China and India moving right along

Published on March 3, 2010   ·   2 Comments

I think, overall, the Chinese and Indian economies are probably going to be the economies that will grow over the next few years.

The Chinese have invested heavily into infrastructure and thus have a consumer with money to spend and grow the economy with internal consumption versus relying on exports (and our US feeding frenzy that went into a tailspin). They have expanded their capital markets (essentially credit to finance infrastructure). That is their exposure.

The Indians on the other hand have been steadily growing their internal consumption and have not really extended their credit as much as the Chinese economy. So, it is probably less vulnerable but a slower ramp up.

All the same, it seems that the IMF (and thru the Worldbank) gives aid to both economies. Which is quite strange. Obviously, the IMF gets their money from the US and EU. That money obviously is a lever by which is some form of political control is done. Anyhow, the Chinese also give aid to other developing countries that gives them political control. So, it seems economic control drives political control and the world chugs along. One can say that I see first hand the power of geo-political control thru economic control. The ultimate impact is sociological, sometimes good and sometimes not-good. Previously, I only studied such things from a remote point of view. Now, I live in it.

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