> But what is the purpose of having a trade surplus? This goes back to Adam Smith, who famously said that the purpose of exporting is to be able to import. To be able to consume other things. That’s the big thing that’s missing in China. They don’t import enough, they don’t consume enough. China’s exports last year grew four times as fast as world trade, and imports didn’t grow as fast as world trade. Something’s wrong there. The philosophy behind China’s economic model is pure mercantilism. They make a virtue of export surpluses and accumulating foreign exchange reserves. That’s what’s wrong.
sayings like this always remind me this:
> In the 18th century, the European demand for Chinese luxury goods (particularly silk, porcelain, and tea) created a trade imbalance between China and Britain. European silver flowed into China through the Canton System, which confined incoming foreign trade to the southern port city of Guangzhou. To counter this imbalance, the British East India Company began to grow opium in Bengal and allowed private British merchants to sell opium to Chinese smugglers for illegal sale in China. The influx of narcotics reversed the Chinese trade surplus and increased the numbers of opium addicts inside the country, outcomes that seriously worried Chinese officials.
Between the 1830s and 1860s, the British Empire widely adopted Adam Smith’s theories as its policy framework, most notably through landmark events such as the repeal of the Corn Laws in 1846, which secured the dominance of _free trade_
At the same time, the British Empire invaded China, twice
suraci•9mo ago
sayings like this always remind me this:
> In the 18th century, the European demand for Chinese luxury goods (particularly silk, porcelain, and tea) created a trade imbalance between China and Britain. European silver flowed into China through the Canton System, which confined incoming foreign trade to the southern port city of Guangzhou. To counter this imbalance, the British East India Company began to grow opium in Bengal and allowed private British merchants to sell opium to Chinese smugglers for illegal sale in China. The influx of narcotics reversed the Chinese trade surplus and increased the numbers of opium addicts inside the country, outcomes that seriously worried Chinese officials.
https://en.wikipedia.org/wiki/First_Opium_War
I'm waiting
suraci•9mo ago
Between the 1830s and 1860s, the British Empire widely adopted Adam Smith’s theories as its policy framework, most notably through landmark events such as the repeal of the Corn Laws in 1846, which secured the dominance of _free trade_
At the same time, the British Empire invaded China, twice