers and the World Trade Council. This under-publicized fact serves as a strong example of how union activism still helps. It also demonstrates how important it is to have a Chief Executive in the White House who understands the reality being faced by millions of American workers.
Consider this: The three-year, temporary tariff President Obama imposed was the first such action taken by the United States in over a decade. That executive decision helped the blue-collar bottom line in an historic and meaningful way. Frankly, it may have saved many of our best-paying local jobs, here in Fayetteville, North Carolina. Critics called it ‘protectionism’. Realists—also known as people who feel blessed they still work for a living—call that kind of action ‘self-defense’. In the two years prior to the Obama Administration’s vital counterpunch, Chinese imports of cheap—and often low-quality—tires onto our shores had more than doubled. In that same period, five U.S. and Canadian tire factories shut down.
The direct result has been profound. North American tire industry workers—including over 3,100 Goodyear employees in Fayetteville, North Carolina—are now competing against over 18 MILLION LESS Asian imports a year that once unfairly flooded our markets, due to still-off-balance trade laws.
It’s hard enough trying to compete against slave labor.
Taking on China these days takes courage. Sadly, the worst offenders of basic human rights in the civilized world have become our primary source of credit, our defacto landlords, and—thanks to Wal-Mart—our number one employer… but they are NOT our masters.
The brave decision by President Obama to side with organized labor saved middle class jobs—and bolstered local economies—everywhere a tire factory still operates in North America.
We, the union-dues and tax-paying people in the “Made in the USA” tire manufacturing industry, are no doubt an endangered species, but thanks to the commitment of our Labor leaders—and President Obama's courageous fulfillment of his campaign promise to stand with us—WE AIN’T DEAD YET!
*****
—Gary Villani works as a machine craftsman and as co-captain of the fire brigade at Goodyear-Fayetteville. He also serves on the executive board of United Steelworkers Local 959, and as editor of their newsletter, The Local Express. In 2010, Villani suffered a broken neck during the rescue operation of a co-worker. He is continuing to recover.
Zakaria is VERY correct....................as Nostradamus wrote..............BEWARE the sleeping dragon!
All the us got to do is print the money,and over acouple years, pay off any of the debt. Money has to be printed or all the ecomonys will collapse, its pretty simple. Cash was never backed by gold, it was backed by labor. As long as the US companies keep accepting US dollars from other countries, the dollar will never lose it's value. Where has all the money come from that each country has, it has been printed under the illusion that it was backed by gold. When the world realizes that money has to be printed, and inflation controlled, then you will no longer see disease, famine, an evil on a rampage......the question is how long to get to that point.....you can change the world when the world understands the true gift of currency, until then, you will be caught up in your own illusions, sorry to say.
Henry Kissinger said that the U.S.A. needs to find common ground with China, find what it has in common with China instead of emphasizing the differences. This common ground is important to the U.S.A. in order to work towards China being a military ally instead of an enemy. The author has just pointed out one common ground-that of China's need for our T-Bills and our need to sell our T-Bills. Can we build more common ground from there?
I did the math too.... There are 86,400 seconds a day. 74,000,000 / 86,400 = $856.48 per second.
Just felt the need to point that out.
When you don't pay back your mortgage, yes, the lender loses, but you lose more – your house. US is not just owing to China but to many countries. They are investing money in US, buying US assets – and there are many other options. What purpose of this article is serving, to make us feel better about our own financial irresponsibility? or blame China? even if China forgives 1.2 trillion debt it holds, we still have >90% of our debts out there. We need to fix our own problem.
The world economy is based of usury, making money work instead of people. Money shouldn't grow on its own when no goods were produced or services rendered. The economy is run on debt. Just about every world religion has banned usury, there was a reason behind that.
china can just dump all it's 1.2 trillion US debt in the open market and buy euro other stuff. China US debt holding is it's foreign reserve. don't you get it. China doesn't need to forgive the 1.2 trillion debt. it just sell it.
It's the price the US government pays for it's MN Corporations greed to run to China and outsourcing all the jobs. So for the cheap consumer goods one gets, made in China, the US government pays China $833 per second. Where is the benefit for the average American in this ? Also the US MNC parks the profits from operating in China in tax free Hong Kong maybe and does not put it to use in the US. Only a handful seem to be benefiting from this !!
Hey Mr. Zakaria, you should take up a job with the Chinese government; you're pretty darn good at this whole propaganda deal.
pimco said it dumped all US debt for it's private clients. mostly foreign central banks or soverign wealth funds own US debt
China is taking undeserved advantage of US from all sides. Congress knows this fact but due to the big business corporate lobby and pressures, continues with the import policies in destruction of the US economy which gives advantage to the corporate profits. Free trade or open trade destroys US jobs but benefits US corporations profiting from Cheap labor costs. China's pumping of cheap goods in US is the main reason for US labor markets collapsing, which caused the tax revenues to dwindle and for the US to fall in to a depression. The trade deficits clearly shows we send our dollars and jobs to the China and India but they do not by 10% in return from US. This will never work unless we reverse this stupidity. We should have even trade policies. There should be some balance in import and exports policies. We should apply import taxes to make even the playing field for goods coming in the country.
In my opinion, Either China is doing favor to us or we are doing a favor to them,they are playing their chess well and advancing on multiple fronts for their citizens at large. We on the other hands are enemy ourselves -not solving any of our real problems and trying to find other culprits for our problems. What we need is open national debate on each problem and then carrying the best ideas into action – solution lies within us only but we are looking at others
All the lib media trying to divert the real problem. Let's discuss economy & how bad job the current president is doing. Let's focus on creating jobs for Americans. Time for lib media start criticizing the current leadership. Let's not worry about China.
We are doing this to ourselves. Everything we own is made in china.
If China did start selling US treasuries, causing the dollar to drop, it would be a good thing for the US economy. It would make imported goods more expensive in America, and it would make our exports less expensive around the world. That means that many more people in the US and abroad will *buy American*, which means more US employment and a better trade balance.
Some people have an irrational fear of a low US dollar. It's as if the dollar's value is some kind of national pride thing for them. But a low dollar means more employment in the US. Why do you think China's trying so hard to keep their currency low?
WOw, seriously all take a step back. both countries need each other for different reason's. Nothing good ever comes from grand standing or war. The US & China like all countries a part of a global system that relay's on each party being stable. nothing good will come if either collapses. We all have to eat, stay warm and protect our family's, this doesn't mean we have to use the Stick, try the olive branch.
Remember there are other countries out there as well, your world isn't the only world.
Sydney, Australia.
2+2 = ?
so lets see...obama's number one priority was "muslim outreach".
fareed regularly meets with obama to discuss strategy.
fareed's editor for GPS is amar bakshi.
hmmmmmmmmmmmmmmmmmmmm........anyone else see how this all works? I do and am NOT afraid to say so...I could give a rats butt about politically correct leftism....
America; wake up. this is a toxic group you chose to put into the white house. They are not there for the "change" you expected.
ditto
You got a 5 or 12 or something for your total, Jon.
come to think of it, your '2' and your other '2' were misidentified, as well.
sometimes i think this fareed guy is a terrorist playing journalist here in the us. he seems to be delighted when he talks about the downturn here and the other day he was interviewing his personal friend, the guy who wanted to build the mosque in ny, in an attempt to let the guy grieve and justify his idea as a total innocent move. he is a muslim probably and tries to create arenas in his show foe his nut brothers. wolf dressed as sheep.
Are you trying to be a moron on purpose? Quit embarrassing your fellow Americans with your posts for God's sakes.
I would not like to see cold war mentalities toward or China for obvious reasons. Even if China doesn't want the money, our government would still be greatly in debt to the American people. Solution is rather simple, generate more tax or reduce spending. Any us vs them mentality wouldn't solve problems...
How to generate more tax?
a. tax more
b. more business revenue
How to reduce spending?
a. I don't know, maybe you do...
China has been buying metals, both as investment, to safeguard their industrial base and to exit their dollar holdings. China has also been selling their T-Bills. China has also been on a buying spree around the globe and paying with, you guessed, US Dollars. China will not dump T-Bills or US Dollars, but they are for sure moving away from both. Your view of the market is very limited and you're misleading your viewers/readers. Stay with political analysis please.
Bottom line: 40 years ago tomorrow on August 15, 1971, President Nixon took the US Dollar off of the GOLD STANDARD. Look up the video on youtube. The results of that are being felt now with massive economic volatility and chaos. Those of you invested in US dollar denominated "paper assets" are going to lose EVERYTHING once hyperinflation kicks in because of all the overprinting of ALL currencies worldwide. Get into gold and silver NOW. Be on the right side of history.
NICE DAY DREAMING SIR !!
Incase you missed it:
http://www.foxnews.com/politics/2011/08/09/critics-question-us-aid-to-china-amid-debt-woes/.
China needs our help so we are still sending aid to them.
and besides, have you all forgotten how obama was going to open his mouth and charm china into doing whatever he said.....man is he naive and so are all of you who believed him. He told you sweet lies and you actually believed him. You see, the ironic thing is this; bush, who the left hates, was an honest man who would tell you straight out what the deal was. You might not have liked it, but it was the truth and you always knew it. Now take Obama, who the left loves, who will lie straight to your face and you kind of know it and you STILL like him. .
I'll take the less intellectual but honest bush over the lying smiling obama anyday.
Like that whole weapons of mass destruction thing. Honestly you look absolutely foolish with a post like that.
I think there are mutual interest for both 50%, (and 50% self-Interest motive).
Guess what, if China parks its money in its own country, they would be better off, 20% appreciated over the last 3 years. So they are losing money parking its money in the state, ( really). I don't need to prove it, just look at the Chinese yuan value over the last 3 years.
So you say, then why don't you park it at China. That's because there's a self-interest motive ( take a guess, i think you know why).
Lastly, what if US didn't have 1.2 T dollars from CHina, do you think the interest rate would be higher. ( answer:yes).
The china Self-interest motive has caused China some pain, expensive price to pay.
So what they do, they add pressure to US, asking to US to protect its investment.
But the US Gov. could not do much to control it, so China starts jumping up and down like a cry baby.
Then your comment is doing the same behavior, jumping up and down.
Be clam and be collective. Just a jitter, investment partners are feeling down at the moment. No need to judge.
Will be out of the wood if we cooperative more, since China has more money in the bank now. :Let's build a good spirit and team work. After all, China is our customer, and customer has a right to complain when investment go south. You know how that's if you are in a financial industry, or any industry, You need to improve your service skills, when customer complain. If you ignore them, I promise they will go away, soon or later. Thanks for reading.
Do'h
I am willing to pay $900 of my share to china, even though I am not US citizen, if US is willing to stop borrowing from China. Being in US for more than 5 years now, my house is full of 'made in china'. I wish my dream to see 'made in US' at my home will come to true ever. Also, yes you for sure doing a favor to china by borrowing. Hope you realize this and try to stop this instead of being proud of it. It's dangerous to make a country like china so powerful.
Let's face it folks, China is like France, they dislike us because we pulled their butts out in WWII.
The China you talked about was the Nationalist chinese currently located in Taiwan.
So, Americans were doing the Communist China a big disfavor by helping the legitimate Chinese government back then.
I guess why they hate Americans so much.
So please learn your history.
Americans accuse china of manipulating currency
China manipulates its currency by buying Treasury bonds and not letting yuan float.
Americans do not want China to dump the US treasury bonds, but do not want China to manipulate its currency.
What exactly does America want?
Relax America. Our fiscal policy and dollar are absolute basket cases for sure, but the rest of the world are even WORSE basket cases, so there is no need to worry!(The people giving thumbs up to the article will give thumbs down to me, even though I just said the same damn thing).
of course , they are not idiots!!! when it comes to $$$, everyone has an agenda, no one does anything just out of goodwill
We should not be worried about China they are rapidly developing but they have an even greater gap between the rich and poor than we do. A large majority of their population are poor. They are going to have a lot more problems in the future than we are.
The difference between the poor in China and US, their life is better each day and we are sinking.
Do you think we can live without TV, computer, coffee or beer for just one day?
i let Mike borrow $10 bucks so that he could get ten candy bars to eat for lunch. He paid me back the next day. The next month, i let him borrow $30 bucks to buy 30 packs of Skittles for lunch. He paid me back again the next day. Joey borrowed $30 from Bob, but never paid Bob back. Then Joey came to me one day and asked for $2. I said "no." He went to Sally and asked for $1 so he could get a snickers bar for lunch, because he was starving, but she said "no."
is this guy trying to make US go to war with China for his motherland India?
Chinese have infiltrated enough people into USA. who will fight for China from within the walls of USA.
Nice story Mr. Zakaria! But, I think there is no need for Americans to keep obsessing about the debt. It is more important to rebuild the economy, and bring back the faith in the country. I wrote a little piece here about this whole issue:
Pay Money to Pay Money (http://peanutexpress.blogspot.com/2011/08/pay-money-to-pay-money.html)
why are racist comments about Chinese people accepted in the media but not allowed for any other racist. The Chinese are being used as a scapegoat for all of Americans problems which is not much different from how the Jews were used as a scapegoat for Germany's problems during WWII. Such racist comments need to stop! Just plain sickening!
