“China would face fewer trade wars with the rest of the world if its people were less thrifty.”
“China angers its trading partners because it sells more goods than it buys, earning more than it spends. The underspenders include its households, which save at an unusually high rate.”
“Underspenders” is such a funny term. In other contexts it might be called “being financially responsible” to spend less than you earn. But when Chinese people do it, it’s a problem, apparently.
In america, if you save money you are an based chad investor. In China, if you save money you’re a filthy virgin underspender.
If the economy is tumbling it’s the consumers fault for not spending enough, if the consumers are poor it’s their fault for spending too much.
Like a syphilitic prostitute giving a happily married person advice on a healthy sex life.
This happens on a regular basis in my and neighboring neighborhoods - while servicing the people or their partners she advises. I’m not kidding.
Bad economics using loanable funds nonsense. It comes from the
Savings - Investment = Current Account Balance
Identity. The savings in this case isn’t household savings. Current account includes trade btw.
It is in fact the rest of the world’s willingness to accept Chinese imports (treatlerites for instance), and China’s willingness to accept certain currencies and financial assets that results in the trade surplus.
I think there is a legitimate argument to be had whether the world deserves Chinese labor and resources embodied in the goods they export considering continuous trade deficits in own currency (eg USD) is closer to aid than trade. But it has nothing to do with household savings.
Why can’t you be like India, China? 😔
The Economist is such a wonderful advisor for every Global South country. You just never ever do what they advise.
As long as the imperial core has its “hard currencies”, how can world trade imbalances be resolved? As long as a trader can obtain profit by taking goods from a “cheap country” (one with lots of goods but little hard currency) and sell in a “expensive country” (less goods more hard currency), export-import imbalances will remain incentivised.
