5 Answers | Add Yours
One of the concerns I have heard has been the fact that China does hold so much of our debt. As mentioned above if they chose to quit "financing" our deficit spending it could spell big trouble for the US. I can not remember or find the article right now, I have also read that a growing number of US businesses are owned by Chinese businessmen.
In addition to the above response, let me focus on two specific impacts China has on the US as well.
First, China is the largest single holder of US Treasury bonds. That is to say, when the US runs a deficit, China is one of our biggest financiers. According to the Washington Post (in a slightly dated article) China owns about 10% of all US debt, which puts it at well over a trillion dollars. At some point, they may decide to stop buying more debt and it will become harder for the US to find money to borrow for spending. They could also decide to dump their US holdings as too risky, which would have a dramatic and negative effect on our economy. However, since we are their best customer for exports and manufactured goods, that is unlikely in the near future.
As the Chinese economy expands and becomes more diversified, and as the Chinese government is able to invest more in its infrastructure and technology sectors, they also purchase large amounts of high tech goods from the US. Just one month ago they ordered more than a billion dollars worth of Boeing passenger jets, and they are pretty regular customers. Giant purchases such as these have largely insulated my home state of Washington from the worst effects of the current recession.
This is a huge question. Let me answer briefly, focusing on two areas -- economics and power in general. Basically, I will say that China is "rising" and that the rise of a new power always has an upsetting effect on the nation that currently holds power in the world or in a region.
China is rising economically and that brings with it an increase in its general power to influence other countries of the world. This seems especially true now as its economy is growing rapidly while that of the US is pretty stagnant. As this happens, the US comes to feel more and more threatened by China both economically and politically.
Our politicians (and many people) like to blame China for many of our economic problems. They say that we would be okay if China would let their currency come to its proper level and quit being protectionist. We also worry about China trying to extend its power -- it is building an aircraft carrier and seems to be flexing its muscles in Asia and Africa.
In general then, China's rise is making the US feel more nervous than it had before.
are you in debate??? because ths is actually what we are debating right now. im supposed to be finding evidence for my constructive.
We’ve answered 319,670 questions. We can answer yours, too.Ask a question