From: ronkean@juno.com
Date: Fri Dec 24 1999 - 09:13:48 MST
On Fri, 24 Dec 1999 07:56:35 EST GBurch1@aol.com writes:
> In a message dated 12/23/99 11:58:43 PM Central Standard Time,
> ronkean@juno.com writes:
> > > If China's trade balance has been consistently positive for 250
> years,> > where is the money, or what happened to the money
representing
> the> > cumulative trade imbalance?
>
> I suppose I was engaging in a little hyperbole when I wrote that
> except for > the 19th century opium trade, China had had a positive
trade balance > since > "modern" contact with the West in the mid-18th
century. For long > periods > during the modern era, there has been very
LITTLE trade, given
> China's > enormous population. During much of this time, China has
been
> wracked with > civil wars, then invasion and pillage by the Japanese,
then a
> mercantilist > communist regime, then 20 years of total economic
stagnation arising > from the > "Cultural Revolution".
>
> But over the long, long course of its history, China has been a net
> exporter. > Evidence of the society's accumulated wealth over that
period can
> be seen in > the massive public works that made China "work" as an
> agricultural-engineering system (e.g. the great hydrological works
> of > central, western and south china) and the creation of the
elaborate
> cultural > edifice that is the Glass Bead Game of Confucianism.
>
> Greg Burch
If, over the long course of history, China has been a net exporter, that
would mean that China has sent out goods and taken in money, on net,
assuming that China's net international capital flow has been roughly
zero. So, money would have accumulated in China over that time. And yet
we see no evidence of there having been a great surplus of money in China
at any given point in its history, even now. China's reserves today, not
counting those of the Hong Kong Monetary Authority, are only about $100
per capita, and only now is China beginning to invest outside the
country, as for example the port facilities in California and Panama.
China's accumulated wealth in the form of public works projects would not
account for the trade surplus being spent out of China, since the works
projects are an internal activity; the public works are not imported.
Perhaps the trade surplus was taken out many years ago by the overseas
Chinese, before the Japanese invasion, and invested in Singapore, the
East Indies, and other places where the overseas Chinese established
themselves, and therefore did not appear in China's reserve account.
Ron Kean
.
.
.
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