NationStates Jolt Archive

http://www.theatlantic.com/doc/200812/fallows-chinese-banker


Gao Xiqing president of the China Investment Corporation. He is not some america hating ignorant dick, he is actually a very intelligent person who makes some valid points. If you haven't read I suggest you do, he knows his stuff.

Being nice to people you owe money to seems like the best path to not getting your legs broken.




Well, that and making your payments on time.

Being nice to people you owe money to seems like the best path to not getting your legs broken.




Well, that and making your payments on time.


Read the article, he goes in a bit deeper than that. The title may indicate one thing but the article goes a bit beyond that. I just named it that because thats the articles name.

Read the article, he goes in a bit deeper than that. The title may indicate one thing but the article goes a bit beyond that. I just named it that because thats the articles name.

"When you owe the bank $1000, you have a problem. When you owe the bank 10,000,000,000, the bank has a problem."

In a nutshell, his description of the attitude of Americans as a whole towards the immense debt it has.

So i've read it. now what?

So i've read it. now what?

I dunno. He's a fairly smart fellow, and his points are very good. But it seems like I've heard this before, just with different wordings and metaphors...

China needs to realise that they've baisicly 'given' the US their money. America will never pay back the 10.2 trillion dollars they owe the world.

I dunno. He's a fairly smart fellow, and his points are very good. But it seems like I've heard this before, just with different wordings and metaphors...

He certainly comes across as smart, and many of the things he's talking about are important. But most of these things are pretty standard ideas really, be nice to people you owe money too isn't a new idea.
I'm wondering what the OP want's me to say about it?

if hes so smart why is he an investment banker in the employ of China and why does he keep buying shitty companies?

if hes so smart why is he an investment banker in the employ of China and why does he keep buying shitty companies?

No Call to power he is Batman, he will save the world with Flash Gordon at his side they will ride the lightning.

No Call to power he is Batman, he will save the world with Flash Gordon at his side they will ride the lightning.

No, he's the guy that batman is going to capture and return to Gotham city. He's really good with numbers.

So i've read it. now what?


You could try to give your thoughts on what he said and the issues he is talking about....Just a thought really.

You could try to give your thoughts on what he said and the issues he is talking about....Just a thought really.

Goddamn your god, fine i'll look at it again and in a few minutes i'll come up with a serious post, you're lucky i'm having trouble sleeping.

No Call to power he is Batman, he will save the world with Flash Gordon at his side they will ride the lightning.

well then what was Morgan Freeman thinking when he brought Rover?

No, he's the guy that batman is going to capture and return to Gotham city.

pfft he'll never talk!

US to China: Be nice to the countries that support your entire economy by purchasing your products.

(small niggle, if this was written December 2008 why is he not sure who the next president will be?)

We—the Chinese, the Middle Easterners, the Japanese—we can see this too. Okay, we’d love to support you guys—if it’s sustainable. But if it’s not, why should we be doing this? After we are gone, you cannot just go to the moon to get more money. So, forget it. Let’s change the way of living. [By which he meant: less debt, lower rewards for financial wizardry, more attention to the “real economy,” etc.]
What does he mean here?
Does he mean we should change our lifestyles somehow? even though most people won't do this unless they are forced at gunpoint?


When I told the State Council about the mirrors, they all started laughing. “How can you sell a mirror image! Won’t there be distortion?” But this is what happened with the American economy, and it will be a long and painful process to come down.

I think we should do an overhaul and say, “Let’s get rid of 90 percent of the derivatives.” Of course, that’s going to be very unpopular, because many people will lose jobs.
Um i don't know much about the stock markets but is he actually suggesting we get rid of them?
and his hypothesis of how the American economy came down is debatable, it was because of the sub prime mortages that the whole thing mushroomed into a big mess-up.

I have to say it: you have to do something about pay in the financial system. People in this field have way too much money. And this is not right.

