Re: [Pen-l] Paul Krugman on the British Empire

[raghu <mraghu01@xxxxxxxxx>]

On Fri, Apr 3, 2009 at 4:50 PM, Robert Naiman
<naiman@xxxxxxxxxxxxxxxxxxxxx> wrote:
> In effect, China was subsidizing the purchase of its exports by
> inflating the value of the dollar relative to the yuan. Given its
> extraordinary growth over the last decade, this was clearly an
> effective development path and it may justify any subsequent loss on
> its dollar holdings. (Obviously, alternative paths were possible,
> whether they would have been better for China is an open question.)


The plutocracy that rules China is obsessed with the idea of restoring
the "Middle Kingdom" to great power status i.e. political and military
power for the ruling elite.

Accumulating huge amounts of dollars helps them achieve this. I doubt
they care one way or another what is "better for China" except to the
extent it increases their prestige abroad.
-raghu.



--
Seeing is deceiving. It's eating that's believing.
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