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The danger of default
HOME > PAST ISSUE > PERSPECTIVE [Premium content]February 2008
A trade surplus system skewed toward US dollar-denominated assets may leave Western nations unable to pay back Asia’s loans
China’s trade surplus is now so big that one must begin to ask: Can the global system stand it for long?
Of course, the issue is not just China’s surplus but the combined surpluses of East Asian economies plus the major oil exporters. Add all those together and you have a total of around US$750 billion annually in wealth transfer. Because of the way the system operates, this is in effect a transfer from the major developed economies, principally the US but with secondary ...
Of course, the issue is not just China’s surplus but the combined surpluses of East Asian economies plus the major oil exporters. Add all those together and you have a total of around US$750 billion annually in wealth transfer. Because of the way the system operates, this is in effect a transfer from the major developed economies, principally the US but with secondary ...
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