Why is China More Dependent on the USA and the Dollar than the USA Is on China?
I wanted to ask this question after reading a section of the 2015 Special report titled A Longer March. The subject of this section was China and its dependence on the dollar coupled with its “inefficient” economic model. The inefficiency was exemplified by the economic crisis that China was undergoing in 2015 and the devaluation of the Chinese Yuan (“The Sticky Superpower”).
I was always curious why it was considered that the country with money to buy products was considered more powerful and important than the country that makes products for the entire world. As it stands, China produces everything. If I were to venture to Walmart and start reading the labels, I am confident that almost everything besides food products would be labeled “Made in China.” As it stands, China has the strongest and largest financial sector in the world. At the same time, a good portion of the US debt belongs to China.
The article spoke of China as a “wannabe superpower,” which has the potential for being one but is not one yet. However, should China be stricken by any crisis serious enough to stop it from producing our cars, iPhones, shirts, and plastic bags, the entire world would suddenly find itself without its greatest industrial giant, which would be just as catastrophic, if not more catastrophic than the Wall Street Crisis of 2009. This made me question the idea that the USA is an undisputed hegemon of the global economy.
Works Cited
“The Sticky Superpower.”The Economist. 2015, Web.