When I graduated from Duke [in 1986], as a first-year lawyer, I got $60,000. I thought it was astronomical! I was making somewhere a bit more than $80,000 when I came back to China in 1988. And that first month’s salary I got in China, on a little slip of paper, was 59 yuan. A few dollars! With a few yuan deducted for my rent and my water bill. I laughed when I saw it: 59 yuan!

The thing is, we are working as hard as, if not harder than, those people. And we’re not stupid. Today those people fresh out of law school would get $130,000, or $150,000. It doesn’t sound right.

Individually, everyone needs to be compensated. But collectively, this directs the resources of the country. It distorts the talents of the country. The best and brightest minds go to lawyering, go to M.B.A.s. And that affects our country, too! Many of the brightest youngsters come to me and say, “Okay, I want to go to the U.S. and get into business school, or law school.” I say, “Why? Why not science and engineering?” They say, “Look at some of my primary-school classmates. Their IQ is half of mine, but they’re in finance and now they’re making all this money.” So you have all these clever people going into financial engineering, where they come up with all these complicated products to sell to people.

Fair enough i take his point $60,000 from a first year is a stupid amount.
But he makes a mistake because he compares China to USA in 1988, this is 20 years later that comparison will not hold water now.
Alot of America's wealth is from the oil it has and from the large arms deals it makes with other countries (and of course trade with other countries).
Again China still has huge problems, as does the USA. Although the US may attract people for now within law, many people don't or can't live there for long. (remember the US is a very very unpopular country)

And he's assuming that money is more important than the people you know. you can't judge someone by their paycheck in different countries. I mean where are his figures or comparisons of statistics, even comparisons of GDP?

Finally, after months and months of struggling with your own ideology, with your own pride, your self-right-eousness … finally [the U.S. applied] one of the great gifts of Americans, which is that you’re pragmatic. Now our people are joking that we look at the U.S. and see “socialism with American characteristics.” [The Chinese term for its mainly capitalist market-opening of the last 30 years is “socialism with Chinese characteristics.”]
Now that's what i call beating someone when they're down.
Perhaps an indication of the poor relations between China and the US.
You can't apply an ideology to a whole country especially one as diverse as the US or China i'm sorry but it doesn't work at all. This person is basically laughing at another's misfortune.

The problem with dealing with economics or even finance i find is it's not possible to predict how things will turn out 100% ever.

Then he talks about getting rid of ideological differences but in doing so he makes them worse.

The part before this sort of makes sense
Talk to the Chinese! Talk to the Middle Easterners! And pull your troops back! Take the troops back, demobilize many of the troops, so that you can save some money rather than spending $2 billion every day on them. And then tell your people that you need to save, and come out with a long-term, sustainable financial policy.
again no qualms with talking, always a good idea.
and once the US pulls it's troops back, chaos would ensue in many of the countries they had once inhabited. for example Iraq, if they packed their bags right now the country would tear itself to pieces.
agreed they should withdraw their troops from these places but, if they did things would only get worse in many areas sadly.
However didn't i hear that the Chinese spend a huge amount of their annual budget on their military?

The next part and most of it he talks as though the US is one large organised whole, in reality the whole people have many different ideas and things they want to happen. they are not all hard-working people, although many of them may be. Some states are more wealthy than others, some have worse immigration problems than others. The US is not unified in any respect.

Overall an interesting article, unfortunately my knowledge of the stock markets or the US economy is very limited i have tried to make my observations where i can.
To sum up i'd say that the US is very divided in opinion on almost any matter, so this author is not justified in identifying the ideology of the country. He doesn't really explain why problems are occuring, or go to any great length to justify his opinions.
Still interesting read nonetheless.
hope what i have said makes sense to whoever reads this.

I don't think he's quite right about derivatives. Or rather, the article's way of restating his description isn't. If you open the book (and you have a special mirror), so that someone can read it from the mirror image, it makes a lot more sense. Derivatives aren't worthless, they actually have some real cash flow underlying them, actual money changing actual hands. As such they have a purpose, just as a book read through a mirror has. And if you read the book through five mirrors (or a google server...), and you're happy to have done that rather than owning the physical book, then nothing went wrong.

