Real money

by Russ Roberts on March 13, 2009

in Politics

China is worried:

The Chinese prime minister, Wen Jiabao, expressed unusually blunt concern on Friday about the safety of China’s
$1 trillion investment in American government debt, the world’s largest
such holding, and urged the Obama administration to provide assurances
that the securities would maintain their value in the face of a global financial crisis.

They probably should have gotten the guarantees before they bought the securities.

Interesting to know that China has a trillion dollars of our debt. That's it? What are they so worried about? They have a billion or so people. That's only $1000 per capita.

Of course if you think of the Chinese system as a bit of a kleptocracy benefiting the top echelon of the political class disproportionately and assume that class has maybe 1000 influential people, that's $1 billion per relevant person. That would be real money. No wonder they're worked up.


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