In a column bearing the stentorian head “With an absent United States, China marches on”, a mildly hyperventilating Fareed Zakaria warns us that those clever Chinese folks are trying to win friends and influence people with “an avalanche of cash.” Fareed says that, according to David Shambaugh “if you add up China’s promised investments in all of these regional ventures [in Asia over the next 10 years], the total is $1.41 trillion. The Marshall Plan, by comparison, cost $103 billion in today’s dollars.”
Well, if promised investments were horses, beggars could ride. Also, the Marshall Plan consisted of actual gifts (with, naturally, actual strings attached), rather than investments. And it was handed out over a 4-year period rather than 10. Also, U.S. Gross Domestic Product was around $1 trillion in adjusted dollars back in 1948 when the Marshall Plan started, as opposed to China’s current $10 trillion, which will presumably grow substantially over the next 10 years. See what happens when you think before you cut and paste, Fareed? Happy 4th!
UPDATE
Perhaps Fareed’s column should have been headed “China Marches Forward As Stock Market Collapses". According to a story in today’s New York Times, “China’s Market Rout Is a Double Threat”,
“For nearly three years, President Xi Jinping of Chinahas crushed opposition by silencing and often locking up anyone who dares defy the government. But that aura of invincibility has been shaken by stock market speculators who have made a mockery of efforts to halt a steep slide in share prices.
“The losses — Chinese shares have shed more than a quarter of their value in three weeks — pose an added risk, and possibly greater danger, to a global economy grappling with Greece’s difficulties in repaying foreign loans and its possible exit from the euro. About $2.7 trillion in value has evaporated since the Chinese stock market peaked on June 12. That is six times Greece’s entire foreign debt, or 11 years of Greece’s economic output.”
Kind of makes you wonder where that $1.4 trillion in “promised investments” will be coming from, doesn’t it? And with Europe looking just a bit shaky as well, maybe old Uncle Sam’s prospects aren’t too shabby after all!
