Wednesday, April 6, 2016 12:13 pm
U.S. experts find it is too overflown and narcissistic when Republican Party front-runner for presidential candidate Donald Trump recently claimed that the United States has rebuilt China.
“You know, we’ ve rebuilt China,” Trump said in an interview with the New York Times. “The money they’ ve drained out of the United States has rebuilt China. And they’ve done it through monetary manipulation, by devaluations. ”
However, economists disagree over the extent of the United States’ impact on the Chinese economy and said that Trump’s claim ignores many other factors at play. Experts emphasize that China’s opening up and reform policy has contributed much to its rapid economic growth.
“Trade with all countries, including the United States, has been part of a major market reform that’s lifted millions out of poverty in China. Reforms to property and taxation have been much more fundamental,” said Scott Lincicome, a scholar at the libertarian Cato Institute who specializes in international trade politics.
“I would not say that American deficits rebuilt China, but they probably allowed China to rebuild itself at a much lower domestic political cost than otherwise,” said Michael Pettis, an expert on the Chinese economy at the Carnegie Endowment for International Peace and professor at Peking University.
“Our consumption has benefitted the Chinese people, just like how the consumption of Europe and everyone has,” said Lincicome. “American demand has helped Chinese companies, so there’s a nugget of truth to that, but we’re not the only ones.”
“By Trump’s logic, you could argue that China has also rebuilt America by providing America with cheaper goods and thus more savings, ” pointed out Zhiwu Chen, a Yale University economics and finance professor who specializes in the Chinese economy.
Without those savings or Chinese financing of American government debt and corporate investments, the United States would not have been able to sustain the kind of growth in real estate, defense and business for so many years, Chen said. “In an interlinked globalized world, it is really hard to say who is rebuilding whom.”