When rumors say that China is going to sell Euros or cash in on US Treasurys, stock markets tend to panic. Then China denies the rumors as they did recently. “Europe has been and will be one of the major markets for investing China’s exchange reserves,” China’s State Administration of Foreign Exchange says. Source: 24/7 Wall St
It would not serve China’s interests to hurt Europe or America’s economies since China exports more than 200 billion Euros worth of mainly industrial good to Europe, which means jobs in China. Europe also exports more than 80 billion Euros in goods to China, which translated into European jobs.
Overall, China imported $922 billion dollars worth of products from the rest of the world last year while exports declined to an estimated 1.19 trillion.
Although exports to the U.S. fell in 2009 by 12.2% to 296.4 billion, China’s imports only went down to 69.6 from 69.7 billion dollars from the prior year so America improved its trade deficit with the PRC by 15.4% in 2009. This means jobs were lost in China but not as many jobs were lost in America from what America sells and exports to China. Source: China Trade Statistics 2009
See Jobless in America and Angry at China
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Lloyd Lofthouse is the author of the award winning novels My Splendid Concubine and Our Hart. He also Blogs at The Soulful Veteran and Crazy Normal.
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