by M. Bakri Musa

Millions of Chinese had a rude awakening when they returned last month from celebrating their Lunar New Year in their villages. They discovered that the jobs they had in the cities before they left only a few weeks earlier had now disappeared. Tragic though that may be to them individually, the aggregate loss pales in comparison to that suffered by their government through its massive investments in the stocks of American companies and other paper assets like bonds and Treasury Notes.

If only the Chinese government had invested in its people, imagine the good that would do to them, and to China. If their government had spent the funds to build better schools, Chinese schoolchildren would not have dangerous physical facilities that collapse with the slightest tremor. Had those funds been used to build affordable apartments, the Chinese people would have been better housed. That would at least help alleviate their miserable existence.

The Chinese people suffered twice. First, they worked incredibly hard under intolerable conditions and insufferably meager wages so the West could enjoy inexpensive consumer goods. Then the foreign currencies earned by their government from the exports created through their hard work vanished with the downward spiral of Western economies.

When Western consumers could no longer afford to spend, the Chinese were forced to work under even harsher conditions so the products they make could be sold cheaper still. This is just a modern twist to the old “coolie” concept. In the early part of the last century, millions of indentured Chinese were brought to America to work on the gold mines and railways. Today the coolies remain in China; America brings in only the products of their hard labor.

China is not alone in engaging in this folly of investing abroad instead of in their people, so is the rest of Asia. Singapore lost a hundred billion dollars on its American investments. On a per capita basis, Singapore’s loss is massive and readily dwarfs that suffered by China. Read the rest of this entry »