As you pointed out, another Asian Crisis may result from China's flu. That is one of the reasons that some academics recommends we should adopt the floating Yuan regime because it allows the central bank more flexibility to manage the Money-driven inflation. However, a quasi-open system may be more suitable for current China’s developing status.
I haven’t backed to China in the past three years. But I think China is experiencing the same process through which China, as a country, should finish the first step of capital accumulation. Only when the country level gets rich, it can reimburse its wealth to each resident. This is what we have seen in the Canada and many European Countries. When every resident becomes rich, inner r real domestic demand will rise, as you wished.
Since the global economy becomes more integrated, if any major countries in the chain gets some cold, then everyone feel the impact. Thus, whatever US or China coughs, the worlds will get allergy.
Thanks again
不忘中囯 发表评论于
Sorry for missing one point. The cheaper Chinese labor cost and lower Yuan make the imported good relatively cheap, given the same income level of US family. On the other hand, China's booming is largely export-driven. That is why our government strongly defends our FORX regime, because of the inner demand is still weak.
Thanks for sharing your opinions
不忘中囯 发表评论于
Well, Yes or no. Actually, the demand of US consumer is the only real driver of the global economy, which has supported the growth of China and Europe. But it is the cheaper labor cost and lower exchange rate that help US consumer maintain their unlimited consumption appetite with historically high level of debt on their shoulders.
