http://www.businessinsider.com/roubini-bremmer-bloomberg-us-china-2012-1
So it's better if you watch the video... the 'article' is just some of the key quotes from the video. It is a good interview, about 13 minutes long, but a lot of the good stuff is in the beginning.
The interview touches on a variety of global economic issues, but the main one being the relationship between China and America. Both countries are experiencing slow growing economies, China expected to be worse than America, and both are going through a political year; America with elections, and China with recent unrest. Experts are worried that relations between the two countries are getting further away from peaceful, and that the global economy could be negatively impacted.
"There is high risk for an unpleasant foreign policy out of China." Experts worry whether or not it may induce conflict between the US and China.
However, multinational corporations may feel differently.
"When it comes to currency, the Chinese have been moving at their pace, very slowly, very incrementally, and American politicians have to show they don't like it. But to be clear, American multinational corporations are perfectly happy with it, they manufacture in China. They are on the side of it."
Will China's political and economic instability impact America's economy? Global economy?
How will our finance policy be effected if a change in China's foreign policy initiates violence?
Hopefully it does not turn into violence...but yeah strained relations with China are not good for the U.S. There are so many companies that manufacture there and it keeps prices down for U.S. consumers. On the other hand, if companies are going to be discouraged to manufacture in China then it will create jobs here in the U.S. but prices will go up. It brings up another tradeoff, offshoring jobs and low prices or keeping jobs on U.S. soil and high prices. Hopefully we can reach some sort of agreement with the Chinese so businesses can operate normally.
ReplyDeleteGood article Max
ReplyDeleteYes, it is very important for the U.S. to maintain a good relationship with China. We as a country gain a lot from the trading we do with them. They have a comparative advantage in the production of a lot of goods, making it possible for the U.S. to specialize in production of other goods. Also, it may not necessarily create more jobs here if we were to stop trading with China because there would be less need for us to produce certain exports. So really it may just move some workers from one industry to another.
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