An interesting story today from the Motley Fool talks about China’s announcement of a 4-trillion-yuan ($586 Billion US) stimulus package. It says China has supported a $20 billion dollar monthly trade deficit with the US for many years and has artificially depreciated the value of the Yuan to keep it’s export relationships strong.
The article says that now that China is focusing this money inward, it is beginning to decouple itself from this relationship. In a sense, it says that citizens of China have been underwriting the balanced mortgage payments of US citizens. As China now focuses it’s money inwards, it may be able to continue on it’s major growth patterns even while other countries are in decline.
The article is a little scary if you are a US citizen, and probably exciting news if you are a Chinese citizen.
I am one of the US citizens (expats) living in China (Macau) since it has opened up more warmly to the West at the turn of the century. I see the unbelievable amount of construction projects and the quick influx of Western culture to this area. When I say influx of Western culture – I mean the desire for goods and possessions. The mental state of China remains firmly Chinese. And as I am slowly learning, it is a paradigm very different and difficult for Westerners to understand.
If China decouples – it will likely decouple on it’s own trajectory. Read the full Motley Fool article here: