In this BOP news article Ian Welsh describes, among other things, the strange symbiosis of US economy running on real-estate fuel and far eastern economies keeping low labor costs to keep the export growing.
I think one of the keys to better understanding the willingness of Chinese economy to subsidy the US consumers lies in the culture and mentality of Chinese people. Remember, we are different.
In Western civilization, God is giving. If you ask the American why he is ready to burn and spend all the money and resources given to him and live ruins to his children he will say that God gave him oil and money because he is a good Christian and God will keep giving to his children as long as they are good Christians, too. There is no way future generations will starve, the good Lord will fix that.
It’s hard for me to exactly understand the Chinese mentality, but not impossible. That country is based on the mix of Daoism and Confucianism. Confucius teached that only strong morality and respect of tradition must govern one’s wills. Tao is teaching that the world’s harmony is guiding the one’s steps the way this harmony is preserved.
To simplify things, it means that the most powerful Chinese minds are looking 1,000 years forward for questions and 1,000 years back for answers. Expecting that they would rush for immediate results is nonsense. They rather sit and think for 10 years changing nothing and then do it right rather than do something the way Uncle Bush is asking.
If the world harmony is seen the way it good to lend money to Americans now but to prosper 50 years later, then that’s the way it will be done. Please don’t ask questions, the answers are unthinkable for western mind.