Why a US stimulus plan depends on China

Washington Post,Nov.24, 2008 on page A17: Writer Fareed Zakaria,editor of Newsweek International.

"Economists on both the left and right agree that a massive fiscal stimulus is needed and that for now, we should not be worrying about deficits,which could total between 1 trillion and $1.5 trillion, or between 7 and 11% of GDP- America has to get someone to buy its debt. And the only country with the cash to do so is CHINA.

In September, China became America's largest foreign creditor, surpassing Japan, which no longer buys large amounts of Treasury notes. China is America's banker since China's foreign exchange reserve atand at about $2 trillion to be compared with America's relatively puny $73 billion.

People often say that China and America are equally dependent on each other,says Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics."

In the conclusion of "Work and Study Cycle Theory"(1978)listed at www.loc.gov I envisioned the cooperation and collaboration of USA and China. Morever, I hinted such in all my blogs via www.Sino-American Economics in the past.

Economist Richard Moorsteen of the RAND Corporation published "Remaking China Policy" Harvard University Press in 1971 with the same positive scenario of USA and China. Search Richard Moorsteen at www.Google.com

Since Professor Niall Ferguson describes the birth of a new nation,namely Chimerica i.e. China and USA. Perhaps he would be eminently qualified to be the next US Ambassador to China. Needless to say,President-elect Obama would be in a position to nominate Professor Ferguson for such crucial assignmemt.

Francis Shieh a.k.a. Xie Shihao, a graduate student from China in 1947 and a watcher of Sino-American relations on Monday,November 24, 2008 at 10.15 a.m.