It's not tax money though. The trade surplus has to stay abroad to stop rapid appreciation of the RMB. So if you can't invest it productively abroad and you can't bring it home, you might as well spend it. That's pretty much what's happening with Pakistan, except that Pakistan is too much of a failed state right now to use the investment.
Renminbi (RMB)/Yuan Appreciation & Internationalization
- Thread starter supercat
- Start date
The excess profits should be dumped into Moon and Mars colonization programs instead of loaned or squandered. Moon and Mars should become Chinese properties with their own mining industries and R&D operations. Just as Anglos became dominant for a century due to being first to an industrial revolution, and Anglo-Americans became the dominant power for a century due to being first to successfully dominate and utilize North American natural resources, China's future hinges upon the future equivalents of those as well.
In4ser
Junior Member
Perhaps the demographics crisis is a blessing in disguise for China and the World. More room to grow for everyone and less incentive for China expand as an older population will be more focused on getting its house in order. Being too successful and absorbing all the wealth and opportunities will naturally create resentment and rally the rest of the world against China once the West is defeated.
Maybe once the Eurasian Reformation of Western Orthodoxy for the Global Community is established, it would be time for China shift governing styles and withdraw to refocus on societal and cultural things like birthrates and collective identity. A Qin-like CCP was necessary to keep the country united and fend off foreign threat but to a more Han-like government would be better in a post Pax Americana. Without the foreign threat of Western Imperialism, China could adapt to being more humanist and family focused moving from a Legalistic to a more Confucian philosophy.
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In4ser
Junior Member
I wonder why they aren’t using it to pay down government debt as China exceeds Korea and Russia in debt to GDP ratios.
Trade for a mix of domestic currency swaps, 3rd party currency of a large trusted intermediary (i.e. Zimbabwe and Congo using RMB as settlement currency) and gold.
How can government debt in RMB be paid down with foreign exchange?
In4ser
Junior Member
Dunno that’s why I’m asking. Is there a lack of RMBs to exchange back into local currency? Or is it something else?
I don't think there can be a lack of RMBs except voluntarily, as RMBs are created locally.
In4ser
Junior Member
Yes perhaps they’re afraid of inflation but since they’re trying to internationalize the RMB, it doesn’t make sense as they’re trying to create more supply.
Therefore, back to the original question, why is China not paying down its debt in RMB with foreign exchange? You seem to know something I don’t. Please explain, I’m willing to learn.
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This is less about excess profit than useless currency you get. Hard to colonize Mars with Zimbabwe dollar. There are endless amount of things to develop with own money, but useless foreign money remain useless.
I am convinced in the future a mix of global governance and soft imperialism is needed because the alternative is historical isolationism. If it means to die a slow death of bliss then I rather China go down the path of pain to bring the world together. There will be trade friendly states and unfriendly states. Perhaps China could invest in the friendly states with some losses to gain geopolitical advantage to rid of unfriendly states. If say country X refuse to offer anything valuable to trade and only create local conflict, China can build up country around it and pressure the hostile nation. First diplomacy and trade, ultimately by hard power if necessary. China could also accept nations into unions like Mongolia in exchange for greater investment. Ultimately China can bring humans all toward a common goal. Common prosperity for the world.
All African countries have significant quantities of important natural resources for industry. Paying for those in their own currencies is not a problem. Likewise with buying agriculturally useful land abroad.