The recent weeks' tense moments over an American default passed India by. This only shows how little India counts as a globalized economy, how shallow are our self-conceptions as an "emerging power" whose views are listened to with rapt attention in the G-20.
The government didn't bother to waste its breath on the US default when almost all major players (China, Russia) were beside themselves with excitement - and most minor players, too — be it a trading nation like Turkey or the Persian Gulf oil exporters who trade in dollars.
What caught the attention was of course China's reaction. It kept its thoughts to itself until it was fairly certain that the coast was clear and its dollar reserves are remaining intact. Now, flood-gates are opened. Discussions are galore. Of course, they are exhilarating and they throw much light on the intellectual climate in China. The government newspaper China Daily featured an analysis by an American specialist. Main points: A) China's voice doesn't count in the US policy-making, as US is an 'incredibly insular country' that ultimately knows and would decide on the basis of what is good for itself. B) China's opinions are either ignored or will be resented. C) The mood in the US is 'anti-China' and, defaulting on China debt might even enjoy 'considerable popularity'. D) If the US hasn't done that, it is because first, the budget deficit is primarily due to US healthcare system and not really a matter of excessive spending or tax-cutting, and, secondly, US' borrowings from China stem from its trade deficit rather than budget deficit. "The trade deficit is what gives China the dollars to buy US assets of all types, including US government bonds."
So, what is the moral for China's 'policymakers'? Put simply, 'Don't think you are such big shots as to fancy you wield any clout over the US's economic policy making'. Hello, ever heard of 'Chinamerica'?
Chinamerica goes on vacation - Indian Punchline
The government didn't bother to waste its breath on the US default when almost all major players (China, Russia) were beside themselves with excitement - and most minor players, too — be it a trading nation like Turkey or the Persian Gulf oil exporters who trade in dollars.
What caught the attention was of course China's reaction. It kept its thoughts to itself until it was fairly certain that the coast was clear and its dollar reserves are remaining intact. Now, flood-gates are opened. Discussions are galore. Of course, they are exhilarating and they throw much light on the intellectual climate in China. The government newspaper China Daily featured an analysis by an American specialist. Main points: A) China's voice doesn't count in the US policy-making, as US is an 'incredibly insular country' that ultimately knows and would decide on the basis of what is good for itself. B) China's opinions are either ignored or will be resented. C) The mood in the US is 'anti-China' and, defaulting on China debt might even enjoy 'considerable popularity'. D) If the US hasn't done that, it is because first, the budget deficit is primarily due to US healthcare system and not really a matter of excessive spending or tax-cutting, and, secondly, US' borrowings from China stem from its trade deficit rather than budget deficit. "The trade deficit is what gives China the dollars to buy US assets of all types, including US government bonds."
So, what is the moral for China's 'policymakers'? Put simply, 'Don't think you are such big shots as to fancy you wield any clout over the US's economic policy making'. Hello, ever heard of 'Chinamerica'?
Chinamerica goes on vacation - Indian Punchline
