The Atlantic interviews the head of CIC, which manages a chunk of China’s reserve stash.
I get a kick out of articles like this who look at the Chinese as some sort of benevolent Financial tooth fairy. The Chinese lend the US cash for one reason: in order to be able to sell their products here. A pure commercial relationship.
It’s called vendor financing; if you want to sell your stuff, you’ve got to get the customer the dough to do the deal. No dough, no deal. And workers move back to the far from the cities and grow frustrated with the government. That’s what the keeps the Chinese government awake at night, not the value of their Morgan Stanley investment.
