China now owns so many dollars that it can’t sell them off without driving the dollar down and triggering the very capital loss its leaders fear.
There is a solution. China wants some of this debt to be transfered to be denominated in RMB from dollars and they want to be able to invest in strategic companies like Caterpillar GE or even Boeing. What the US wants is for China to spur consumer spending, allowing US companies free range to implement the distribution networks they have perfected in america (i.e. Wal-Mart to Credit Cards). This is a intelligent compromise that would bind the nations closer together and make them both stronger.
But the problem is there simply is a huge lack of trust. Americans see china as totalitarian and repressive and the Chinese see america as imperialist and repressive. Neither really wants to be bound closer to the other, even if it is in both of their strategic interests.
One can only hope that over time the mistrust built up between our two countries (legitamate and otherwise) will dissipate and allow a powerful partnership to develop. The problem is there isn't much time. We have many problems to solve, doing so together really is our only chance to do so.
There is a solution. China wants some of this debt to be transfered to be denominated in RMB from dollars and they want to be able to invest in strategic companies like Caterpillar GE or even Boeing. What the US wants is for China to spur consumer spending, allowing US companies free range to implement the distribution networks they have perfected in america (i.e. Wal-Mart to Credit Cards). This is a intelligent compromise that would bind the nations closer together and make them both stronger.
But the problem is there simply is a huge lack of trust. Americans see china as totalitarian and repressive and the Chinese see america as imperialist and repressive. Neither really wants to be bound closer to the other, even if it is in both of their strategic interests.
One can only hope that over time the mistrust built up between our two countries (legitamate and otherwise) will dissipate and allow a powerful partnership to develop. The problem is there isn't much time. We have many problems to solve, doing so together really is our only chance to do so.
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