The US needs slavery back in order to turn their current condition around! Repeal the 13th amendment! If an American gets only 7 dollars in food stamps and some who is not a citizen of the country gets 200 dollars in food stamps, then let slavery return! China would not be able to say anything because their people are slaves already!
China's central bank MUST constantly buy our Treasury bonds. In order to keep its currency fixed against the U.S. dollar (which they do by law) , they to be able to redeem one U.S. dollar for every 8 yuan. As their economy grows, they buy more and more U.S. currency to meet the growing number of yuan.
Why would they want to destroy, much less weaken their greatest customer ?
In the devaluation of money, this is a good thing?
To the person who said no one has ever gone to war over debt: You might want to look at the historical context of World War 2. What was Germany's primary motivator for invading its neighbors? They owed EVERYONE around them money (war reperations) and it was strangling its economy, causing severe depression and hyper inflation. World War 1 had similiar context, with debts being a big motivator from the Franco-Prussian war, although not nearly as bad as WW2.
Now to China: China -CAN NOT- go to war with the United States. It simply doesn't possess the logistical capacity to sustain long term conflict with the United States. Meaning, it can't support the supply lines necessary to project force beyond 500 miles from its borders. Let this sink in: It is simply impossible for China, any time in the next ten years, to be in a military position to sustain a conflict of any significant intensity against the United States far from its shores. People talking about the aircraft carrier should realize that this is a (half-hearted, and ultimately futile) gesture towards the US, primarily about Taiwan. According to the NIE on China several years ago, the majority of its military build up has been focused on the areas surrounding Taiwan. The person who made the comment about China's navy/airforce being largely under-trained in comparison to the US is correct in their assessment that they would not pose much of a threat. And regardless of their standing army/reserve numbers, as I said before, they DO NOT possess the logisitical capacity to sustain a conflict against us, outside of the Taiwan issue.
Zakaria is right in the respect that China isn't doing us a favor, they have very little choice in the matter. They have "boomed" in the last 20 years because of the trade surplus with the US and they have locked themselves into a vicious cycle. Eventually, they will develop a counter-strategy to this problem, and you are seeing this now in several ways. 1) They are aggressively moving into the Euro-zone markets as a place for their goods, but the sales numbers can't replace the bulk of the purchases made by the US. 2) They are aggressively using their dollar reserves to buy hard-commodities in Africa (i.e. – Sudan, oil, etc) 3) They are making long-term shifts in energy resources with Iran, India and Russia (The SCO). The reality is: even if China wanted to stop purchasing Treasuries, they really don't have many options in the short-term. Ten years from now, however, may be a completely different story, and I believe there will be a slow shift in this economic dynamic over the next 10-to-15 years, but for the moment: China still needs the US. We are the primary economic motivator for China, and their massive infrastructure projects (and yes, military build up) is directly funded by their exports to the US.
This is not a situation that developed over night. It has been 20-30 years in the making, and there WILL BE severe consquences for both China and the US, but not for some time, as both sides need each other for the foreseeable future. China is aware of this reality, as is the United States. The historical pattern might be for the United States to tank its own economy and deflate and devalue its currency so we can pay China back with worthless paper. This possibility is -very- debatable, however, and I think it somewhat unlikely that this will be the United States' method for paying down its debts to China.
Thank you.
I don't always agree with Fareed, but at least he INVESTIGATES. He has an informed opinion, right or wrong. Why is he the only one?
Look everyone thinks that china owns our econmy. Not really we own theres sure they own a majority of our debt but then they relie on us for everything. All we have to do is cut them off and they are screwed. Without us bying their goods they are so done. Right we are making them a super power not them selves. In short we own their econmy
"U.S. pays out some 74 million dollars to China in interest payments on debt every day.', "833 dollars every second" Sounds good but the problem is US PRINTING 74 million/day, 833/ second
No matter how you look at it, this whole system is a house of cards that WILL collapse sooner or later(probably sooner).
Good reporting!!!! Thats what keeps me interested in still watching and reading the news Goodwork
Is china really depending on USA to buy its goods anymore. Today entire world is a buyer of chinese goods even the under developed countries, developing coutries alike. Take for instance India, you see chinese goods everywhere.
I feel that today USA needs china more than ever simply becuase we are so used to buy cheap things that are made in china. China can easily keep its workers busy by suppling goods to rest of the world.
We need to have alternate to chines goods to have a upper hand on china.
Zakaria:
Stop blaming the Chinese. They did not force the usa to cut taxes recklessly as Bush W did. They did not force the USA to run a huge deficit.
The math speaks for itself...China parks all its world earnings including export earnings from US here and even earns interest in the safest sovereign debt in the world... It needs wealth & wants to be the strongest economy..Cant become one by becoming the largest consumer in the world.... So they need the Americans to consume...for which they will do anything.
China never declares war.
I had the pleasure of listening to Donald Trump on CNN recently – he is a real asset to the US, sees clearly
the managerial shortcomings, doesn't mince words, is not full of Guff & Fluff, and above all views China in the
true light – a real danger to the US.
This article is nothing more than a smoke screen. It diverts readers' attention to China and take us away from the real problems in the US. We need to create jobs in America, and this is real. BIG CORPS are the problems here. They pledged their allegiance not to the USA but to money. They set up CORP. headquarters all over Europe and other parts of the world so they can avoid paying he 35% tax (in some European countries BIG CORPS only paid little over 10% tax). Congress needs to close this loop holes and make the BIG CORPS pay their fair share of tax. We us Americans need to organize and boycott BIG CORPS that don't pay tax and outsource American jobs overseas. The problem isn't about whether or not China will buy our bonds, we need JOBS!!!
ann
"For myself, I would rather have fewer things, but with more quality. I would rather quit buying from China, and bring back American, quality products, not the lower quality Chinese products(to all of you who keep berating America). That in turn may bring the jobs home. The government needs to have a plan to return jobs to America(to those who praise China and blast the US, how do you think China has started becoming middle class? Many US companies are there giving them jobs)I think the people should start complaining and bring American companies back home, even though its cheaper labor in China-wheres your patriotism?Your country needs those jobs, find a way to bring them back so you can earn enough satisfaction, is that so difficult or are ALL businesses too greedy and need to be boycotted by Americans who take their jobs overseas?I dont have any solutions, thats not my area of expertise, but I know there are plenty of intelligent, innovative Americans out there who are quite capable of creating jobs for people, thats what Americans are all about. We dont give up and we come back stronger. I call on BIG BUSINESS and CORPORATION and those with mpney in their pocket to make a differnce here since politicians can't.I dont like to berate people, but its a fact that China and a few others STEAL ideas(even making copies of original cities in other countries) . Shame on those who sing their praises , then blast the US who has helped many countries rise to midle class by exporting our jobs or importing their goods. Americans need to start looking out for themselves and insist that jobs stay here. I dont care if its cheaper to build something in another country rather than ship it, the government needs to help find ways to ship them cheaper, rather than building factories with our technology elsewhere.We help others and it only hurts us and allows us criticism from those who dont know who helped in the first place.And those businesses and corporations know who they are. We in fact helped India with our technical jobs and one company is bringing the jobs back home and I applaud that move. Our voices need to ring louder in this regard. I used to enjoy helping other countries, but there is no appreciation for it, all we hear are the negatives from the world because no one knows the reality. For those that wrote these articles, you should know, we are a resilent people, and when we are attacked verbally by people we have helped, we know its time to stop helping you. Now, if we can get the government to start listening up, because face it people, you work for we the people, and we need to make sure you get a pay cut because youre not doing well in job performance. We would all be fired by now!"
Well said.
I've actually read some interesting comments tonight, although I haven't made it through everything. Usually it's the typical one or two liners of dribble in the comment section at CNN and then someone starts accusing someone of being a bush or obama lover, so I usually don't read comments here that much.
Was a good article too...I'll post something later.
This is a very good article. It is easy to understand and makes alot of sense out of the confusing things we see.
Eventually, Americans will learn what the initials VAT mean – Value Added Tax. It is becoming very clear that the only tax that Americans will ever accept, one that everyone participates in proportionately to consumption is a VAT. The U.S. is also the only industrialized nation that doesn't have a VAT. So brace yourselves. Here it comes. Don't be surprised if a Republican or perhaps even a Tea party linked President supported by Congress, is the one to implement it.
Not to be a Bible thumper, but there is a Proverb which states the borrower is a slave to the lender, and the lender is a master to the borrower. No matter what religion you have, or don't have, that is something to seriously ponder.
The Bible is TOTALLY where we should look to for our economic advice.
I'll repeat what others have said:
If you (the borrower) owe someone $500, $500,000, or even $5,000,000... that's your problem
BUT If you (the borrower) owe a NATION almost 1/4 of its annual GDP... that's THEIR problem.
(China owns $1.2 Trillion of US "debt"; China's 2010 GDP was approx. $4.99 Trillion (USD equivalent))
One important fact is that china has offloaded 1/4 of their dollar holding in the last 6 months from 1.6 Tr to 1.2 Tr. Till Dec10 their dollar holdings were going up. It will be useful to check whether China is till Buying T bills. It seems that China is shedding their dollars in natural resources like Gold, Silver Rare Earths etc. However they need US for now, but how long?
I agree with your observation but not with the recommendation. I've read your books and really enjoy them. As one of the blogs said, we need to change our culture to become leaner, more agile and seek higher quality. If there is a book that I'd recommend it would be: https://www.createspace.com/3361323 that explains how through lean, agile and six sigma quality we can multiply our return on capital investments.
I like six sigma...I've read a few of the books. They have good management strategies.
China has a huge and growing middle class. Soon, they will not need to export to the US. They have already slowed purchases of US Treasury debt and started moving that money into gold and gold mining operations. China is now the world's largest gold miner. In a few years, they will have built up significant gold reserves and have grown the middle class and they will remove the peg to the dollar. China will boom, and the US will bust.
For those who think a military conflict with China is just irrational. We all loose from wars, look back at vietnam, Irak, Afganistan, now Lybia and who is going to be next. What a mess is going on with the NATO alliance, if we cant even deal with Libya and other Arab worlds, let alone china. We dont need any more wars, it costs too much blood , suffering and money. I do accuse China of currency manipulation, Its is affecting not only us but the world, but i dont think WAR is the answer.
What always amuses me about comments to Zakaria's articles is that no one seems to realize he's not religious (even if he was raised Muslim) and that he was part of a conservative political movement during his University years–and that he actually self-identifies as a "centrist," not a liberal or a conservative.
This idiot is an Indian. His biased opinion on China is automatically irrelevant.
IIt's going to end up China vs the rest of the free world. It is a point of terrible disgrace that we are trading with a totalitarian regime.
before we ask anyone else for favor, we need to ask ourselves: is our country doing us a favor?
This is a nice explanation of how interdependent China is to us, and vice versa.
Thing is, the MORE debt China owns of the United States debt,
The More China owns the United States.
If we think about it democratically, change votes to dollars.
The more dollars China owns of our debt, the more DIRECTIONAL power they have on how American chooses to do things: America's Fiscal policies, etc.
If the trend continues over the next 30 years and the US national debt grows to $50 Trillion, it wouldn't be surprising to see the language of commerce change from English to Mandarin.
A most brilliant strategy by the Communist Chinese regime would be to begin investing in America....on the United States soil.
Open manufacturing companies that the chemical uses could also be used for warfare. Invest in telecommunications, energy sectors, and other infrastructure.....especially power grids. Send their people over that are loyal to the Party. Have sleeper cells everywhere in America. When the time comes shut down the grid and as they have also been working on shutting down the military equipment.
But then how could anyone in the United States be soooo stupid to allow this to happen. Oh yeah that's right they are allowing it though the Governors form and all the states saying please come here buy us up!
China has much better capital mobility than what this guy said, US is the one that got trapped in debt frenzy.
Fareed, Fareed, Fareed...you are so cut up in the hype...lol. You really expect us to believe that the Chinese are FORCED to buy our T-Bonds?!?! Really, as they can't start buying physical assets to a higher degree than they already have been doing, or continue to spend money on infrastructure development in China, which they have started doing. This works DEATHLY to America's interest, since as the Chinese become more consumer orientated, the impact of our economic viability is sapped. We lose our ONLY leverage over them...so please stop with these stupid columns you keep posting on how we our largest creditor somehow is trapped into buying our junk bonds. The real solution is for us to reduce our spending and start paying off the deficit, on a realistic schedule. If we could have a plan to pay down 50-60% in 20 years, America will be BACK IN BUSINESS!
I generally agree with Sanjay's viewpoints in this article. However, what this article and many others like it fail to mention in regards to the subject of "worst case scenario" sell-off of T Bills is this: major holders of T- Bills like China would realisticaly never been able to dump all of their T Bill holdings. This is because interest on those bills is paid in dollars. As the heavy T Bill sales begin to cause a major decline in the value of the dollar, the T Bills themselves become less and less marketable. Ultimately, the demand for T Bills will decline along with the dollar, and large T Bill holders such as China will be stuck holding a whole lot of worthless bonds. This is a scenario that I'm sure pretty much all of the US' creditors would like to avoid.
Awwwwwwwwwwwwww poor China they have a lot of nerve just about anything if you ask me. If our government did not allow them to bring their crap into our country to sell they'd be a no body too and guess what the americna people would have jobs.
Not suprised one bit ' don't think anyone is Do you?????
I like Chinese.
They only come up to your knees,
Yet they're always friendly, and they're ready to please.
I like Chinese.
I like Chinese.
There's nine hundred million of them in the world today.
You'd better learn to like them; that's what I say.
I like Chinese.
I like Chinese.
They come from a long way overseas,
But they're cute and they're cuddly, and they're ready to please.
I like Chinese food.
The waiters never are rude.
Think of the many things they've done to impress.
There's Maoism, Taoism, I Ching, and Chess.
So I like Chinese.
I like Chinese.
I like their tiny little trees,
Their Zen, their ping-pong, their yin, and yang-ese.
I like Chinese thought,
The wisdom that Confucious taught.
If Darwin is anything to shout about,
The Chinese will survive us all without any doubt.
So, I like Chinese.
I like Chinese.
They only come up to your knees,
Yet they're wise and they're witty, and they're ready to please.
I love china. And I like chinese.
The US must be responsible for the drop of the ecnomy.
It's really simple. If nobody buys our debt then American can't keep spending at the same rate, and China will Export less to the US and China will have problems. We are in a deadly embrace. China wants to fuel our economy by buying our debt so they can keep their people working. Plus, they know that all of this debt is weakening the USA every day as we follow this INSANE path of borrowing.
You don't have to be an economist to see what all of this borrowing is going to blow up in our faces someday. Our politicians must know the perils of what they are doing, yet they don't change the policy. What I can't figure out is who is benefiting from all of this and why it continues.
" Imagine that China were to sell off those 1.2 trillion dollars of U.S. Treasury bonds. "
"It would trigger panic selling of the dollar. That would in turn hurt the U.S. economy"
Dear Fareed. This is not correct. It would be a blessing for American economy. FED would issues QE4 and buy up all the treasuries from Chinese for $1.2 trillion, perhaps, even much less. The real question is what would Chinese do with $1.2 trillion of American dollars? Buy up American goods, invest in America? It is long over due. The money has to get back into USA one way or the other. The whole "free" trade was supposed to function like that: we buy from them, then they buy from us and stimulate our economy. Both economies prosper. In really, Chinese take the dollars out from the
trade circulation and loan them to our own government at very low (around inflation) interest rates.
The end result from our trade agreements: Chinese get private sector manufacturing and engineering jobs, we get all kinds of government stimulated financial bubbles, inefficient government jobs financed on borrowed money and high private sector unemployment.
Unless forced, Chinese will never buy as much as we buy from them, they will prefer to loan money to us. They do not
need fair trade, it will slow down their economic growth. We must change our foreign trade agreements: the world must purchase as many goods from America as it sells to America. Other countries, including Chinese, effectively corrupt our political process by suppling our federal government with cheap loans. If you want economy to recover, request fair, balanced trade agreements from our government. Our foreign trade, our annual trade deficit is the fundamental source of our economic problems. It must be fixed. It is the only long term solution.
AlanInCA,
"What I can't figure out is who is benefiting from all of this and why it continues."
The Chinese- they get the jobs and modern economy, the international companies- they get cheap labor and profits,
our politicians- they get to borrow cheap money from foreign governments to spend and to get reelected. The only
losers are American workers.
Another point I have yet to see made is the idea that if China makes any moves that would potentially destabilize their economy, the Chinese people themselves become a problem for the government. If what Zakaria is saying is true about their people being unhappy with the amount of debt China is buying, destabilizing their economy will likely lead to substantial unrest within China as well. The Chinese people are just getting a taste of prosperity. Taking that away wouldn't sit well and would likely cause the government significant problems.
While I'm here I have a question for anyone who might have any wisdom to share regarding this concern.
From my understanding, over the last couple decades China has infused very large sums of money into it's economy. It is similar to the stimulus package that the US underwent over the last couple years. The difference is that China loans it's money to state owned banks and when the loans can't be paid back the government takes the bad debt off the banks books and holds it indefinitely. If the Chinese government can't pay it back what happens?
That's why it's so hard to really tell what China's economy is really like and what the true numbers are. Who is actually purchasing everything in China for them to get 10% growth, or thereabouts, steadily? They say the rising middle class, but there's still so many people there that work and don't make a lot of money. Look up China's purchasing parity power....it's not high at all. They are 94th at $7900 annually, along with Ecuador and Bosnia. We are at $47,000 per year. I don't buy it. I know we don't know everything here in the US, as far as the FED balance sheet is concerned, but we have a much clearer picture of the US financial situation than what's really going on in China.
Gene
China is buying up America. They are buying our gas reserves, power companies, telecommunication companies, precious metals, gaining citizenship in the United States under E-B 5 investment program. There is a map with the various things being bought out in our Country and most by the Communist Chinese Corporations. Just like Idaho now has a Solar manufacturing plant......60% owned by the Communist Government. Read the stuff and how easy it would be to pollute (even accidentally) the snake river. The Communist Government is also interested in two more energy projects. Our Governors are selling us out.
Guess who owns the Chrysler Building? Arabs in Dubai
Why do you think Buffet bought that railroad? to carry coal to the ports from the China bought coal companies in America! You think they are just buying up Africa and South America......wait three months and take a look at your electric bill.
Zakaria forgot to mention one very important thing: The entire Asian market is growing and becoming less dependent upon US exports and US dollars. When you have a billion people in China and if you're a business in China, you've got a lot of customers locally to choose from.
Well, I think people (us Americans) that get upset at China for looking out for itself are a little hypocritical. Don't we always lookout for ourselves? The important thing to remember is that every other country talks crap about us; sometimes we hear about it sometimes we don't, but it happens everyday in every other country. So why should we even care? They always say they are gonna do something to us, most of the time they don't, and when they do we kick their butts. So again, why do we care what they think? F'em if they don't like us.
For the time being China needs US and European technology. The problem isn't when China decides not to lend us money anymore, the problem is when they have siphoned enough technology from us they won't need to pander to the US to sustain their economy anymore. American companies that operate in China are often required to share there technology with the government and it's no secret that they will steal anything they get their hands on.
I don't have anything against the Chinese people prospering. I wish them the best of luck. Their government on the other hand are nothing more than self serving thieves that will do anything to remain in power and preserve a superficial image of having any concern for it's own people.
I fully agree...well said.
*ahem*
F@#k the Chinese.
Owe them $200, that's your problem. Owe them $1 trillion, that's their problem
China is a smarter country than the U.S. because they plan their actions over 50 years.
Some facts... 13% of worldwide high-technology products are exported from China, well above the U.S. ; and 40 % of its economy is based on high-tech products. Every years, 500 000 new engineers are graduated.
Before the financial crisis in 2008, the China's economy was 35% of the U.S. economy. Now in 2011, it's 50% and if you add the currency devaluation, it raises to 75% of the U.S. economy. See the trend.
Now, China plans to set the Yuan as the world's first reserve currency. The dollar will soon die and America will then agonise.
You probably speak the truth, but no one wants to hear it. Try telling this to the academics in this country. 490,000 out of the half a million that you mention of engineers graduated per annum are probably from U.S. universities. As said below in a comment by me, you cannot discriminate against them. You can only aid and assist them in taking over the world. That's only fair, you know. Let's be nice, please.
How can I disagree with this author? If China is not doing US a favor by buying our Treasury bonds, then we must have done every country including China a favor by selling them our bonds. Considering the fact from the article we are paying Beijing 833 dollars every second because of the bonds we sold to them, we should find a way to stop such economic bleeding. Can we stop selling other country our Treasury bonds? Zakaria is a genius. What else can I say?
libby
Yeah, but the Chinese are so cute, and you can't discriminate against them. How dare you?!
Mr Zakaria, given the fact you never put any faith on the Chinese media, why would you want to make a fussy in its media story in the first place ?
Where can I buy a Chinese flag?
" Its state-run media thundered that America needed to "cure its addiction" to debt."............................................
And America's media are run by business. Wonder why cnn doesn't mention this in every article. Maybe it's because they are a business?
Miraclerose
"Just like Idaho now has a Solar manufacturing plant......60% owned by the Communist Government."
Well, something tells me if the global economy will collapse. The Chinese government bosses, their families will
just emigrate to USA and keep the plants for themselves.
"The reality is that China is trapped into a cycle of buying our T-bonds. "
China GPD grows 10% per year. This is not trapped. This is full speed ahead into the future.
People have doubts about the actual numbers that the Chinese government gives out and they are basically basing their economy on a huge pile of bad debt.
just visit any walmart and stop dreaming up. check out cia.gov. they confirm the gdp numbers
Fareed zakaria is a stupid idiot because all he can do is write down anything that comes to his mind and try to convince people with his dumb logic. Do the politicians and the media think that the people are mindless zombies and will believe anything that is told to them? The US is in such a financial mess and instead of pointing that out and maybe a few suggestions the great zakaria says oh dont worry that we are skrood just remember that the great boogeyman china is skrood too because we owe it money and it has to lend us money of it will destroy itself. Are you kidding? What is this idiot smoking? It makes me mad when the media tells us to put our heads in the sand and pretend everything is ok. Everything is not ok. People have lost jobs in the thousands, our debt rating has gone down for the first time, social and educational benefits are being cut etc while the big companies are showing record profits and the inept, corrupt and heartless government has totally let the people down. But people dont worry the great seer zakaria says its ok. I for one am not a mindless zombie and will never believe the false propaganda in the media.
If they want to go to war for 900.00 count me in to say F U to the creditors lol.......
China seems to be nipping at the hand that feeds. The US pulled China out of the dirt and made it into a prosperous country. Now, as with the South Koreans, the Chinese like to massage their ego's and think their success is home grown. Their self righteous superior race mentality would be comical, if was not so annoying to deal with. I would gladly pay 10-15% more for any product made in North America, and I'm sure many more people feel the same. I'm sure China has made it clear that if the US starts pulling jobs out of China, China will expect it's debt paid in full.
The hands that feeds...you do realize that all countries go after their own national interests right? The US's plan in China just backfired and blew up in its face. If you think of a civilization ten times older than the US, no wonder the US IS in this mess.
NO RESPECT!!!
They are already migrating to the United States. I think most are Party loyalist as who else would the Communist Government allow to leave. With continuous threats from China, them building their military, buying up infrastructure and power grids I think our governors are putting us at risk.
China would never allow the Untied States Government to buy and own their infrastructure, resources, and on their soil. They did allow us to finance their Nuclear plant but they own it we just paid for it.
Before those Chinese bloggers complain too much, the purchase of US T-Bills is what enabled the Chinese government to devalue its currency and peg the Yuan to the US Dollar. The Yuan should be much higher than it is, but the Chinese government doesn't want that because it will make Chinese goods more expensive.
So, those Chinese bloggers that are complaining about the dependency on US Treasuries should keep their traps shut because that is what fuels their economy and keeps Chinese workers employed.
We're joined at the hip whether we like it or not. If the US goes down, we're taking China and the whole rest of the world with us.
This may be true for the moment. But you also have to think lawn term. currently China has an export market, but they are trying very hard to beef up their middle class for one reason only. So all these billion of people will buy things. And once we have billions of chinese all buying up chinese products at their chinese version of walmart, the american market wont seem that important any more. In fact the American market might become more of a hinderence to Chinese stability as there are only so many products that the Chinese can make, and if they are all busy buying their own products, we might not find out shelves at walmart stocked as fully or as cheaply as we are used to. Then America will be truely screwed as the Chinese will be looking to offload our debt and sever trading ties as quickly as possible.
The Chinese government and ALL information out of it are a joke. They are begin laughed at by anyone who really knows what is going on. There lies will come back to haunt them.
You didn't do the math correctly. The correct figure is $856.48 USD per second.
Well, none of what you said prevents China from "hedging" the riisk associatied with owning 1.4 trillion in US bonds and I do expent Russia would join them in making the effort especially wretching – the two are trying to establish a currency to take the place of the dollar.
So, don't tell me what I already know, that is easy. What isn't easy is anticipating a sudden establishment of currency replacing the dollar after Russia and China have divested themselves of dollars by making the "holding" of a portion of their bond investment a condition of their doing business in places like Australia, Africa and South America!!!!!!!!!!!! And, show me a "patriaotic" hedge fund manager who wouldn't take a part even if were 'poisonous right at home.[Particularly after S&P let their brothers know about the downgrade so they could short Wall Street on the backs of the small investor.
