The Chinese Economy

China has a 235 billion dollar trade surplus with the U.S. It is estimated that China has currance that is 40 to 50% undervalued which gives China a trade advantage. They have a foreign exchange reserve of 1.3 trillion dollars and will have a foreign exchange reserve of 2 trillion dollars by 2008. They are using their foreign exchange to tie up oil reserves and critical minerals around the world. The Wall Street Journal quotes the CIA as saying that China has 3000 front companies in the US to collect usefall technology for China. The Central Bank of China requires 5% foreign currancy for every dollar the Central Bank issues. Commercial banks in China are required to keep a reserve requirment of 11% Chinese money in the respective bank. It is easy to see that the huge trade surplus with the U.S. allows China to manufacture almost unlimited amouns of money. Even companies owned by the Chinese government and the Peoples Liberation Army raise money by selling stock on the international market.

James Fritz P.T.Think Tank











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