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1/5
An important point over which Chen Yulu is right to worry. The US-China trade relationship is a kind of machine that converts US consumption into Chinese savings, which in turn are likely to fuel more liquidity bubbles and speculative capital flows. https://www.scmp.com/economy/global-economy/article/3117965/will-bidens-us19-trillion-american-rescue-plan-be-boon-china?utm_source=Twitter&utm_medium=share_widget&utm_campaign=3117965
An important point over which Chen Yulu is right to worry. The US-China trade relationship is a kind of machine that converts US consumption into Chinese savings, which in turn are likely to fuel more liquidity bubbles and speculative capital flows. https://www.scmp.com/economy/global-economy/article/3117965/will-bidens-us19-trillion-american-rescue-plan-be-boon-china?utm_source=Twitter&utm_medium=share_widget&utm_campaign=3117965
2/5
This wouldn't be the first time something like this will have happened. The three biggest trade surpluses of the past 100 years were the American surplus of the 1920s, the Japanese surplus of the 1980s, and China's more recently. I don't think it is at all a...
This wouldn't be the first time something like this will have happened. The three biggest trade surpluses of the past 100 years were the American surplus of the 1920s, the Japanese surplus of the 1980s, and China's more recently. I don't think it is at all a...
3/5
coincidence that the first two were associated with devastating asset bubbles, mainly in the surplus countries but also to a lesser extent in the big deficit countries.
The mechanism is complex, but there is likely to be a big difference between China's allowing inflows...
coincidence that the first two were associated with devastating asset bubbles, mainly in the surplus countries but also to a lesser extent in the big deficit countries.
The mechanism is complex, but there is likely to be a big difference between China's allowing inflows...
4/5
to drive up the RMB and slow the economy and its attempting to keep growth rates high by either holding down the RMB or by countering a stronger RMB with lower interest rates (as Japan did in the 1980s). The recycling of huge trade surpluses, as Charles Kindleberger has...
to drive up the RMB and slow the economy and its attempting to keep growth rates high by either holding down the RMB or by countering a stronger RMB with lower interest rates (as Japan did in the 1980s). The recycling of huge trade surpluses, as Charles Kindleberger has...
5/5
pointed out, often acts as the "displacement" that sets off asset bubbles. Given the sheer size of the current recycled surpluses, it would be surprising if something similar didn't happen again.
pointed out, often acts as the "displacement" that sets off asset bubbles. Given the sheer size of the current recycled surpluses, it would be surprising if something similar didn't happen again.