Thomas E. Shafovaloff
Thomas E. Shafovaloff
I would like you all to mark my words. We are not going to pay back any debt, in other words all the Treasury securities China bought from us are just piece of paper without value. That was the strategy pushed by the American Government to get our dollar back for worthless printed paper and keep doing it till the bubble burst because it's not going to last forever this one. When China eventually will stop buying from us the T's, guess what, WW3 starts off, and who is going to be responsible for starting it that's to complicated to put it down here. Anyway, as tragic as it sounds WW3 is a necessity for everybody because we just reached 7 billion and if it goes like that in 2050 we'll be around 20 billion earth population but obviously we won't get to that because it would be more tragic than the war itself. I'm forecasting the war starting around 2015 and it's going to make us in half which is not bad considering the resources left by now. It's just a necessity and it's going to happen.
Kill half of human population = good.
I don't see that as being a positive. But than again I'm not psycho.
Simple, from chinese viewpoint, "made in china" is cheap if sold in china, say just 1.00 chinese yuan, it is expensive if sold in US, say 2.00 USA dollar (Americans think it is cheap). The chinese company earn 2.00 USA dollar and sell it to chinese central bank at high exchange rate, say, USA dollar/chinese yuan=6.5. So what chinese company earns in terms of chinese yuan ? It is 2*6.5=13.00 which is 13 times higher than that sold in china. So it benefits to chinese company and people. As for central banks, it do not matter, as it can print money as it wishes.
From a Report in 2008 Regarding China Investment Corporation to the government
"At the same time, China has also been providing reassuring statements about the
types of investments the CIC would not be making. Chinese officials reportedly told
German Chancellor Angela Merkel during her visit to China in August 2007 that the
future CIC “had no intention of buying strategic stakes in big western companies.”61
CIC Chairman Lou has indicated that the CIC will not invest in infrastructure.62
China’s Vice Minister of Finance Li Yong also dismissed “rumors that China would
try to buy out European and American companies in large numbers.”63 Vice Minister
Li has stated that the CIC would not buy into overseas airlines, telecommunications
or oil companies.64 An unnamed contact at CIC indicated that the SWF also will not
make investments in foreign technology companies as a means of obtaining advanced
technology, pointing out, “That’s political, and we don’t do that.”
The following link is to a map to look at how much is bought up in your state. They are buying the very things they told Merkel they would not.
http://rhgroup.net/china-investment-monitor/
Chinese Communist Party brutality
just jeaous of a country doing well - racist Whtes don't like to see non-whites do well.
Fareed is very good, no question. Bottom line here is a liitle of "love/hate" relationship. We really love to hate each other thru media BS. But we love the bottom line from cheap labor. The chinese are passionately in love with capitalism which is what America is, good bad but the love of money and attaining it is freedom and yes happiness. You don't need to read Chinese to know this.
BTW, this reporter is a politician. The Americans are businessman by nature. The chinese are very aware of that.
Chinese Communist Party brutality
China and other countries dont want us to fail because we make them rich . We raised millions for other countries in there time of crisis why cant we do it for us. Republicans Dem's fox msnbc cnn and every other channel should host the american buy back get all the stars to do free concerts all over America and we buy our bonds back from China . I DONT WANT TO HEAR WHAT THE REPUBLICANS DEM'S OR TEA PARTY MIGHT DO IT'S NOT FOR THEM IT'S FOR US
Chinese Communist Party brutality
i just hope that the us goes down!!!!!i lived there all my life i,m 40....the US thinks that because they have some weapons they canjust barge in anyones busness,they been doing this for decades,i hope the get what they deserve,and they will,so the world dont become so dependant on them,china should keep their cheap production to themselfs,chinese products are horrible!!!!most countries should self sostain themself
So where do you live now? I agree we should not be the world police and at the price of the United States Citizens...especially the Senior Citizens who paid into their Social Security Retirement fund all their lives being told it would be there when they retire......but our dishonest politicians took the money and stuck a bunch of IOU's to them.
The Chinese are slinging mud? Because they are the paragons of all things right and fair? So how do they explain products such as; drywall, baby formula, pet food, lead in toys, cookware and dinnerware, et al. Oh and what about the out and out thievery regarding intellectual property, trademark and copyright infringements? They also underpay Chinese workers by making the yuan weak by purchasing dollars. Chairman Mao would be appalled by such greed and corruption borne of the capitalist spirit that China now embraces. Hypocrites.
How do we explain the lack of action and putting restrictions on these type of things. Too much to be inspected then too much being brought in.
The biggest export for the U.S. is its own wealth. Go ahead China, do the U.S. a favor and refuse to play the zero-sum game that you are winning. If someone were to make me wealthy, I would be appreciative rather than treat them with scorn, contempt and insult.
Exactly....without our help, they would still be an isolated country that would be nowhere near the levels of growth they have today.
Since when we "help" without USA national interest?
US Treasuries are the safest, and most liquid. China won't do a thing other than continue buying them. If China could hurt the US without hurting themselves, they would've done it already.
You can call me a pshyco or whatever you might like to but the truth of the matter is that WW3 is a necessity for mankind, besides all the debts writes off as a result of it...so two birds killed with one stone – debts over and half of the globe population disappear. I know it sounds tragic for most of the people but in the long term is a benefit for both humans and nature. We will keep issuing and sell T-bonds to whoever wants to buy because they will never reach maturity in other words we get the dollar back for worthless printed paper, and when eventually will be no buyers out there we push the button...that's life.
The U.S. pays to China 74 million per day in interest payments, who is the U.S. and were doing them a favor all right. The question is how long are we going to keep doing it. To all that bash China's products and business practices the same thing is happening right here and everywhere else. Just like our gov't can't control everyone theirs can't either and their beginners at the game we've been playing a long time.
China has to lend the US money so that the US can buy crappy stuff made in China...ah, the circle of life...
You are right about that, my friend. Just go to any WalMart and see for yourself. What impact does all this junk have on the environment? As long as it gives the Chinese something to do . . .
I am amazed at some of the comments and at the idiocy of Fareed Zakaria who is even suggesting that US may not be able to pay its debt back and become a defaulter. China my suffer some loss if US may not pay back but it certainly wont spell doom for the Chinese. They would still have rest of the world as a target market, where no one in the world would trust USA again. Even if China suffers a loss of $1.2 trillion, their reserves are more than enough to cope with that loss and all it would do is create a minor deficit, not in their budget, but in their reserves! On the other hand US will be as good as Somalia if it fails or refuses to pay back its debt.
What amazed me even more was the amount of people who can even entertain the thought of bankruptcy! what has happened to Americans?
People are just acting out scenarios. The fact of the matter is we would never default. It wont happen...Taxes would be raised to 50% and all discretionary spending would be cut before that would happen and none of that is going to happen either. Once the housing market comes back, we'll get back on track fully and our GOV will, at some point, address some of the long term debt. They really need to stay focused on getting the economy growing again right NOW though. That should be their main priority.
Did you even read the article, or did you immediately jump to your false conclusion? He did not evenly remotely suggest that the U.S. "may not be able to pay its debt back and become a defaulter." He pretty much hit the nail on the head of this issue. He must be some kind of master carpenter. He correctly pointed out that China does not buy U.S. treasuries simply because they are nice guys. China needs dollars to keep their cheap exporting/wealth importing machine running smoothly. And U.S. debt/dollars are the most viable and safest instrument to do that. China loans the U.S. money, which makes the yuan cheap, which makes Chinese goods cheap, which the U.S. then buys. So at the end of the day China is the "company store" and the U.S. is "another day older and deeper in debt".
So is the U.S. really better off owing its soul to China? I think not.
Sigh....China should be more friendly towards the U.S.
But then again,it is what the stupid Communist government is all about,Brain Dead!!!Last time,there was this Soviet Union n Eastern Europe,now communist China....Stupid Communism....
I dont understand why Chinese authorities aren't spending money on most needed projects in their country,like :
1) water problems : they dont have vast lakes of clean water,maybe they should remove all those deserts and turn that space into lakes to store "flood water".2) They could use that buildup reserves to update their coal powered power plants with the latest in cool technology. 3) They could bulldoze and reshape mountains and lands in their country that have given them problems of landslide and fooding; also they need more flat lands to feed its population since most flat lands were "taken" up to build new cities. 4) Make an attempt to make solar panel and alternative engergy systems for cheaper for the rest of the world 5) They could build new great wall of china surrounding its nations borders.6) They could house millions of their people into those empty cities,since its empty anyways,and workout some arrangement way for its people to pay the mortgage.7) They could tackle many of their hazard enviromental problems 8) Chinese could decide to build space city and take the lead in space exploration and moon and mars missions. So,there are more than dozen ways the Chinese authorities can make use of the excess capital they been piling up.And all these are long term employment projects.
Dear Mr Zakaria,
I am a regular viewer of "Fareed Zakaria GPS" this Sunday i saw your News Show and I agree with you on the China issue the Chinese are thinking beyond their limits i think they need a break. They are doing NO favor to anyone by buying someones debt. US should not worry about China or anything else,US must cut down aide to Pakistan. US must slowly withdraw from Afghanistan,Iraq when situations Improve. Slow withdrawal from Iraq Afghanistan is the best way to bring back the Old America. The Focus of government should be on spending money on infrastructure build roads,bridges. Etc
Karanveer S Aulakh, Chandigarh India
US gives AID to not just pakistan but many other countries to name a few, Israel, INDIA, Indonesia, Kenya, bolivia...etc Here, http://www.vaughns-1-pagers.com/politics/us-foreign-aid.htm , have a read for your self before embarrassing yourself further by being an Anti-Pakistani moron.
dont mention india blogger just pay debts and stop those excuses the issue here is that whoever has a debt is broke. .
There is no such thing as Aid, the US paid to use Pakistani territory, equipments and infrastructure to invade Afghanistan and uses Pakistan's military to fight US wars. Pakistan has lost more than 25,000 soldiers and over 50,000 civilians fighting for America, that is more than all other involved nations combined.. No amount of aid can ever repay such a huge loss of life by the Pakistani people. Also Pakistan never asked for the aid, it was Bush/Cheney cronies who went to that country bearing huge gifts and asked for help to fight the Taliban.
So, why exactly did Pak choose to nurture the Taliban? When you support all those terrorists, don't you know you are playing with SH1T?
You will blame the US for all your problems. Hey, do remember that the Saudis funded your ISI to nurture the taliban. And yeah, you guys enjoying playing with sh1t. You even enjoyed the stink from a distance.
Now that it has hit the fan, you are playing the victim.
LOL, very bad analysis, this article looks like that US and writer is begging china to help US.lol
Seriously? Fareed Zakaria???
Oh well,whatever helps you sleep at night!
JoJoCanuck
This may be true for the moment. But you also have to think lawn term. currently China has an export market, but they are trying very hard to beef up their middle class for one reason only. So all these billion of people will buy things. And once we have billions of chinese all buying up chinese products at their chinese version of walmart, the american market wont seem that important any more. In fact the American market might become more of a hinderence to Chinese stability as there are only so many products that the Chinese can make, and if they are all busy buying their own products, we might not find out shelves at walmart stocked as fully or as cheaply as we are used to. Then America will be truely screwed as the Chinese will be looking to offload our debt and sever trading ties as quickly as possible.
August 15, 2011 at 1:35 am | Reply
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That would be a good strategy for them and I'm sure they are trying to do just that, but it's a lot harder than you think. They're just starting to build a middle class, we've had one for a long time. They still have so many people at the poverty level in terms of purchasing power, it will take them decades to reach that point. I said this before but their nation's purchasing parity power is $7900 per year. Ours is $47,500. Iran has more PPP than China and you don't see too many Iranians buying flat screen TV's and supporting their economy's growth. It will be a long time before they ever reach the point you're speaking of.
And one more thing to jojo canuck...We don't buy too many things that were designed and manufactured solely from China, as the only thing they really know how to do at this point is copy or steal technology from us. Manufactured in China, but designed from our companies here in the US. When they do get to that point, we should also be miles from where we are today.
I think Fareed Zakaria is an excellent commentator and this is a very good piece. The only doubt I have about it is the euro. I am British and I don't like the euro for political reasons – but for those same political reasons the Chinese do like it. They also have big enough pull to hold it up. Through all of its trials and tribulations the euro has remained strong. See an interview in today's 'Der Spiegel' in which it is suggested to George Soros there is a 'mystery buyer' of euros. If there are ever Eurobonds – and there will have to be if the euro is to survive but the Germans hate it so they are delaying – but if there ever are Eurobonds the Chines will jump into them with both feet. I agree that that does not mean they will sell T-bills but it will mean that maybe the T-party (see what I did there) have a point and even in the medium the US debt is not sustainable.
Fareed is mistaken
$ is sinkin g rapidly against a basket of major currencies. China could move their money in commodities, and certainly can buy assets all over the world, specifically in Africa and Europe. Afirca for resources.
It does make sense for them to move away from $, as a matter of facts, once their economy is strong enough, they will move away from $, simply because they intend to diversify from export to some sort of domestic consumption.
The $ credibilty as a reserve currency is in question, and the world economies, will dump the $, and move to SDR, and china yuan and the other bric should be included, and guess what that will be end of USA.
For 4 -5 decades USA been manipulating $, because it's the main reserve currency, and most commodoties are priced in $. This will not be the case in 20 years, when USA will not longer be number 1
Keep dreaming.
