Tuesday, July 31, 2007

China to Paulson: We're No Threat

China tells Paulson it's poor and poses no threat
China on Tuesday deflected U.S. pressure for a faster rise in the yuan and bolder economic reforms by telling visiting Treasury Secretary Henry Paulson that it is still poor and poses no threat to anyone.

Paulson's visit coincides with a drive by U.S. lawmakers, frustrated by America's record trade deficit with China, to press Beijing upon pain of sanctions to allow open markets to set the yuan's value.
China would like for you to think that it is worried about the millions living in abject poverty, and is using that to justify retaining it's restrictive economic polices.


Actually, it is their restricitve polices that have created that abject poverty in the first place. China is now in the trick bag you get yourself into when you make up your econometric data as you go along. Pretty soon, you have no reference point upon which to make economic policy decisions.

China is just printing money to keep their exchange rate artificially low for trade reasons, so they are creating inflationary pressures which may spin out of control. There is no easy way out of this for them, especially with their made-up economic numbers.

Imagine trying to land an airplane on a dark aircraft carier at night; that is the equivalent task that China is facing now.

Good luck with that.

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