What's China really up to?
Is China our friend or foe? Are the U.S. and China locked in a symbiotic relationship as Brown Brothers' senior currency strategist, Win Thin (yes, that's his name), seems to think? Or are the Chinese quietly making strategic moves to achieve world economic, even military, dominance in our lifetime?
You can find opinions on either side and more when it comes to China. One thing they remain is a bit mysterious, at least to many of us. Yet, you can look at what we know they're doing and speculate as to what it means. Some examples:
China has suggested that the IMF (International Monetary Fund) sell its gold (It holds about $100 billion) in order to raise money to assist in creating development projects for poorer countries.
China changed the "mix" of its holdings of U.S. Treasury securities. As older Treasuries came due, they have reinvested much more of the proceeds in short-term Treasury bills rather than intermediate term Treasure notes (2+ years in duration).
China pressed, at the recent G-20 meetings, for the creation of a new "super-reserve" currency to serve as a unit of exchange in international trade. Since WW II, the U.S. dollar has been by far the "reserve" currency of choice (joined by the yen and Euro to a lesser extent) in trade between nations.
In addition, China has been traveling the world actively, even aggressively buying up assets. They continue to purchase commodities of all sorts, most recently large quantities of copper, which are used in manufacturing. Even as international trade declines due to worldwide recession, they keep buying commodities (at much lower prices than they sold for last year) and, presumably, are storing them in warehouses throughout China. They are also buying manufacturing and financial companies as well as building up their military. Their navy has established a stronger presence in regional waters.
What's going on? How might it affect our future? (We'll take more of a look in coming posts.)
You can find opinions on either side and more when it comes to China. One thing they remain is a bit mysterious, at least to many of us. Yet, you can look at what we know they're doing and speculate as to what it means. Some examples:
China has suggested that the IMF (International Monetary Fund) sell its gold (It holds about $100 billion) in order to raise money to assist in creating development projects for poorer countries.
China changed the "mix" of its holdings of U.S. Treasury securities. As older Treasuries came due, they have reinvested much more of the proceeds in short-term Treasury bills rather than intermediate term Treasure notes (2+ years in duration).
China pressed, at the recent G-20 meetings, for the creation of a new "super-reserve" currency to serve as a unit of exchange in international trade. Since WW II, the U.S. dollar has been by far the "reserve" currency of choice (joined by the yen and Euro to a lesser extent) in trade between nations.
In addition, China has been traveling the world actively, even aggressively buying up assets. They continue to purchase commodities of all sorts, most recently large quantities of copper, which are used in manufacturing. Even as international trade declines due to worldwide recession, they keep buying commodities (at much lower prices than they sold for last year) and, presumably, are storing them in warehouses throughout China. They are also buying manufacturing and financial companies as well as building up their military. Their navy has established a stronger presence in regional waters.
What's going on? How might it affect our future? (We'll take more of a look in coming posts.)
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