Until the chain breaks and the book is removed from the first mirror, as he rightly pointed out. That doesn't mean that derivatives are bad though. People just need to understand what they are when they buy them.

"When you owe the bank $1000, you have a problem. When you owe the bank 10,000,000,000, the bank has a problem."

In a nutshell, his description of the attitude of Americans as a whole towards the immense debt it has.

Though when you owe the bank 10,000,000,000 and the bank has the world's largest military force, you have a problem.

It's vice versa, though, it's that you (US) owe the bank 10,000,000,000, *and* you have a military force stronger than the rest of the world combined.

It's vice versa, though, it's that you (US) owe the bank 10,000,000,000, *and* you have a military force stronger than the rest of the world combined.


I am referring to the US as having the debt - isn't that obvious, after all the PLA is the world's largest military force.

China needs to realise that they've baisicly 'given' the US their money. America will never pay back the 10.2 trillion dollars they owe the world.

If you don't pay back the money, shit happens. Weimar Germany basically got its knee caps broke when it couldn't pay reparations and the French and Belgians invaded the powerhouse of the Saar and Ruhr.


I imagine something like Asia getting economic power, and world dominance, and Western countries changing to protectionist economies, myself. If the governments last.:wink:

US to China: Be nice to the countries that support your entire economy by purchasing your products.

We buy their crappy trinkets and they buy our debt. Since both of those items were worthless in the first place I think its a fair trade. Who's the suckers here?

We buy their crappy trinkets and they buy our debt. Since both of those items were worthless in the first place I think its a fair trade. Who's the suckers here?

I imagine the fiscally responsible people and quality manufacturers in both countries? The same ones that allow the crappy trinkets and boatloads of debt to exist in the first place...

*clears throat*

We paid for your bailout! We paid for your bailout! What a waste of council tax, we paid for your bailout!

It's vice versa, though, it's that you (US) owe the bank 10,000,000,000, *and* you have a military force stronger than the rest of the world combined.

More expensive, I don't know about stronger. Good luck funding it if they call in our debt, too. I doubt they'll give us any loans to pay for that one.

Its been an while since I've had an honor economics class but last I checked the vast overwelming amount of the US Debt was to the American Public, through taxes and government bonds, not to foriegn powers. That doesn't include the countless trillions owed to the US by other countries of which only Japan and one and two other countries have payed back and likely never will.

(small niggle, if this was written December 2008 why is he not sure who the next president will be?)

What does he mean here?
Does he mean we should change our lifestyles somehow? even though most people won't do this unless they are forced at gunpoint?
he was likely suggesting we raise or intrest ratesso people stop borrowing so much money to buy useless junk. also less deficit spending from the government.



Um i don't know much about the stock markets but is he actually suggesting we get rid of them?
and his hypothesis of how the American economy came down is debatable, it was because of the sub prime mortages that the whole thing mushroomed into a big mess-up.

the issue i have always have with the stock markets they were never intended for the volumes they process. 150 + years ago stock values were tied to dividends. now half the companies dont even issue them you have to sell the stock to make money.
the stock market was not meant to be flooded with middle class money, every retirement account on earth and anything else poeple throw in the market.

US to China: Be nice to the countries that support your entire economy by purchasing your products.

Indeed. They need us as much, if not more, as we need them. Considering the fragile state of the Chinese economy I would call this man particularily smart or insightful.

The two economies are so intertwined that it's almost become one economy.

The difference is that China is fueled by savings, America isn't.

I suspect the balance has tipped, that American is slightly more dependent on China than the other way around, or it's at least in the balance, and that's why they've felt bold enough to make this statement.

American investment in China was direct, building factories and such, no capital flight options such as they had in '97.

Certainly China grew on American consumerism, but don't expect them to be grateful when they gain the upper hand.