Monday, March 12, 2007


Niall Ferguson analyzes the strange relationship that he calls Chimerica:

Think of the United States and the People's Republic not as two countries, but as one: Chimerica. It's quite a place: just 13 per cent of the world's land surface, but a quarter of its population and fully a third of its economic output. What's more, Chimerica has accounted for around 60 per cent of global growth in the past five years.

Their relationship isn't necessarily unbalanced; more like symbiotic. East Chimericans are savers; West Chimericans are spenders. East Chimericans do manufactures; West Chimericans do services. East Chimericans export; West Chimericans import. East Chimericans pile up reserves; West Chimericans obligingly run deficits, producing the dollar-denominated bonds that the East Chimericans crave. As in all good marriages, the differences between the two halves of Chimerica are complementary.

[HT: The Business of America is Business ]

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