Yes. China will save all of us from a prolonged recession and here’s why:
- Political Will
- Ability
- Exports, Exports, Exports…
Political Will – China has a good thing going right now… it held a successful Summer Olympics despite the rush of many construction projects (which resulted in the unpublicized deaths of Chinese workers) and a “moratorium” on criminal executions (although it was estimated that 375 executions were held during the Olympics). However, on the world stage, China seemingly held its own and its citizens are generally proud of the 2008 Olympics. What China doesn’t need right now is civil unrest, protest, or general dissent. The Chinese government will do whatever is necessary to hold off any political unrest.
Ability – China holds approximately two trillion $USD in foreign currency cash reserves. Trust me, if this country wanted to make an impact it could – and it could do so tomorrow without an election and without the consent of the house or senate. This is a unilateral decision and the money is already in the bank.
Exports, Exports, Exports – What would motivate China to help the world economy? Well, the Chinese want to grow their economy 8% this year – down from double digit growth. To maintain this growth curve, Chinese exports cannot sag. Guess who is the #1 consumer of Chinese goods? The U.S.A. Trust me, China will do its parts to stimulate the U.S. economy. Watch in the coming days as China dwarfs the U.S. spending on “economic recovery”.