Exactly what do you think Quantative easing do? QE does exactly what the chinese too, but a larger scale. Devaluating $.=, to make american goods cheaper, but this time. Commodities are rising, e.g crude, as declining $ does not mean commodities becomes cheaper for other stronger.
This is backfiring for FED, as no longer people will accept $ manipulation. Crude goes up, america will not succeed, simple correlation. Why is it there will be no QE3, as crude will rocket and USA will go back to recession
Agree with irwin
@Damian Palmares, you better wake up from your dream. Do you even realize whats happening and how ridiculous you sound?
I fully understand what's going on.
Just because you doubt that the US can't recover from this, doesn't mean that I don't. I believe we will and that's my opinion. The reason they wont pull away from the $ is because they have to keep their yuan down. When they are able to purchase domestically and keep growth without exporting, then I could see them moving away from the dollar. but that's not going to happen for a long time. They don't have the domestic purchasing power to do that yet and it will be a long time before they do. So they will keep buying T-Bills in order to peg the USD and keep their Yuan from appreciating so they can keep profiting and building ghost cities and such
Am really happy that soon this crap of America being the sole superpower will be over, kudos china. How do you call yourself a super power with a debt of 14.3 trillion plus debt. The clock is ticking very fast. Its good that the entire Africa is the major consumer of china's products and now nations like s.sudan are learning Chinese as their National language. America your time is up. 883 dollars debt per second that is a big joke and it really makes me happy seeing america going down so fast.
At lease China will pay. If China don't, we can count on big brother mafia USA to help!
If chaina is trapped in US, they can look for inda for investments
Ron Paul has given you the right answer: We have overextended the USA in needless wars, many of them
aimed at depriving China of resources!
Curb millitary spending and start exploring US based oil – and mind our own business is the answer.
To all you wishful thinkers mentioning "War" against China – we can't even drop Colonell Gadaffi on our
own, China is not a nation to be messed with!
Can't drop Gadaffi...what a joke. We haven't even tried.
I agree with increased exploration of US based oil though. Maybe the Bakken oil shale will pan out.
In the world community, only Americans talking about going to war with other countries. You are so proud of being superpower and beat up the weaks. Look at the countries you invaded, Iraq, Afghanistan, Libya. I am impressed.
China can't beat the US in a war, so they won't start one one. The United States is going to be in trouble soon. The economy has been mostly stagnant or worse for a decade. We have simultaneously been fighting outrageously expensive wars all across the middle east and Asia. The Republican party continues to stunt social and environmental progress. education and infrastructure are in a slow sag while the military's budget continues to grow (not that we have anyone to use it against). Then of course, is the looming budget crisis, which will eventually force us to choose between a superpower's military and influence or a high standard of living.
I'm not a "chinese propagandaist", but the truth is, the US can no longer have it all. The rest of the world is getting it's economy in gear and is finally escaping a half century of imperialism by Russia and the US.
We will either scale down and relinquish our military strength, or become a bankrupt and crumbling country, surrounded by a gleaming military but nothing else. Much like the Soviet Union not so long ago.
Chinese products are like Chinese food, after an hour, you are hungry again.
"We're probably doing them a favor". So the debtor is doing the creditor a favor.
Well, I know, that's Zakaria's perspective on economics. I still remember his articles about economics in Newsweek. This one sounds rather like Fox news.
In fact the U.S. depend on China, as well as China still depends on the U.S. That was true in the past, and it's true until now. But things are changing right now:
1st: China has already started diversifying its investments (e.g. by buying shares of very large and reliable companies, Munich Re being only one example). and
2nd China will reduce it's dependency on exports. It has already started to prepare for this fundamental change.
And yes, that means that China will slow down its purchases of American debt in the very near future. And yes, that means that the value of the U.S. Social Security trusts' and pension funds' assets will decrease significantly. And it will change the balances in the global economy slowly, gradually. Provided that there is no major crisis in the meantime (a significant contraction would hurt the U.S. as well as China).
I still remember Zakaria's articles and comments about the financial crisis in Newsweek in 2007/2008. I remember it very well! It has all been proven wrong, and even absurd.
Well said! The question we need to ask: What have we done to turn the economy around? Are we going to keep "doing the Chinese a big favor" as Fareed put it?
LET AMERICA CONTINUE TO INTERFERE IN OTHER COUNTRIES AFFAIR,LET THEM CONTINUE TO TRAMPLE ON THE WEAKER NATIONS SOVEREIGNITY,LET THEM CONTINUE TO BOMB OTHER COUNTRIES WITH IMPUNITY,SO ALSO WILL THEIR DEBT PROFILE GROW PROPORTIONALLY.THE END OF OPPRESSION IS COMING TO AN END.
Dear Fareed,
I want to do you some favor... please lend me some money so I could be trapped into your cycle...
I may be wrong but my excel workbook calculates 74 million divided by 24 hours divided by 60 minutes divided by 60 seconds to be $856/second, not 833/second. A minor difference to be sure, but.......
China problem is this, they are scared of Yuan, as matter of facts they can Yuan float, and they will become super power faster. By PPP, china is already richest already.
美国人还沉浸在自大中。他们喜欢用自己的观点强加在别人身上。他们不喜欢皮蛋，就说皮蛋是世界上最恶心的食物，但是他们忘了，世界上也有人不喜欢他们吃的臭臭的奶酪，可是从来没有中国人认为奶酪是世界上最恶心的食物。这就是中国人和美国人的区别。美国人总喜欢报道其他国家的丑闻，美国人总喜欢在侵略其他国家时找一个好的借口，美国人认为他们是救世主。一句话，美国人认为他们是世界的主宰。
American food the worst in the world ? ARE YOU MAD ? I lived in China for 6 years and got sick and stopped eating your msg stir fries ! Your food is vulgar ! American food can be unhealthy like yours, but it tastes GREAT ! Btw, whenever I go to KFC and McDons they're packed with chinks, HOW COME ????
如果你的中文不是很好的话，不要随便理解，我说过美国食物是世界上最差的吗？还有既然你在中国那么不舒服的话，下次请不要再来中国。为什么你们可以批评中国的食物，却接受不了别人对你们的看法呢，这是一个奇怪的现象。希望你淡定看待，不要那么生气。
"chinks"? wo zhong yu zhi dao wei shen me ni jue de zhong guo cai bu hao chi le ,yin wei ni de zui hen chou,bu hui hao hao shuo hua ."
“中国佬”我知道为什么你觉得中国菜不好吃了，不是中国菜本身不好吃，而是你的嘴有毛病，你不会好好说话。
炸薯条，热狗，汉堡是健康食物，没有危害的食物？我从小吃中国食物长大，就算有毒，但是我想告诉你的是我还健健康康地活着。
That's easy for you to write . . .
我不知道您要表达的是什么意思。本人愚钝。
Thanks for the reply! My favorite part was this "界的主宰". I think those are pretty pictures!
世界上没有“谁是谁的主宰”，有的只是“谁认为谁是谁的主宰”不过这只是臆想。
中国就是中国，我们有好的方面也有坏的方面，在中国，但是有很多像我一样的年轻人，我们正努力改变着不好的地方。无论你喜欢或是不喜欢中国，无所谓，但不要伤害中国人，我们没想过要伤害任何人。
我们喜欢中国人民。这是贵国政府，大多数美国人不喜欢。如果你喜欢生活在共产主义统治下，然后给你更多的权力，但我们不认为你正在贵国政府公平对待，这就是为什么你听到美国人谈论中国人的我们。我们不喜欢被控制，并叫他做什么，或我们会杀了你。我们的法律，但他们保护的人。这是贵国政府，美国人不喜欢。不是中国人。
why can't you guys write in pinyin ??? btw, are they selling apartments in Tianjin Ecocity yet ? i really wanna buy one !
谢谢你！是的，我也知道，也有喜欢中国人的美国人。但是我看到的总是一个负面的中国，我不知道究竟在美国人眼中中国真的就那么差吗？看来作为一个中国的年轻人我们必须改变中国了，因为我承认有的地方我们做的不是很好。但是每个国家都有自己的不足不是吗？每个国家都有自己的观念不是吗？为什么总要用政治的眼光去看待一个国家，和那个国家的人民呢！
其实我不想说人权。或许美国的人权做得很好，但是我认为只是针对美国国民本身。如果美国政府真的重视其他国家人民的人权，那么美国政府就不会轻易地发动战争。他们有没有想过无辜的伊拉克人民呢？有的事情不能用双重标准，认为同一件事情，自己的是对的，别人的就是错的。你在用食指指着别人批评的时候，别忘了你还有三个手指指向你自己。不论美国还是中国，我们需要的是理解，然后更多的放在对自己国家的完善上，而不是忙着指责其他国家。
还有，能在美国的网站上看到会中文的朋友，我感到很高兴。
@2
“但是我看到的总是一个负面的中国，我不知道究竟在美国人眼中中国真的就那么差吗？”
您太认真了，并不是每个美国人都是这样看中国人的；同样， 并不是每个中国人都
看所有美国人是那么好或那么差。
对洋人不能够太认真。
Translation – Chicken Fried Rice: Small $2.99 / Large $3.99. Beef Fried Rice: Small $2.29 / Large $3.79. Egg Roll: (3) $1.99 / (5) $2.49.
Farid failed to test a change of paradigm. How about a new possibility to invest? A new country where it becomes safe to invest? a new way of investing safely?
Yes, this will unlikely not happen without intervention but what can't be done with 4 trillions dollars?
good question, simple answer. Invest in Brazil ! Plenty of oil, iron ore, soya...in fact, the only country that can saciate chink voracity is Brazil !
The USA have been all over South America ? Go back to elementary school jerk. The day you set foot in Brazil you'll see the pitiful remnants of your failed empire collapse for good !
Fareed Zakaria is an indian-American, who does not like China, due to the economy of China increases fast than India, he always deliberately smears China.
I really can not believe what he said.
I really don't think that Zakaria "always deliberately smears China". I read some interesting Zakaria articles on Chinese politics. But he really should not comment on economics, never! If Zakaria writes articles about economics it's simply getting absurd. What a pity! I still remember his deplorable articles on economics in Newsweek.
Now Zakaria even mentions the actual mutual U.S.-Chinese dependency, but according to Zakaria, in the end the debtor (the U.S.) is doing the creditor a favor. In fact the U.S. depend on China, as well as China still depends on the U.S. That was true in the past, and it's true until now. But things are changing right now:
1st: China has already started diversifying its investments (e.g. by buying shares of very large and reliable companies, Munich Re being only one example). and
2nd China will reduce it's dependency on exports. It has already started to prepare for this fundamental change.
That means that China will indeed slow down its purchases of American debt in the very near future. And yes, that means that the value of the U.S. Social Security trusts' and pension funds' assets will decrease significantly. It will change the balances of the global economy slowly, gradually, provided that there is no major crisis in the meantime (a significant contraction would hurt the U.S. as well as China).
I still remember Zakaria's articles and comments about the financial crisis in Newsweek in 2007/2008. I remember it very well: it had all been proven wrong, and even absurd.
Intelligent Indians see that the free trade policies that have helped them grow for the past decades are under immediate threat. They also see that when the change comes, India will be losing most of their client list along with China.
Americans are tired of watching jobs leave the country. A course correction is coming.
Both nations should stop worrying about America and start scrambling to build up their middle class with enough consumer power to sustain their own economies when the US gravy train grinds to a halt.
One aspect of the US economic downturn that is staring everyone in the face, but which no one seems to mention is the loss of international goodwill by America's self serving inane policies. Globally, investors are turning away from the US giving rise to the so called BRICS countries..
The sheer disdain which this and previous US administrations had for foreign input/viewpoints on global issues, like trashing of the UN, abrogating age old treaties combined with arm twisting (freedom fries anyone) by the US on issues like the invasion of Iraq, Guantanamo, torture, renditions etc. has driven a deep chasm between the US and the rest of the world.
The US economy thrived exponentially (solely in some sectors) on international goodwill and global respect that brought in immense investments into the economy which now, thanks to Bush/Cheney and Obama's continuation of those foolish unilateral policies has brought America to its financial knees.
As a Chinese, I feel ashame of China Chinese...the west especially the US have been sharing with them technoogies and skills, allow them to prosper by opening up their universities, and most important the US market. China has gone fat at the expense of the west. When the west gets into trouble, China become boastful and arrogant, not knowing that if the west just stop buying anything from them, they go down the abyss too. What fair weather friends they are !
if you are chinese...than u r a chinese american...because u r one of those self-hating chinaman
Dear d,
I am not an american, in fact, i hail from south east asia. I know how chinese think, and am not flattered for my own race lack of spiritual principles.
@Klaus – Good points. Why do these financial reporters get everything so dead wrong, are proved wrong, yet they continue to make a living blathering to the public? As a younger woman, I used to follow msns Jim Jubak and it really irks me to see him continuing as an msn/nbc appointed financial guru after he wholeheartedly bought into the intenet bubble and encouraged the rest of America to run after him.
