bricki

Death of the Asian Development Model: Exporters Chasing a Failing Strategy?

Japan has proven that this strategy can only take you so far. Once your economy develops to a western standard of living additional growth by this mechanism cannot take place because you have no cost advantage over locally produced goods. Worse yet we are heading to an era where transportation costs are a significant fraction of the price of the imported good. Now Japan is in a bind because of its aging workforce and low birth rate.

China is unlucky to have this economic environment; demographics and accumulated debt are the immediate reasons why the US will not act as an effective sink for their exports to the degree needed. But more fundamental are the relative sizes of the populations. The US bore a lot of the cost of developing Japan with its population of 100 million. Bearing the cost of developing China with a population 13 times larger to western standards is not possible. Mercantilism or whatever you wish to call has its limits. If China wishes to achieve a western standard of living for its population it will have to find a new model.

The Impact of a Global Recession on Asia

It quite amazing how the Chinese are so anxious to bite the hand that is feeding them. Sooner or later these aggressive attitudes will backfire.

Globalization is a mutual arrangement. If you want to maintain a trade imbalance running in the 100's of billions and closed markets it behooves you to play nice elsewhere.

On Mar 13 10:14 AM User 371080 wrote:

> Therein lies the genesis of the recent ramping up of anti-China rhetoric
> from the Americans as well as American attempts to cause yet another
> Tonkin Gulf USS Maddox incident.
>
> One can only surmise it to be an attempt to make an excuse for America
> to default on loans from the Chinese without being seen to actually
> be defaulting.