Is China’s economic growth good or bad?
Since the late 1800s, the United States has been the most dominant economic power in the world. However, that is soon to end. A recent study released by the World Bank indicated that China is now the largest economy in the world as far as purchasing power goes.
A report by the World Bank shows rapidly expanding China is poised to overtake the United States as the world’s largest economy by the end of 2014. The report looked at exchange rates to reveal the purchasing power of different currencies and found that the yuan in China will soon pack more punch than the mighty dollar. This, of course, with the help of our president who signed into law H.R. 2847, which took effect just a few weeks ago on July 1.
The U.S. dollar is what’s known as the world’s reserve currency. When this law takes effect, many countries will think about moving away from the U.S. dollar completely as a reserve currency, making it more difficult for our country to borrow money, print more money and keep interest rates low. This will soon have a devastating effect on our currency, the economy, our savings, the stock market, the housing market, and the bond market.
Why? Because hidden deep in this bill is the provision known as FACTA, which stands for the Foreign Account Tax Compliance Act. FACTA forces all worldwide banks to comply with the IRS if they have any transactions in U.S. dollars. Sounds harmless, but it is very dangerous to our economy as those international banks shun the dollar and look toward another strong currency to replace it ”“ perhaps the yuan?
Meanwhile, Chinese officials disputed the report as filled with errors, probably out of fear of losing its status as a developing nation and the pollution-spewing benefits that come with it. You realize that China is not held to the same anti-pollution standards that we here in the U.S. are. A couple of years ago, China passed the United States and become the leader in global trade, but we all knew that, didn’t we? All you have to do is grab anything off the shelf at Walmart and turn it over to see where it’s made. What you see shouldn’t shock you because Americans haven’t been buying American for a very long time.
As the Chinese economy continues to rise and the U.S. economy continues to fall, the shift in global power is going to become even more dramatic. Yes, let us hope for the best for our failing economy, but you also might want to teach your kids to speak Chinese, just in case.
Carmine Castaldo, North Waterboro
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