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**plaiskegizils** · 06-01-2007, 10:00 PM

China's foreign reserve four years ago was about 200 billion USD...China's reserve today is over 1.5-7 trillion USD.

Its domestic demand ratio in comparison to US demand is about .90 cents. This means that if the US stops spending 1 USD in trade with China, it's(China's) local demand would still cover .90cents of that loss dollar. In the past it was .50cents meaning they loose a huge chunk of business if the US economy stops spending on them...hence, there was the saying, "If the USA sneezes, we catch a cold." Today its more, "If the USA sneezes, we hand them a tissue."

If you look at recent market trends, it was speculation/actions/market adjustments in China that caused Wall Street to jump.

Ten or so years ago, you'd go for a meeting with an official and leave a laptop in his office. He'd then call you up and say, "Oh, you left a laptop here." You would then reply, "Laptop? what laptop?" This was a bribe. Today, they guy would be insulted by this...one laptop, he could give you twenty. Now its more, "Oh, your kids want to study in Eton? Let me sort that out for you, my buddy is an old boy."

India...India has great potential. But that potential is only good as when it is realised. The danger with India's economy is that it is operating under a double deficit, which means its fine so long as foreign investment happens...but if for some reason that money pulls out india would be in trouble. A true life example from the past is Thailand, the asian economic crisis, same thing...Thailand had a double deficit, foreign investors got spooked, pulled out and the Thai economy crashed.

Very interesting times...

06-01-2007, 10:00 PM	#12
plaiskegizils Join Date Oct 2005 Posts 549 Senior Member	China's foreign reserve four years ago was about 200 billion USD...China's reserve today is over 1.5-7 trillion USD. Its domestic demand ratio in comparison to US demand is about .90 cents. This means that if the US stops spending 1 USD in trade with China, it's(China's) local demand would still cover .90cents of that loss dollar. In the past it was .50cents meaning they loose a huge chunk of business if the US economy stops spending on them...hence, there was the saying, "If the USA sneezes, we catch a cold." Today its more, "If the USA sneezes, we hand them a tissue." If you look at recent market trends, it was speculation/actions/market adjustments in China that caused Wall Street to jump. Ten or so years ago, you'd go for a meeting with an official and leave a laptop in his office. He'd then call you up and say, "Oh, you left a laptop here." You would then reply, "Laptop? what laptop?" This was a bribe. Today, they guy would be insulted by this...one laptop, he could give you twenty. Now its more, "Oh, your kids want to study in Eton? Let me sort that out for you, my buddy is an old boy." India...India has great potential. But that potential is only good as when it is realised. The danger with India's economy is that it is operating under a double deficit, which means its fine so long as foreign investment happens...but if for some reason that money pulls out india would be in trouble. A true life example from the past is Thailand, the asian economic crisis, same thing...Thailand had a double deficit, foreign investors got spooked, pulled out and the Thai economy crashed. Very interesting times...
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