China Trade Surplus Time Bomb

Scott Rossenberg points to a very interesting article in The Antlantic.  In a nutshell China has a huge trade surplus undistributed to its people. A lot of it sits in US, UK and Australian government bonds. China is very sensible doing this for their economy in order to prevent inflation. It is an onerous balancing game not unlike controlling the flow of money to your children. Too much and kids don’t value it highly. Too little and they feel deprived relative to their friends. It’s a tough job being a parent, imagine doing that for billions of people.