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Real money

Posted By Russ Roberts On March 13, 2009 @ 4:36 pm In Politics | Comments Disabled

China is worried [1]:

The Chinese prime minister, Wen Jiabao [2], expressed unusually blunt concern on Friday about the safety of China [3]’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 [4].

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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[1] is worried: http://www.nytimes.com/2009/03/14/world/asia/14china.html?hp

[2] Wen Jiabao: http://topics.nytimes.com/top/reference/timestopics/people/w/wen_jiabao/index.html?inline=nyt-per

[3] China: http://topics.nytimes.com/top/news/international/countriesandterritories/china/index.html?inline=nyt-geo

[4] financial crisis: http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/index.html?inline=nyt-classifier

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