China financing imperialism?

[RadioRaheem84]

We may not look at China as being imperialist per se, but something just dawned on me.

Is not China one of the major buyers of US backed Treasuries?

Despite of all the rhetoric about being against the US led Iraq War, did it not indirectly finance it? They surely didn't stop buying US Treasuries or threaten to stop in order to block the US from going to war. Otherwise, the US would've had to raise major taxes to finance the imperialist venture.

Is there something to this analysis or am I grasping at straws?

A little input here.

[Devrim]

We may not look at China as being imperialist per se,

I think the key to the answer to your question is in reconsidering this statement.

Devrim

[KC]

Undervaluing the yuan allows Chinese goods to be much more competitive in the American economy, and so they are able to increase their exports and export revenue. This also allows China to curb unemployment, as the high demand for Chinese goods means a higher demand for Chinese labor, which was essential in switching from a state controlled economy to an open capitalist form.

Also, an undervaluation of the Chinese yuan means that savings will increase; remember that the Chinese banking system is controlled by the government, so when people deposit their money in the banks it allows the government to increase their investments. Because Chinese domestic investments are so risky (due to an inability to determine profitable/stable domestic avenues of investment), the Chinese government invests this money abroad. They can then use this money to purchase US Bonds to maintain this system.

This is the reason that the whole notion of "China owning the US" because it owns so much US debt is stupid, as the two are basically joined at the hip.

What we're seeing now, though, with this current crisis, is that this balancing act that the US and China have been playing for the past few decades is leading into a dead end, which is why we're seeing American politicians attacking the Chinese exchange regime and demanding a revaluation so that US exports can become more competitive. In my opinion this is an incredibly stupid position to take, and until recently it was considered a very extreme position. I remember about 9 months ago Dean Baker was pushing the exact same argument and was criticized heavily for it; however, now we're seeing politicians in D.C. trying to push through bills that advocate that same position, and even Krugman has come out to support it. The problem with that position is that, while theoretically it could make US exports more competitive, in reality the problem is that there really isn't a significant American industrial base to become competitive; advocating the revaluation of the yuan then would have little effect on American exports in the short term and would cause a wealth of problems regarding the deficit and the liquidity of US debt.

BTW in the past (before this crisis) it was argued that this relationship wasn't sustainable, but the argument was based on a slide on the dollar due to a variety of factors, which we now know isn't what happened during the crisis (the dollar actually appreciated during the crisis, mostly because of a high demand for safe avenues of investment, of which US treasury bonds are the safest), so while I think that we're headed into some deep shit, I don't think any past analysis of the relationship between China and the US are entirely applicable.

From here (http://www.revleft.com/vb/showpost.php?p=1696480&postcount=2). I hope this helps.

Although I do find your position incredibly strange. You pose the question of whether China is "financing" "imperialism". I find that your position is incredibly flawed in the sense that you seem to think that imperialism is basically the action of imperialist states which are agents acting in their own singular self interest. This is best summed up in your phrase "financing imperialism." The idea that China is somehow "financing" imperialism because it is doing business with the US government is incredibly poorly thought out. Capitalism is a globally integrated system. US T-bills aren't simply where the US Treasury gets its funding; they also play a very important role on the world market as one of the most stable investments in existence. T-bills are traded on the open market as investments because of this. So it is a much broader tool than one simply used to finance the US Treasury. Anyone with a rudimentary understanding of the world economy should know that. It's econ 101.

As for financing "imperialism," I disagree with this because imperialism does not equal the US. Like I said previously, this is a globally integrated system and not simply the actions of various "imperialist states".

I'm having trouble communicating my thoughts because I'm really out of it right now. Fuck it.

EDIT: I also disagree with your analysis that "China isn't imperialist per se". In short, I think you are being much too black-and-white about what is and isn't imperialist and what that actually means and how it plays out in the global economy. The world isn't that simple.

[stella2010]

Perhaps a globalism chapter from a geography/political text could help you understand a little more on the subject.

That CHINA has a massive population. it has MEGA cities. Although a communist state it holds a market economy that has allowed a class of people to become very successful. Mostly from those MEGA cities like BEIJING, SHANGHAI and HONG KONG. Through Globalisation these rich and powerful people can become interconnected throughout global economics. As those impulses from those MEGA CITIES grow and connect further, they will create an impact on a much wider economic impetus. If trading relations with between the USA and CHINA means the that CHINA is funding imperialism then CHINA will be funding imperialism. Money is now Global and is always changing.

No one knows what they are funding anymore than you do. An economist attempts to understand this. :cool:

[AK]

http://www.zgeek.com/forum/gallery/files/1/0/6/8/1/cruise-control-for-cool.jpg