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Old 08-08-2007, 11:49 AM
Copernicus Copernicus is offline
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Join Date: Jun 2003
Posts: 6,912
Default Re: China threatens \'nuclear option\' of dollar sales

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At some point China's internal market is going to mature. Then it wont need to exports so much to keep its economy going.

Then it can exercise this option at its leisure.

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Not necessarily true. Japan's economy is certainly mature and they are still heavily dependent on exports. The U.S. & China are going to be dysfunctionally co-dependent for the forseeable future.

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Does Japan have an internal market of 1 billion people? 1 in every 6 people on earth are part of China's internal economy. China could have the largest economy in the world and never export a thing.

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And why is it that they don't already, and if they lose the US market due to their own obstinance, what makes you think they wont return to the policies that put them so far behind to start with?

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I said "at some point" meaning that at some point in the future China's internal economy will be mature. At this point .e.g. NOT NOW it can pull the nuclear dollar trigger with much less fear of catching radiation sickness from the fall out.



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If their economy has matured to the point where they can afford total isolationism the health of their economy will still be based on growth, as ours is. There will never be a point where businesses can suddently turn isolationist and continue to grow.

The US certainly is a market with critical mass. We don't NEED German and Japanese cars, we don't NEED fruit from Chile, we can build our own Ipod's quite well if we had to. Despite that we would never shut down our trade partners because the reduction in the economy would take decades to recover from.

China would have an even more severe problem because of their size and diversity of trading partners (assuming we don't bully them into eschewing trade with the Axis of Evil first).

We've got much more severe problems to face from within for the next decade than China going "economic nuclear".
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