06/27/2009

China’s Independence Fantasy

China is not happy. That's the title of the bestselling book in China. The five nationalist authors say it is time for China to "split from the West," particularly the United States and the Treasury bonds that Beijing holds to the tune of $1 trillion. This desire for greater distance from America is growing: in a May poll conducted by China's Global Times, 87 percent said they were against buying more U.S. debt. Shortly before U.S. Treasury Secretary Timothy Geithner arrived in Beijing in early June, a survey of leading Chinese economists showed that 17 of 23 think U.S. bonds are "risky," that U.S. stocks pose a potential threat to the Chinese economy, and that the Chinese government should diversify its assets away from U.S. markets and toward energy and mineral resources. When Geithner assured a group at Beijing University that American bonds are a "safe" investment, they erupted in loud laughter—a rare outbreak of rudeness from an elite crowd in China.
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