China is still run by the Party, and there is nothing to stop it from unleashing some other cause or ideology on the country that will cause a similar amount of human suffering, destruction of wealth, and economic disruption.
That, IMO is the latent threat to China’s future prosperity.
A political party is by its very nature a political animal, not an economic one. Money is only a means to a political end, which for Communists is power. China today holds some $800 billion in US financial assets due to the trade balance. What is not often observed is that the Chinese Government is skimming a few percent off all international trade, for the difference in purchasing power parity between the internal currency and the external one is skimmed when the money is exchanged at the window by those engaged in buying Chinese exports.
It is almost interesting why this topic is not of interest to the popular media, nor why the government is sitting on such a large amount of US-denominated instruments. I take it as further proof of what I wrote above: if the Chinese government was interested in improving the lot of the average Chinese citizen it would find ways to spend that mountain of US money on things that would benefit its own citizens. Instead it just collects the interest and lets the debt pile up. To what end? I don’t know, and they aren’t saying.
>>>It is almost interesting why this topic is not of interest to the popular media, nor why the government is sitting on such a large amount of US-denominated instruments.
Did you ever notice how many of our news outlets have affiliate/satellite offices in China? It is obviously needed for world coverage; however, I wonder what policies are in place that lend influence in reporting.