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China controlling more of US economy - 12/21/2007 3:52:24 PM

Level

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NEW YORK - There's a good reason schools across the country are scrambling to find people who can teach Chinese: It's quickly becoming business' second language as Wall Street seeks to tap China's $1.3 trillion in foreign reserves.

China has been making increasingly aggressive investments in some of the world's most prestigious financial companies in recent months — most of them American. Morgan Stanley, Bear Stearns, Blackstone Group, and Britain's Barclays have all negotiated major stakes by Chinese government-controlled investment funds.

Investment banks ailing from the subprime mortgage mess are looking for money to shore up their balance sheets. And China is leading a surge of strategic investments from Asia and the Middle East that so far have sunk about $25 billion into Wall Street banks.

That's just the start of what some believe is a dramatic reversal of financial power in the shadow of Wall Street's credit turmoil.

"Both Chinese private and government interests are controlling more and more of the U.S. economy, and this is a result of the big trade and budget deficits we have," said Alan Donziger, professor of economics at Villanova School of Business. "These investments will make the U.S. somewhat less independent, but this is inevitable when we live in a global economy."

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RE: China controlling more of US economy - 12/21/2007 4:16:20 PM

OrionTheWolf

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Economic strategy to inact foreign policy? Wonder who's play book they have been reading?

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RE: China controlling more of US economy - 12/21/2007 5:04:52 PM

awmslave

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quote:

Both Chinese private and government interests are controlling more and more of the U.S. economy, and this is a result of the big trade and budget deficits we have," said Alan Donziger, professor of economics at Villanova School of Business. "These investments will make the U.S. somewhat less independent, but this is inevitable when we live in a global economy."

This professor sounds like it is well justified and "normal development" US selling off its assets to communist China. It is not inevitble in global economy. It is inevitable only when a country makes bad trade deals and lives over its means.

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RE: China controlling more of US economy - 12/23/2007 1:25:17 AM

DollysSissyGirl

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I do readily agree that China having most favored nation trading status with the US has enabled their economy to grow tremendously to the point of them having garnered a very small proportionate piece of our tactical economy. If not though for China and the never ending supply of fast, cheap, often times dangerous goods, many Americans unfortunately would scoff at the idea of the prices we would need to pay domestically. We no longer live in a world where you can have it both ways. The world economy being so strong ultimately benefits the US as we still are the direct drivers of the worlds goods surplus output. We ourselves are to fundamentally blame for a horriblel savings rate and over exposing ourselves to massive amounts of debt. We are all quick to blame the govt. for the deep deficit we have succumb to but why should we expect our govt. to be so radically different from our own pathetic average savings rate of -1.2%. The responsibility ultimately starts at home. Instead of pointing the proverbial finger, we need to begin to start taking action for ourselves. We are the reason fundamentally why China is taking an interest in our banking system. Think about this , if Americans had not over extended themselves to buy into the "gold rush" of housing just as we did most recently in the "tech bubble" many of these banks would not have succumb to such large write offs and depreciation on their books. It is easy to blame the banks for extending the credit with no fail safes in place, but a the same time we all know the Jones could never afford that house they moved into around the corner for a reason. China would never make those investments if it did not think the US could continue to sustain growth and Americans be dependent on credit which the baking system capitalizes and profits upon.One thing we can all learn from this is the ability to rise with the tide. To accpet the fact that this truly is a global economy and the countries which are now emerging markets Brazil, India, Russia, China let alone Vietnam, Malaysia and some of the Baltic states will ultimately complete a maturation process. Instead of taking the wait and see approach take advantage for yourself as a capitalist and invest in these countries which many claim are doing well because of are mistakes. We all have the opportunity and right to blame but in the same instance we also have the opportunity to capitalize on the wealth to be created by sound investment decisons in this new world economy which has just begun. Thanks so much, have a great day !

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RE: China controlling more of US economy - 12/23/2007 1:38:29 AM

Leatherist

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Two major factors here.

Excessively high taxation on american busniness, leading to more and more outsourcing and imports for retailers to remain competitve in a global economy. Try NOT buying chinese goods now.

And the chinese government purposely depressing the value of it's own currency to build it's own economy and industrial base. I'm sure they realized there was no way they could win against us in a military maneuver-that would only lead to scorched earth on both sides.

Instead, they used our own wasteful government and capitalist greed against us. And we, the apahtetic,watched and allowed it to happen.

And they are now well on thier way to *buying* us.

Damn smart if you ask me. Noodles, anyone?

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