BTW, I didn't follow the jab at Fox news. My impression has been that they are taking our American debt more seriously and are willing to say what many news outlets are suppressing, namely that we Americans do need to cure our debt addiction, on the individual and governmental levels.
Fareed Zakaria is an indian-American, most indian, who is jealous of China.
I think Fareed is muslim? clue his name is Fareed.
on the contrary, it's most white american harping about China rise
he should at least try to be more subtle...esp since his last name is a dead give away
Well, Americans still standing proud i see.
美国人是世界的主宰
你讲了一个很好笑的笑话
but it's true
Why is intragovernmental debt included in our national debt?? It makes no sense what so ever. The Government gives itself an asset and a liability at the same time. It is meaningless and just a number that gives the Govt an allowance for it's Government programs. That is double accounting and should not be included.
There is nowhere else to go!
Few years back, like in 2007, almoust everyone said US real estate was as safe as safe can be... which has been revisited of course. It required one of the largest financial crisis in US history, but the message got accross the human race.
To the ones that do not see the danger of unsustainable debt in spite having right in their faces (see the paragraph on interest paid), what type of shock do you really need to see the light? Debt is good, but not without limits, and historically it may be that US debt is in unchartered watters.
Not yet convinced? just try to experiment using your own personal finances: increase your credit card limits, keep them drawn up to the max, see what happens! Oh, some people did just that... Ask them how they feel about it! Or go see your bank about it, tell them they will get paid by your children's children – this should get the bank excited so they may suggest few fresh options...
"Too big, too safe"? Just remember Lehman Brothers... people used to say about the same, till was just to late. History abounds in examples of the same nature – no need for another one. Not today, please.
Mr. Zakaria has written "Post-American World", a book in which he described the sitation of the British empire full of debt after a couple of tiring war efforts... the rest is well known history. No lessons to be drawn from this one?
I just believe repeating the same steps that have proven wrong will not yield to a much different result.
But, before solving a problem (i.e. the huge US debt), one may first need to move out of denial and face reality. No matter how much it hurts.
How about changin course, like steadly reducing this debt – remember the US was at its peak when it was the world's largest creditor, not its largest debtor!
If you have not already done so, please check the site below:
http://www.usdebtclock.org/
The United States is a country that has monopoly control of it's own currency. A country is not a person or a business. So your examples do not apply to the United States of America. We can not possibly run out of our own made up currency.
I would say the US was at its peak when it fought facism in wwII, taking on the most massive debt compared to gnp including now by 2x. Sorry we have a balanced budget amendment so Hitler wins??? Earthquake in CA, no money, leave the dead unburied?
I would say the US was at its peak when when it went to the moon carrying the flags of our mortal enemies, if only because we see a better day, someday. That was a over budgeted debt problem, should have never done that.
And today, it is a mixed bag like the last 10,000 years. But if we can become better people, not kill ourselves in the process, not destroy the earth, and work together to manage common threats, then we are at our peak and may last another 10,000 years.
I realise that I am being a bit stupid here, but is there any reason why the % totals don't add up to 100%??
let's say it never happened. the per capita in China would would be $500/y, their infrastructure would not be what it is, we would have no concern as to their sufferring or poverty, exports to them would be blocked so they would have limited access to modern technology, food, or health...
so what, instead we owe them money, $900/person. our debt after wwII was 2x greater per gnp/y than now. after wwII we had the cold war expense and still paid it down below present.
people seem to forget humanity creates the concept of money. the limit is our imagination of its value and common trust. when the republicans toyed with the idea of unilaterally defaulting and destroying internationally our trust we got what we have now-> fear that the US is lazy, stupid, and willing to screw the rest of the world while it commits financial suicide because it can't compromise.
people everywhere seem to forget we have avertred a hair trigger global nuclear war, food supplies are up for most of the world, we have better health, live longer, and complain way too much. If the Chinese have a massive earthquake, or a pandemic and we are there to help them out, how much gold or t- bills is that worth? deeds are more valuable than money.
Russian Rublo could become the new TB market for China, perhaps?
One of Fareeds BEST articles. GREAT job this time.
What a stupid theory!! The money are not measured by face value but purchasing power!!! You can only cheat those stupid people.....
US guys are genius. Chinese guys a little bit stupid than you guys. ok?
whatever, chinese guys have deep deep thought and strategy, see what will happen. Time will tell the truth.
Argument solves nothing but gain hate. Save your words and just think long long time. Economy is much complicate than all of your imaginations. And now, it's related with politics... Don't think you are a superman, Thousand of economist's words may be a crap in front of country's politician... just doing you own favor.
Actually, I do not agree with the author. I believe China is doing us a favor. Have any of you had the Orange Chicken over at the Panda Express??
The United States abandoned morality for economics when extending "most favored nation" trading status to a Chinese regime that brutally represses its own people. It was a choice driven by fear, and greed. It is a shameful chapter in our history, and unworthy of us. Standing by while they manipulated their currency to the detriment of our own economic base, again, driven by fear, and greed, was also shameful.
Washington and Bejing deserve each other now. Both are obsessed with perpetuating their own power above all. Both believe that Government intervention and control of their population is the way to a better future. The Chinese regime is increasingly fearful of their own people, and the backlash that any stall in their economy might cause.
In both places, the seeds of revolution have already been sewn. Sadly it's probably just a matter of time now. The idea that government can give people lives that they have not earned, and do not deserve, can't, won't, and shouldn't endure. The lie will inevitably collapse under its own weight, and people will be forced to take their futures into their own hands again.
great analysis.we enjoy watching your programee for its balanced reporting.thks and all the best to you Fareed
Would I rather own gold or T-Bills - Let me think about that one and I'll get back to you.
I"M BACK..... GOLD
China is not limited to t-bills with USD. They can simply buy other currency immediately. They won't hold onto USD. They are spreading the risk to everyone, so when the time comes, everyone will be slightly screwed and take an even hit.
Come on, boys, be mature. The truth is, if America not able to pay off the bond , you know what ll happen, like what was happening in the past two weeks, Standard and Poor’s Gomposite Index of US would drop even lower, that would lead to an disaster result in return to both Chinese and American economies, causing the serious finical crises in human histories. If American dollar lose it reputation in such crises, how can your guys expect American to stand in such leading position as it is doing now. What would happened is some Europe would take over our position like what we did to UK decades ago to UK.
Chinese people are by nature and throughout history very good at trading. Nothing new in this one. America has only itself to blame for their current financial debacle. I mean Americans were buying homes which they really cant afford them. And so started the great Wall Street disgraceful near collapse which in turn induced a world wide recession.
Now analysts are targetting China with new unfounded rumours. China dont have anything to worry about their government debts. Afterall they have almost US$3.3 trillion in foreign forex reserves alone.
So in a liberal trading world, China is making better money in American bonds by earning higher interests – is simply good BUSINESS sense !
how about they spend it on their own bridges, roads, health care and retierment instead of ours?what would happed then?
They did. We need the Chinese. Really. I mean it.
test comment
China's not doing us a favor. Does China owe us a favor?
We can't even get the Republicans to be nice to our own people. We can't even ask the Republicans, our very own people, to be helpful to our own economy, and we have the nerve to accuse the Chinese?
Fareed Zakaria is out of his frigging mind.
When is enough enough? Stop buying ALL products from them for a while......at least until we owe them nothing....problem solved.
At at least the communist Chinese and the GOP are in full agreement, just as they are when it comes to jobs.
You all guys forgetting that China not european-american country, they have different mentality. different way to consume countries and nations.
they dont prefer to fight (over depth or land) they prefer to intergare and slowly dissolve original polulation within greater china.
this is how they did with mongols who captured them, thay make gin ghis khan their king and later all his other lands become under china control – same happens with US, they slowly migrate to US slowly own it and next day you'll see it will be states of USC instead of USA. same happens in mongolia, when they migrate 1 million on chneese into 500.000 mongolians, same happens even in Canada where Brithsh Columbia and Ontario is already under heavy Chineese control , you will see parts of cities where all the sings are in chineese and all the ppl are chinese.
and China it not an evil country. they just work, they respect family and moral, they reproduse, they dont waste money.
they just better, all russians and americans were doing is catching dreams and world domination fantasy, while chineese were working slowly toward prosperity.
One of the best post ever!
Of course, there is another possibility. The American leader could decide to create more jobs here by admitting that Free Trade hasn't really worked out and is unlikely too and change the course towards fair trade. But hey, if you're make money on all this outsourcing you probably have enough influence to keep the scam going.
the estimated pile of cash surplus China sleeps upon is only a fantasy.
it could hardly do them any good would they want to solve all the remaining problems they have not only with the 300 millions "rich" chinese but particularly the extreme needs of the ONE BILLION left unattended in the countryside and beaten on the head anytime they dare ask or say something.
if the US (and Europe by the way) would only shift back to their economies 10 to 15% of all products now produced in China, that would create an absolute chaos in China, prompt the downfall of the Communist party and have most of them beheaded, in the country and in Peking : AND THEY KNOW IT!
actually, I growingly believe that is the only perfect solution : bring back critical or technologically advanced production to our shores, increase again and seriously our employment without necessitating an absolute growth (only some products already on the shelf and sold, but recentralized in the US and Europe); and create some turbulences in China that will keep them concentrated on playing firemen at home and stop lurking outside with all their mean objectives. Then, China will be abetter place to live for 1.3 billion people and not only for 0.3 and we'll have them off our backs.
All this by the way is not considering either the vacuum that the US will leave behind in AFPAK and neighboring muslim countries : I can easily imagine China being even further involved in trying hard cornering those problems internally with chines muslims going havoc with the help of their neighboring brothers, not to mention those from the Philippines or Malaysia or Indonesia.
So, what China needs above all is modesty, and not this new rich arrogance, and a powerful US of A to help them find an adequate balance for the next 50 to 100 years to come : without the US, China is bust.
The lack of world balance is the lack of chinese balance : let's not designate the wrong culprit.
US is still and will be the most powerful world power in say the next 20 years. But I think in my life time (Im's 27 now), we may see some other country start to compete for that no.1 stop. Which country? China.
In almost every aspect US outplays China in absolute terms right now. But if we look at potentials, (growth) and a much longer history, we know that people in China is actually capable of creating the most prosperous country in the world.
There is old Chinese saying, 30 years in the east, 30 years in the west – meaning everything has a lifetime and life cycle.
Americans, it seems, sure do have short memories. How quickly they have forgotten how many of their sons and fathers died in Vietnam and Korea, and how many sleepless nights they spent worrying about the cold war with the USSR. It was not that Americans hated the gentle Vietnamese people or the serious poetry and vodka loving Russian people. It was that America hated Communism !
And now America is in bed trading with most brutal regime that has ever existed on this Planet. The Chinese Communist Party. The Party that tortures and murders its own people. The Party that persecutes gentle Christians and Falun Gong alike. The Party that spits on every human right that the American people cherish.
Why is this happening? This is happening because Americans have turned their backs on their moral beliefs and let corporate greed take their place. And where has this gotten them? Financial disaster. What goes around comes around.
This is just my understanding, thank you.
Jeff – I'm confused, other than the name, what could todya's China possibly have to do with Communism? Quite the opposite of 'Communism,' China is the free market on steroids – with little care for regulation, rule of law, or human rights. It is in many ways the complete and total opposite of communism, and far more looks like the USA of the 1890s.
Jeff, you're seriously overestimating the moral standards of american policy-making and way of life for that matter. It's a country that worships golf players and characters of stupid tv shows. All the majority of population really cares about is money. And so naturally they'd go in bed with anybody who offers them an extra pair of cheap jeans. It's happens to be China these days.
There are more true Christians in China then there are in our nation.
http://www.thepropheticyears.com/wordpress/214.html
Jeff, this is the reason why God is blessing China. No one can stop Him. He is in control!
There are more true Christians in China then there are in our nation.
http://www.thepropheticyears.com/wordpress/214.html
FACT: Michele Bachmann's husband, Marcus Bachmann, is as qu**r as a 3 dollar bill. Apparently, "praying away the gay"
hasn't worked for him.
This article is not only misleading but inaccurate. Ultimately, it is the US Treasury that makes Social Security payments. If the Treasury has enough money to cover Social Security payments, why did we hear that the government would not be able to send out Social Security payments if the debt ceiling was not raised? Social Security money has been spent already. Social Security payments are nothing but debt. The US is out of cash. Yes, it can print money. But the value of the dollar will then decrease. This WILL happen, no matter what Zakaria or anyone else says.
If there is no budget, the US cannot service its debts. Payments cannot be made. Employees are sent home and those who work in government/VA hospitals and air traffic controllers are basically volunteers at that point. It doesn't matter that there is money in the trust fund, US payments CANNOT be made.
Sell Taiwan to them for 2.4 trillion.
The tragedy is we did sell them out and we still pay them with discount fighter jets hoping to regain their trust.
We USA think Chinese are really stupid!
The tragedy is we did sell them out and we still pay them with discount fighter jets hoping to regain their trust.
We USA think Taiwanese/Chinese are really stupid!
You mean they're not stringing us along like a dealer does to his addicts?
