Economy crisis: the United States asks China for help

70% of China’s savings are available in U.S. Treasury bonds and dollars – the crisis currency, which at the first germ of stability has a chance to fall, rather deep, given how fast it is printed. If the Chinese decide that the time has come to sell, inevitable tectonic shifts will happen in the world economy.

The Minister of Finance of the United States arrived in China. Economies of the two countries are so tightly linked to each other that any wrong movement can lead to the collapse. Head of Finance of the U.S. came to persuade Chinese colleagues not to do sudden movements.

“A successful transition to a more balanced world economy will require significant advances in the world. But the most important changes must occur in China and the United States. The welfare of the rest of the world will depend on our success. And the effectiveness of U.S. policy in part will depend on China,” – said Gaytner.


But the questions of the effectiveness of this policy make China nervous. All the recent years, the country has bought U.S. treasury bonds – sort of IOU of America. They have always been considered very reliable: after all American economy is backing them. As a result, almost 70% of China’s reserves are located in dollar-denominated assets; their reliability is under big questions now.

And if China suddenly decides to start getting rid of dollar reserves, it is clear that it will be followed by a collapse, which will affect both the United States and China. Because of that the tone of statements is similar to that of ultimatum. “It is in the interest of China that the U.S. economy once again begins to show growth. We will rise or fall together. We are in the same boat, and it is good that we paddle in one direction,” – U.S. Secretary of State declares Hillary Clinton.

But the concern of China in recent years is only growing. The United States are trying to solve all the problems solely by printing new dollars and releasing more and more debt bonds. The last example is the bankruptcy of General Motors. At first glance everything seems to be done by the rules of the market economy: debt restructuring, sale of assets, if it was not for one significant “but” – this is again done with the money of the government. And it is not taken from taxpayers, but is simply done by re-printing and producing U.S. IOU.


A special board in New York shows the astronomical amounts of debt – the United States owes globally more than 11 trillion dollars – to 94 thousand dollars per household. To rescue its economy the United States is going to issue debt receipts for another 3 trillion dollars this year. However, the more they are produced, the more doubts are heard about their reliability. So suddenly oil prices got higher once again – almost of pre-crisis rates; and stock markets are also rising.

This means that it is very difficult to build long-term projections, including budget and schedule of entire countries. Over the past 3 months almost all of the world indices have increased – the Russian stock exchange has risen by 80%, German – by 40%, and the Chinese – by 25%. But one can not exactly say whether that means improvements in the real economy or not.

Economy crisis: the United States asks China for help