Recently, the US government passed a $1.9 trillion economic stimulus bill. For a while, opinions were varied. How will this huge amount of money affect the world economy? How should China avoid being swallowed by international financial capital such as the United States?
The United States and other international financial capital pull the wool of developing countries
America the capital stimulus plan will bring the recovery of the world economy in the short term, but in terms of long-term effects, the United States this practice will not only for their own dollar devaluation, also brings devaluation of the renminbi, the influence of the domestic liquidity will flow to the financial markets in other emerging countries, will further promote the financial asset bubbles in these countries, the substantial depreciation of the dollar. The depreciation of the US dollar may lead to the rise of global inflation and the resurgence of some resource products, which may lead to the phenomenon of “imported inflation” in China, that is, the rise in the prices of foreign products and then the rise in domestic prices.
Led by the United States, the international financial monopoly capital is to use the large-scale transfer of funds to speculate on the financial assets of emerging market countries, and then when the financial market defects of these countries are exposed, sell these assets ahead of time to seek huge windfall profits — this is actually the main path of international financial capital while pulling the wool of developing countries.
After the US released the water, China’s foreign exchange reserves in dollar terms shrank, and the value of the US Treasury bonds that China bought was devalued! American society will be flooded with cheap loans, which will divert some of the water. As a result, liquidity spreads around the world, via Wall Street and the dollar’s nature as a global currency. This has been the case in previous economic crises.
China needs to rein in financial risks
As a leader of emerging countries, China’s economic development is also in a critical period of structural adjustment. China’s domestic stock and bond markets have welcomed a positive outlook.
The impact of a weaker dollar and rising commodity prices is having an adverse impact on China’s economy.
The Chinese government explicitly gave up the theory of monetizing fiscal deficit, controlled the fiscal deficit at a reasonable level, and avoided squeezing the money supply. We can also take advantage of the relative surplus of global capital to speed up the “One Belt And One Road” initiative and facilitate Chinese enterprises to grow bigger and stronger overseas.
The Chinese people will make concerted efforts to control the financial crisis and vigorously support the development of the foreign trade real economy under the “One Belt And One Road” policy. I believe China will be able to ride out this economic wave.
Post time: 16-04-21