The Chinese have lent out around $10-15 Trillion to state enterprises and private investors to keep their economy humming and right now they're at about 1% bad debt. they predict that bad debt could go as high as 12-14% over the next couple of years. So if 1% of all mortgages were toxic bad debt to start with and crushed our economy; where will China be if they experience double-digit bad debt numbers? There's no such thing as miracles, too good to be true, etc.
What makes Zakaria think the U.S dollar is always going to be #1. Making all these assumptions China THis or that.
What happens if China invest in its currency? Which is what they are thinking.
What gall! You work hard and produce and we consume on the cheap, thus doing you a favor. Furthermore, it is a really sad situation when the national prestige of the US has to be saved by a newbie immigrant with a discernible foreign accent. Things must have indeed gone awry for the once great country.
You got it baby!
..when the cops start finding caches of Chinese Yuan or Euro's buried by the drug cartels by the ton, rather than the dollar, then I'll worry. When the world's illicit economy of drugs, guns, girls is operated on the Yuan, I'll worry....china cant feed itself...when it can, I'll worry...
You can have the biggest military in the world but once a nation goes nuclear; nobody can touch it or we all die.
So all these talk about who has the biggest dick is dumb.
Some folks just won't except the truth. The sky is always falling in the eyes of some folks. This article speeks volumes of truths and you radical right wing nuts just can't except the truth. China is vastly dependant on the United States to sale it's goods. I have always said the decline of America is greatly exagerated. Look at the economies of the world! No one is doing well economically and certainly no major power is doing well. Buying gold and silver is a panic game. Sure the value holds but it does not appreciate much greater than anything else. At best gold and silver hold value better and yes thats a good thing but you most likely won't get wealthy by owning gold rather you were already wealthy when you bought the gold and you want to insure that wealth holds so you buy gold and silver. Good strategy for the wealthy.
But back to China. China and the U.S. will for a long time in the future be dependant on each other and their economies will be inermingled for decades to come. Good Day, Joe.
Intelligent Indians see that the free trade policies that have helped them grow for the past decades are under immediate threat. They also see that when the change comes, India will be losing most of their client list along with China.
Americans are tired of watching jobs leave the country. A course correction is coming.
Both nations should stop worrying about America and start scrambling to build up their middle class with enough consumer power to sustain their own economies when the US gravy train grinds to a halt.
The author is right; China is stuck on a debt-buying cycle in order to keep its economy from tumbling. This point is clear if you factor the following: 1) Chinese population is the largest in the world and while they keep growing, they’ll need to be fed, 2) Chinese expansion to Africa portrays a desperate nation in need of primary resources including oil, gas, coal, and lumber, in order to feed its mass production economy, 3) Any rise of USD vs Yuan would cause a catastrophic decline in Chinese economy and signal the end of our economic crisis as production and investments would return to US soil. Therefore, it is not in China’s best interests to slow down or stop their dollar buying strategy any time soon. As for a war between US and China…only an imbecile would discuss this topic! Cheers from nyc...
"Any rise of USD vs Yuan would cause a catastrophic decline in Chinese economy"'
Andy,
I think you mean any rise of the Yuan vs the USD.
The Chinese have not done with us yet, there is much more at stake for them before they will allow the US to collapse. The current phase is to move over all the high tech and advanced industries we have to China. Apple is an example of how those technologies are being transferred. Apple employs 50,000 sales people in the US to sell the Iphone but employ 1 million people in China to design and build the Iphone. The “secrete” Iphone technologies, like Iphone 5 is already sold in China as a local clone. They have the technology already. China is not shy about the transfer stage. They announced the largest airplane maker in the world with orders already of 900 planes, dwarfing Boeing and Airbus combined. They will need to buy computers and engines from the West, but they insist that all the technologies will be built in China, so they can copy it freely for their own military use. Sophisticated technologies like imaging machines (MRI, PET, etc.) make by GE are already made in China. Their next step is biotechnology. They just announced that they want 80,000 Chinese scientists in biotechnology who work in the US to come back to work in China and built the most sophisticated laboratories (made in US companies). We trained those foreign born scientists and now they take their trade to China. There are endless of examples of how China becomes very quickly the future of innovations in the world and they are doing it not just because they want to be the only superpower in the world, but also because they know it’s just a matter of time before the US will collapse on its own unable to compete in the world. There are 2 industries that China specifically leaving out for the US and those are agriculture and computer operating system. Agricultural products like machinery, seeds, and fertilizer are very important basic necessity in the world and especially for China. China is the largest importer of rice from the US. So they make sure we continue to grow rice and wheat for them and the world because they do not seem to be able to grow them as much. Microsoft has a dominance in operating system Windows and the Chinese decided not to challenge that product until they are ready to pull the plug and let the US die. However, they are not worried about it especially because Open code windows, a free operating system that mimics Microsoft Windows and Open Office, Microsoft Office, made by thousands of US programmers and secretly financed by China, is available to them as well.
I don’t know how much longer the US has before our standard of living will collapse and we all will become unemployed but the writing is on the wall. Most prominent universities like Harvard, Stanford, and others have campuses in China and their professors are teaching in China. GM and GE make most of their revenues in China, and most Wall Street financial companies have office in China. The migration to China is in full swing, interestingly, no one is talking about that!!
Again I don't think we can blame the Chinese. Look at us, we abort millions of unborn every years, if babies were born for some reason, we don't give a s-–ht and our kids grow up trash! Today, foreigners fill up our best universities and our home grown kids end up in lock-ups!
Who can we blame? We are corroding from inside out and that has nothing to do with the Chinese!
Does anyone really think the world will be better off without Chinese, Indians or Mexicans??
Why Fareed is CNN #1 show? Is it because Fareed is smarter than most home-growns?
Agree with you..they are taking advantage of us but its our own fault...people need to start cpmplaining more...I for one, would like to purchase more " made in American" made products...too much is made in China from our own companies.. we control what happens to us by complaining in large numbers...they are buying up our land( I dont think foreigners should be allowed to), they are taking our jobs, they are copying our products , one of they are one of the largest contributors to American colleges in students-will the students stay or go back to China? The government pays their way to learn from us...China knows what they are doing, and we are allowing ourselves to be hurt in the process.I'm just saying, we need to look out for our own FIRST from now on. Immigration should be by invitation only for awhile, choose those we need in job markets, business makers. http://www.thirdworldtraveler.com/Transnational_corps/See_No_Evil_China.html
I see the Chinese propaganda pseuds are out in force again.
Ooooh, an Aircraft Carrier! *lol*
China is decades behind the technological curve and their relentless, childish victim mentality is tiresome.
If you worked for a US corporation based there...if you listened to other countries opinions on China and the US, you may change your opinion. This is a BIG deal and people need to wake up and complain... http://youtu.be/0J7kUuQnD9U
And they are doing it all around the world... I dont know who it benefits more.
Tell that to Washington.......and especially to Obama. He is NOT getting the message. Or much of any other message, for that matter.
This may become the all time worst President, in history.
The author is right, both the US and China are stuck in this relationship, with little or no way out. China has started to invest money into natural resources, which can be seen in Africa, Iraq and Afghanistan. In these places China is using its large amounts of money to purchase what resources these poor countries might have, of course this is all funded through state-run enterprises. China has also invested in technology, but most of that is imported and then poorly copied or misused, such as the recent CRH train that crashed in Wenzhou. I certainly hope the domestically build airplane fairs better. I believe the final place that China would like to invest is in the US, and I don't mean with T-bills, but with out right corporate takeovers or land acquisitions...
China's motivation is, and always has been, to sabotage the American economic, political, and military system. The US politicians are just too scared (or as Obama supporters say: pragmatic). It's too late to do anything really effective until a government is in power that will make the fearless changes. As long as the masses vote in Obama and his wannabe minions and the republicans consider taxes a crime against humanity, you are in for the worst times.
I don't get it! We owe 9x more to our own social security fund, but daily we pay 73+ million towards Chinese loan interest (and even more policing the world). How much is returned to the social security fund each day? Why has our social security fund become a slush fund account for DC politicians to drain on pork barrel spending? Has investing social security dollars yielded a return?? Has selling off social security gained a thing for the future of America? Please tell me... i honestly dont know.
Lastly, Its only a matter of time before foreign powers do have the training and technology to threaten us physically.. You guys can argue military all you want, but Americans who dont pick up a gun or wear the colors make up the majority of our nation, and in my opinion are the beating heart of our economic engine. Sure military spending is enormous, and spurs innovation, but the military foundation is in response to liberating and protecting our first bumper industry... farming. Would it help if we used our arable land and American citizens; rather than guns, soldiers, and debt packaging to solidify the US economy?
If we make our own stuff here, we can stop borrowing from China and employ our people.
So simple yet make so much sense; however, would you able to live on 2 dollars a days and work 8 hrs a day?
It's unfair to say who is doing whom a favor, Beijing need the US bonds to fill up reserve, that is true. However, what's the number U.S government consumer from debt? Zakaria probably also need to post that number compared to 833 USD per sec. The both will go banlcrupt at the same time.
It sounds like we are all trapped in a vicious cycle that will lead to the downfall of civilization.
China is a self supplied country for 5000years. Investigate it before u post.
China Is not Africa, who has food crisis. It produce so much that "Made in China" is everywhere in the world.
Think about what if china stops the supplies all in one day suddenly. No need military action at all.
Why listen to what Zakky boy has to say? He's a confused, angry anti-American liberal import. China doesn't OWE us any favors Zak!
China is where it is, trapped, due to its own false assention that is propped up by a currency that is totally undervalued. They play a game, and so does the US, and as a result, both are trapped in this situation.
XM- If China stops its supply, then it will go broke. Think about that before you post, especially as its "supply" is neither food nor water.
What the Chinese apparently fail to realize is the prosperity some of their citizens enjoy is due to our trade deficit and an artificially low Yuan. If we were to "live within our means", which I agree with to some extent, then their economy would go in the toilet.. With Europe imploding and the US reaching it's limits, they will be toast within a few years.
Also, this is coming from a country who mandates spending by corporations. They spend billions on real estate projects and build towns and malls with nobody living or buying there. It's true... there are dozens of reports of completely empty towns being built and nobody living in them because the average Chinese worker can't afford it. The "demand" is artificial and China will eventually fall. They don't even have enough energy to keep their factories running 24 hours. How can they possibly continue a 8% GDP rate? They , as well as globalization, is on it's last leg.
China is the next bubble. China's worker's are being replaced by robots worldwide.
The problem is robots will probably be manufactured for less in China by Robots. Well at least until someone manufactures a fully automated facility.
Author seems to be enjoying the power of US over China in being able to renege on debt payments. He went as far as saying "we are doing china a favor by paying interests". Come on, since when do we enjoy in being a deadbeat?
Comunist China depends on Trade, if China don't have enough trade she recede. The trade of china is to sell all its goods of low quality in a low prices requested almost for everybody, but if China fail on trade if the request for that goods slow down the development of China will stop and in this case Comunist China will mount a lot of pressure on USA to take back its money for all means China is not doing a favor is trying to make a profitable buisiness.
people argue too much.
hi
wats up BOBBB!!!!!!!!
and china just invested $3.8 billion in canada's oil and gas industry. the US boycotted the alberta oilsands because of the alleged environmental impact so to save thousands of jobs canada turned to china, had no other choice.
STOP SAYING BIG WORDS YOU NERDS
nuthin shuffliin
shufflin every day
nice
that cow is funny
True dat i want one
I would like to write something. I read many of the statements above, and to some extents they are true and to some others they are not. But they miss the main point.
Where are the super Babylonian empire? the Medes and Persians? The Greeks? The Roman empire (they lasted over 1000 years)? The European super powers? England empire? So as they pass, the USA will pass and so will any other power that rises, for there is only one kingdom that remains forever, and it is the KINGDOM OF GOD.
I didn't see the heavens shake in the financial crisis, or the stars fall down from heaven because of the 2 world wars. While mankind is always trying to beat to their chest and state who is the best, he controls the universe with HIS HAND ALONE. Not counting the countless angelical hosts of angels in heavenly armies which outnumber over and over the mankinds whole population over and over. They dominate the spiritual relms, and they dominate the kingdom OF DEATH AND HELL (satans) UNDER THEIR FEET THROUGH GOD. Whatever happens here on earth is merely a permition of God.
There is hope for America. There is hope for China. There is hope for the world. This world as a whole will crumble one day, but as said the Lord Jesus, Savior and Christ:
1 “Do not let your hearts be troubled. You believe in God[a]; believe also in me. 2 My Father’s house has many rooms; if that were not so, would I have told you that I am going there to prepare a place for you? 3 And if I go and prepare a place for you, I will come back and take you to be with me that you also may be where I am. 4 You know the way to the place where I am going.” 5 Thomas said to him, “Lord, we don’t know where you are going, so how can we know the way?”
