World Carbon Emissions

Monday, July 06, 2009



J. Saladin Harimau said...

China is fast becoming a global behemoth in many aspects. What do you think China's effect would be on America's recovery from this recession?

Brandon Rowley said...

First of all, I think China is largely responsible for enabling the US to moderate the current recession. Their continued purchases of US Treasuries have allowed the US government to run extremely high deficits and still maintain strength in the dollar relatively.

China is integral to the economic recovery. On a global scale, the hope is that the Chinese savings rate declines, perhaps from the 20% range to the 10% range, allowing US consumers to increase savings rates, from 0% to 6-8% or so, without causing major disruption to the global economy.

The US consumer needs to deleverage but our GDP is 70% consumer spending. This will cause contraction in our economy unless we can increase exports. My thought process is that this can be done in the next 10 years through clean technology innovation. The US could lead the world into the green era redefining itself and putting the economy on a sustainable growth path.

I don't know if any of this will happen but it seems like a logical progression. Time will tell.

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