Tuesday, 21 November 2017

And if China Calls back its Money from the USA.....?



China is a big producer, but their people are not big buyers. China is an exporting nation. The Chinese produce for other nations, primarily the USA. China is basically its prosperous, exporting coastal regions and the poverty struck interior where the standard of living for the billion plus people that live there is about the same as it is in Ghana. These people are not a significant market for Chinese production. 

If China was to repatriate its investments in the USA, it might collapse the American economy….in fact, it probably would….but, it would implode China.  China depends on America! If America sneezes, China will catch pneumonia. 

Canada has traditionally tied its economy to the USA. That is the way the natural transportation routes go. It is much easier to ship to the USA than to elsewhere. The notion that some Canadian politicians espouse that we should be less reliant on American markets and export to China is myopic. Yeah, if the USA falters, Canada stumbles, but China even more so. Trading with China is another way of being reliant on the USA. My sense of the situation is that Canada should position itself as an adjunct to the USA economy, but should do it competitively with an emphasis on technological development and marketing sophistication. Canada, be part of the American economy, but be the most outstandingly profitable part of it.  

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