“China is a poor country with only $4,000 per capita income,” Yu Yongding, a Chinese top economist and former member of the central bank’s monetary policy committee said in an interview in China. “To talk and think about China to rescue countries with $40,000 per capita incomes is ridiculous.”
China is ready to help, Mr. Yu said, “but European countries first should show that they have a clear road map and convincing policies to preserve the euro and solve their problems as well as the political will to make necessary sacrifices.”
via Europe Is Urged to Take Bolder Action on Debt – NYTimes.com.
Neatly failing to acknowledge that at least part of the global crisis is caused by Asian (and in particular Chinese) saving habits. Which leaves Western governments overly reliant on borrowed deficits to make things balanced…
……Also neatly avoiding why a developing country with GDP of only $4000 per capita would be holding an investment of $1.3 trillion in US Treasurys.
Right.. I guess we should all (borrow and spend to) consume frivolously like Americans. That’s a good long-term strategy..
*rolls eyes slightly* – I’m not suggesting that, however saving is damaging to a capitalist economy which only works properly when money remains in circulation, Western debt is a direct reflection of Asian saving mainly because the system is broken, wealth doesn’t come out of nowhere, someone has to spend money for someone else to make some. When you start taking trillions out of circulation, you reduce the ability for people to make money directly…
Per capita income is not a good metric to compare since $4000 per capita times 1.3 billion population of China makes it $5.2 trillion income for the country.. and that is huge comparatively ..
Population of 1.3 billion makes it a big number, but how many others making $4000 a year are buying Treasurys or considering a portfolio of blue chip stocks?