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This post was edited by abramicus at 2013-4-18 13:56|
WHINY Jonus, YOUR economics of consumption as the driver of production is what makes no sense at all. Wealth comes from surplus, not from deficits. The only reason the US can prosper while running a deficit is because other countries depend on its currency to buy and sell to one another. As the producer of the medium of exchange, of course, the US can prosper without having to produce anything, because it can always exchange its currency for anything that the rest of the world trades. Using the US as an example shows your insincerity or rather, your stupidity.
China does not need stupid economists running its economy to the ground. China rose up based on productivity, not consumption. If other countries will not buy what China produces in excess, which is impossible if their markets are free, because by sheer volume, these exports should be cheaper than what they could produce themselves, then China should allocate its excess labor toward longer term production goals, such as producing more basic scientists, more writers, more artists, who can enrich the experience of life of its people without having to depend on the intellectual products of other countries, and on the artistic talents of other peoples. Yes, surplus without exporting it still enriches China. But deficit, even without importing anything poors every Chinese, materially and intellectually.
Production should always lead consumption in any society, except the very few which can simply produce money, rather than earn it.
Furthermore, China has every right to set the exchange rate it pleases for its currency. It is a free market. If the world disagrees, it can refuse to buy Chinese currency on the cheap, and end up buying Chinese goods on the dear. China does not need exports to prosper. But China needs growth and production to prosper. This distinction is important if China's standard of living is to continue to rise, and its GDP continue to grow. Production must always lead consumption.
If China cannot produce goods and services that other countries will consume, then produce scientists, artists, philosophers instead. Producing top quality people is the highest form of production any society can attain. When you produce basic scientists, you make China smarter by leaps and bounds.
THIS IS CALLED HUMAN CAPITAL, THE ULTIMATE FORM OF CAPITAL THAT CHINA CAN AND SHOULD PRODUCE BY THE MILLIONS, WITH ITS SURPLUS MANPOWER AS BASIS.