Stephan: Austerity economics, as Nobel economists like Paul Krugman and Joseph Stiglitz, keep telling us on the basis of data clearly strip wealth from the middle class and poor transferring it to those who are richest. While we have been doing that China has been doing some quite different. They have created historically unique wealth. This report gives a good assessment of the situation, and something of its implications.
The other day, talking with a real estate broker friend, I asked what was happening in the market she knew. Her response was, "The Chinese are coming." Real estate, she said was going up faster than would normally be expected because of Asian buyers in the market. Vancouver, BC was transformed by this process, which began when Hong Kong was transferred from Britain to China.
Although this story is usually told from the economic perspective, there are also major implications for the Emerging White Minority Trend, that is such a powerful social force in the world today.
The Chinese Yuan
Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.
With China’s leadership aiming to scale back the role of investment in the domestic economy, the nation’s surfeit of savings — deposits currently stand at $21 trillion — will increasingly need to be deployed overseas. That’s also becoming easier, as Premier Li Keqiang relaxes capital-flow regulations.
The consequences ultimately could rival the transformation wrought by the Communist nation’s fusion with the global trading system, capped by its 2001 World Trade Organization entry. That stage saw goods made cheaper across the world, boosting the purchasing power of low-income families at the cost of hollowed-out industries.
Some changes are easy to envision: watch out for Mao Zedong’s visage on banknotes as the yuan makes its way into more corners of the globe. China’s giant banks will increasingly dot New York, London and Tokyo skylines, joining U.S., European and Japanese names. […]
