Update about China: a new center of the world
Events in China will affect the world — including America — like few or no other nations. As these articles show, we can only guess at what will happen.
- Powerful insights about China
- A note about China currency, the RMB
- Update: China’s ugly demographics
- For more information, and an Afterword
(1) Powerful insights about China
- “Nurturing the Chinese Economy“, Joe Studwell, Far Eastern Economic Review, December 2009
- Why China’s exchange rate policy is a common concern, Martin Wolf, Financial Times, 9 December 2009
(2) A note about China currency, the RMB
As Martin Wolf explains in the above article, China must allow its currency to appreciate in value — breaking its peg with the US dollar. The consequences for China and the world probably will be unpleasant if they do not do so — or do so too late, or poorly execute the transition.
I doubt this will be easy to accomplish, for these reasons:
(a) While the need is obvious and urgent, China has grounds for concern. We pressed Japan to revalue the Yen in 1985, resulting in the Plaza Accord. They suffered a massive asset bubble and crash, from which they have yet to recover. This might make China skeptical about our advice.
(b) There is strong if vague resistance in many nations to international coordination of public policy.
(c) Appeal to team spirit probably will no suffice. China will want concessions in return, which we might not agree to.
(3) Update: China’s ugly demographics
- “China’s Family Planning Goes Awry“, Nicholas Eberstadt, Far Eastern Economic Review, December 2009
For more about this revolution sweeping the world (compared to which the jihadists are trivia), see the FM reference page Demography – studies & reports. Articles about China from that page:
- “A Surplus of Men, a Deficit of Peace: Security and Sex Ratios in Asia’s Largest States“, Valerie M. Hudson and Andrea M. Den Boer, International Security, Spring 2002
- “Power and Population in Asia“, Nicholas Eberstadt, Policy Review, February/March 2004 — “Demographics and the strategic balance”
- “The Graying of the Middle Kingdom: The Demographics and Economics of Retirement Policy in China“, The Center for Strategic & International Studies, April 2004
- “Will China Grow Old Before Getting Rich?“, Goldman Sachs, February 2006
- “China’s Growth to 2030: The Roles of Demographic Change and Investment Premia“, Rod Tyers and Jane Golley, College of Business & Economics, Australian National University (May 2006) — 36 pages
- “The Graying of the Middle Kingdom Revisited“, Center for Strategic and International Studies, 22 April 2009
(4a) For more information from the FM site
Reference pages about other topics appear on the right side menu bar, including About the FM website page.
Posts about China:
- Power shifts from West to East: the end of the post-WWII regime in the news, 20 December 2007
- What you probably do not know about China’s food crisis, 21 April 2008
- China becomes a super-power (geopolitical analysis need not be war-mongering), 9 July 2008
- Words to fear in the 21st century: Lǎo hǔ, lǎo hǔ, Lǎo hǔ, 14 July 2008
- A different perspective on the US and China, seen by an American living in Russia, 23 March 2009
- China – the mysterious other pole of the world economy, 22 July 2009
- Another big step for China on its road to becoming a great power, 27 July 2009
- Will China collapse?, 5 August 2009
- A revolution is not a dinner party. Thoughts about the future of China, 19 August 2009
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