Each time I visit China I am struck by how parochial the news is and the people are. This week the Chinese government made a public statement suggesting that the United States should extend the debt ceiling in order to maintain world confidence in its economy. It was hardly a magnanimous suggestion considering the China is the single largest holder of U.S. treasury bonds. A U.S. default on it debit would be very bad for the Chinese government.
China also announced this week that it had purchased an old aircraft carrier and was refurbishing it. This should not be seen as any kind of threat to the U.S. but for some reason it did cause a bit of consternation in the world community.
Asia is a very big place and China more than has its hands full managing what is seen as an overheating economy (despite reports that several Chinese factories have declared bankruptcy in the past couple of months – that sure does not sound very socialistic to me). I’ve noted it in prior postings that China is open for business. And it’s open all the time. The idea that China is attempting to ‘defeat’ the U.S. (economically) and ‘win’ is not apparent in anything I’ve seen or heard.
Walking around Hong Kong on a steamy Friday afternoon the hustle and bustle of a vibrant city was exhilarating and impressive. I walked through the mall at Times Square near Causeway Bay and it was filled with shoppers who were not window shopping – they were buying and buying at top end stores. While there were some westerners the bulk of the shoppers were Chinese.
In the U.S. the current ‘recovery’ appears to be moving in super slow-motion. While China focuses on continuing to develop an economy based on increasing domestic consumption, the purchasing power of Americans remains a powerful force. However, it seems to not be quite as powerful as it used to be.
As the quality of Chinese-made goods continues to improve (and the costs increase), what concerns me is China looking to other countries to sell its products while it tries to stir domestic consumption. The U.S. should not be threatened by China’s rise. In truth the U.S. might want to be more concerned that the Chinese will begin to ignore the U.S. if we don’t get our act together soon.
Being ignored is the road to being irrelevant. I’m not saying the U.S. is even close to being irrelevant but I don’t think I’d feel very good about the U.S. being ignored by China. Do you think that could happen?