6 Jesus answered, “I am the way and the truth and the life. No one comes to the Father except through me. 7 If you really know me, you will know[b] my Father as well. From now on, you do know him and have seen him.”
http://www.biblegateway.com/passage/?search=John%2014&version=NIV
34 Then he called the crowd to him along with his disciples and said: “Whoever wants to be my disciple must deny themselves and take up their cross and follow me. 35 For whoever wants to save their life[b] will lose it, but whoever loses their life for me and for the gospel will save it. 36 What good is it for someone to gain the whole world, yet forfeit their soul? 37 Or what can anyone give in exchange for their soul? 38 If anyone is ashamed of me and my words in this adulterous and sinful generation, the Son of Man will be ashamed of them when he comes in his Father’s glory with the holy angels.”
http://www.biblegateway.com/passage/?search=mark%208%20&version=NIV
7 John said to the crowds coming out to be baptized by him, “You brood of vipers! Who warned you to flee from the coming wrath? 8 Produce fruit in keeping with repentance. And do not begin to say to yourselves, ‘We have Abraham as our father.’ For I tell you that out of these stones God can raise up children for Abraham. 9 The ax is already at the root of the trees, and every tree that does not produce good fruit will be cut down and thrown into the fire.”
http://www.biblegateway.com/passage/?search=luke%203&version=NIV
5 Moses writes this about the righteousness that is by the law: “The person who does these things will live by them.”[a] 6 But the righteousness that is by faith says: “Do not say in your heart, ‘Who will ascend into heaven?’”[b] (that is, to bring Christ down) 7 “or ‘Who will descend into the deep?’”[c] (that is, to bring Christ up from the dead). 8 But what does it say? “The word is near you; it is in your mouth and in your heart,”[d] that is, the message concerning faith that we proclaim: 9 If you declare with your mouth, “Jesus is Lord,” and believe in your heart that God raised him from the dead, you will be saved. 10 For it is with your heart that you believe and are justified, and it is with your mouth that you profess your faith and are saved. 11 As Scripture says, “Anyone who believes in him will never be put to shame.”[e] 12 For there is no difference between Jew and Gentile—the same Lord is Lord of all and richly blesses all who call on him, 13 for, “Everyone who calls on the name of the Lord will be saved.”[f]
http://www.biblegateway.com/passage/?search=romans%2010&version=NIV
16 For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life. 17 For God did not send his Son into the world to condemn the world, but to save the world through him. 18 Whoever believes in him is not condemned, but whoever does not believe stands condemned already because they have not believed in the name of God’s one and only Son. 19 This is the verdict: Light has come into the world, but people loved darkness instead of light because their deeds were evil. 20 Everyone who does evil hates the light, and will not come into the light for fear that their deeds will be exposed. 21 But whoever lives by the truth comes into the light, so that it may be seen plainly that what they have done has been done in the sight of God.
http://www.biblegateway.com/passage/?search=john%203%20&version=NIV
" There are more true Christians in China then there are in our nation.
http://www.thepropheticyears.com/wordpress/214.html"
This is the reason why God is blessing China today. No one can stop Him. He is in control!
When we humble to the Almighty God, our eyes will open. We were once blind but now we can see!
Most of you are missing the salient feature of this ongoing debate about us and china. The chinese do EVERYTHING based on what is good for China. This is the only real function of ANY government, something the US has long forgotten. China will posture, bellow etc., but watch carefully every move is orcherstrated to the Chinese advantage. The only think that counts for them, under ANY political system, is what is good for the "middle Kingdom" and it's Chinese citizens. Wake up or learn to kowtow and speak mandrin.
The Chinese have good leaders and US leaders have good lip services.
The Chinese leaders really care for their people; US need to shut the h up about Chinese dictators killing their own people baloney!
You're right that we have lip service and not leaders. Our politicians are just greedy and power hungary. Our people vote for people with chrisma instead of talent and knowhow. Obama was the biggest mistake behind the re-election of the big dummy Bush. We have to blame ourselves for voting these losers in.
@ jack
You're right that we have lip service and not leaders.
-------------------------------------
Something is very wrong with our voting system. Our leaders are actually very intelligent people but somehow they are either making senseless decision (Bush) or become paralyzed (Obama) once they got elected.
if I were Obama, I could have said US citizens to increase population and I think this is the only permanent solution of US economy for long as well as short term. Increase in population will increase talent, increase market, increase cheap labor, increase human resources and will increase everything. At least US should double its population which can be accommodated in mid and central US. See the chinese, they are most populated and that's one of the reasons of their robust economy.
if I were Obama, I could force US citizens stop be the friends of their children but be a good parent as it should be.
China has no historic reason to be the US's enemy. In fact during WW2 they were allies. Prior to that 1850's the US gave up it's interest in the opium trade and left peacefully. If anything China is a wartime ally of the US and now an economic ally as well. War would only make money matters worse and achieve nothing. The wild card is that nutty North Korea and maybe Pakistan after that issue hiding Bin Laden. Both of who are nuclear powers.
when china becomes free and democratic they will become more powerful than USA in no time at all. just imagine 1.3 billion chinese being allowed to go wherever they want, own whatever they want, have as many children as they want, they will overrun the world.
I love this, either way we are screw!
The Chinese need us more than we need them, who else is going to buy all there cheap crap. They need to sell their inferior and cheap merchandise to provide meager wages to their up and coming middle class. To do this they will continue buying our debt. We can always print more money. This financial global market is one giagantic merry go round, you can never get off the players only change.
"The Chinese need us more than we need them, who else is going to buy all there cheap crap" I love this, yooo Amarican lub cheap crap?
"who else is going to buy all there cheap crap"
Yooo Amarican lub cheap crap?
The Chinese and our country have a trade relationship that is completely lopsided. We import quite few hundred billion a year more goods than they buy from us. This is due to a lot of factors like cost, China has a protectionist trade policy and they require local content on major item purchases and a cheap currency.
The problem here are not the Chinese, but the US policy makers whoever they are, who they do not give a hoot about preserving US jobs on every trade agreement that they sign.
Until we get a leadership which cares about the citizens of this country we will be traveling down the road to ultimate financial ruin.
Fart Z. is a real sherlock ... maybe when everyone pays 80% taxes like this genius would love to see ... then he comes up with other brain farts ... like socialism is dead on arrival ...
It is not a comment, but I do curious what your recommended alternative is?
Ha, all your comment is self-centered, no matter USA is becoming the enemy of whole world. We are waiting the day whole world units together to beat USA.
Unlike USA, China have leaders with REAL BRAINS. China doesn't go about creating FAKE & Bogus wars so that senators with war monger mob mentality and their merchants of war profiteers companies in their state could benefit.
U.S.A.'s economy has grown based on the level of debts that U.S.A. has, that is, the more debt US has the more US economy grows – which is the system since World War II. In this debt and growth circle, U.S.A. may have been too far into it to be back on tracks when Obama's proposal of cutting 4 trillion in deficit and raising the taxes on the wealthy people or even stopping Bush's era tax break for the wealthy people and companies...
For China, it has grown good and great with many consumers as well as not so many producers. But, China must take on keep going by looking forward "How far it still needs to go," rather, "How far they have come."
U.S.A.'s mistakes: Wars are economic growths for U.S.A in the past... But, this time, too much into debt circle and putting more interests on getting the oil than real good intentions... made U.S.A to be bad on the world stage, and economic status...
My 2 cents note...
Don't worry, the U.S. is too big to fail. We'll get bailed out.
Education, education, education. Please invest in American education now and we won't have to fear anybody.
We need to get our economy going and not borrow from those short sighted short people. The first thing we need to do is get rid of Obama in 2012. He's lead us into deeper debt instead of the other direction. We need to buy Ameerican or anything but buy Chinese. all we're doing is financing a country that wants our downfall. they just can't wait to see it happen. If we keep Obama in office another four years they just may see it.
I used to believe CNN was a credible, unbiased, news worthy and worth reading media outlet. Nowadays it seems that a plague has run rampant in CNN hq. Idiocy. If I was the chief editor that let this idiot compose this article, I would have killed myself in order to avoid shame, same goes for Fareed. You (Fareed) say that we are doing China a favor while others are saying China is doing the US Gov. a favor. Here is a question, have you ever thought that this is a for PROFIT business and not a charity? If any side is doing a favor for anybody, there wouldn't be profits or at least record breaking profits. If what you say is true, then our corporations wouldn't be making these record profits by cutting expenses and exporting our jobs elsewhere. We aren't doing any favors, we are just trying to either exploit others and profit or cut our expenses and profit. Nonetheless, corporate America is not doing anybody any favors. Not the Chinese and most definitely not the American people. If they were, they wouldn't outsource our jobs and leave even more work for the people that are left behind to suffer. Also your (Fareed) comment about the Chinese "blasting" or criticizing the US Gov while buying bonds sounds childish. So what you're saying is that if the Chinese Gov. and media bashes the US Gov. for being stupid, are they not allowed to buy US Treasuries? And if that, if I bash the US Gov. for being retarded at handling our nations problems, am I not allowed to buy US goods or be an American citizen? Whatever happened to free speech and will? Or is that dead like chivalry? The other question is, does the Chinese media bashing the US Gov. really bother you that much? Are you insulted? Because I can whole-heartily say that many Americans think the US Gov is retarded for letting idiots run the show and screwing over the good, hardworking TAXPAYERS fueling this country. While you (Fareed) have presented some facts (which have no sources and no credibility but I will give you the benefit of the doubt nonetheless) you have ruined your article with horrible speculation and child like responses to those "facts." Please next time, take into consideration of presenting ONLY facts and no opinions as it further deteriorates CNN's reputation and makes me lose faith in humanity.
I am with you. I have much respect for Fareed until I came across this article. Success has overtake him. This time he is crossing the line of no return.
However, I will be sad to see him go.
Keep convincing yourself that China is stuck in a viscious cycle. If it ever wants to break the cycle, it will simply buy up the rest if the land that it doesnt ready own and foreclose on the USA. Wouldn't even need to go to war, just buy the USA. The ultimate irony in the capitalistic great American dream.
China, just shut. Build a Greater Wall around you to box yourself in. Manufacture for your people. Dont export. Feed your people. Live off on your own, exist on your own. No one wants to go your country. No one wants the people coming out of your country. The rest of the world and you, can exist separately.
You can box yourself in your mom's basement or where ever you're typing this while the rest of the civilized world including China moves on without you.
Really short sighted and narrow perspective are not needed in an advancing world.
you a chinaman?
Whether this fellow is a "Chinaman" or not, he seems to at least be able to write English properly in contrast to your kindergarten level writing. And p.s., it's not cool to be racist.
As far as what you say about China, if you've ever studied history (I doubt it) you will see that China was insulated and trading within its borders for over a thousand years, only releasing some goods along the Silk Road. It was to find a better route to China that America was discovered. Then during the Opium War, the British, Americans, and various other European countries invaded China and forced it to trade with the outside world against its will, forcibly addicting the Chinese population to opium to trade for their gold as well as pillaging the country. Unlike your ancestors (if you, Pedro, are indeed Hispanic), the Europeans were unsuccessful in wiping the country off the map, and China has regrown and is now lending money to us rather than using it to build missiles to point in our direction. I fail to see where your animosity comes from unless of course it is purely hatred due to racism.
China obviously wants to see the US economy recovering and growing and consequently buying more Chinese goods. Instead, they US economy is shrinking and now it's too late for them to back out, like being in a marriage with an alcoholic but not being able to get a divorce because of the kids. Hopefully we'll get some treatment from AA and thank China for being there for us... Or alternatively we can say you didn't do it for me, you did it for the children... grateful or not, the solution is not whether or not China needs to lend us money, but how we get our own ship back in shape.
How to work out "Washington is paying Beijing 833 dollars every second."?
Powiem Wam szczerze, że niezmiernie denerwuje mnie krajowy. Dostajemy po dupsku w każdej ważniejszej dyscyplinie i nie jest ważne czy gramy w piłkę nożną, siatkówkę lub kosza we wszystkim przegrywamy i nie pamiętam kiedy coś wygraliśmy, Jest to dołujące i mam obecnie tego dosyć. Brakuje mi aktualnie wielkich nazwisk i postaci w naszym sporcie. Tak sobie myślę czy i kiedy to się odmieni. Przepraszam pesymistyczny, jestem bardzo rozczarowany. przede wszystkim.
This article is slightly flawed, China does own American debt it holds (If you don't understand financial policy keep your mouth shut and dont confuse the population any more than than they are)The American people hold over 50% of this debt. Get a brain, use it and rewrite this article. PLEASE. slayerwulfe
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-In the meantime, they stole OUR technologies (all they do in China is reproduce everything we invent, discover, and create), our military secrets, and fund the very RED army they will eventually use to strike the final blow in our coffin justified by our false "debt" to them. Do you "think" they are arming them for "nothing", and convincing the Chinese that we "owe" them for "no reason"? Will you still "believe" that as the RED Chinese army is marching down your street?
If it weren't for China then NO country would have a superior military. Why? Because China invented gun powder...just a thought.
Let the hate begin.
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No one can or ever should deny the fact that money owed 'is money owed'. It should never matter that we are crossing bourders. They are not Chinese any more than the fact they are people we share this planet with and we should treat them with the same respect we treat our own.
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