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It is becoming quite humorous watching the continual efforts of Western commentators (mostly American) to bash the Chinese economy. The accusations these pundits make are as numerous as they are ludicrous.

Perhaps the most-frequent criticism is that because it is the U.S.'s largest foreign “creditor” (i.e. lender), that China has a serious “problem” due to the fact that the U.S. is totally unable to repay what it has borrowed from China. Frankly, it is hard to imagine any adult without a severe mental disability reaching such an idiotic conclusion.

For anyone who places any credence in this assertion, I suggest that you do a little private research. Go to the bank who holds the mortgage on your house, and say to them, “I can't pay my mortgage payments, which means that you have a serious problem.”

Once the bank's loan officer finishes laughing, he or she would reply, “No problem. We'll simply take your house.” In short, it is obvious that defaulting on debt is almost always a much more serious problem for the party defaulting than for the creditor.

Now, if China had racked-up massive, national debts, and then been foolish enough to lend the United States trillions of dollars, then the dynamics could be much different. However, as an economy with a large operating surplus, even if it had to write-off every penny of U.S. debt, China could make up those losses through future surpluses.

Conversely, as the largest debtor in the history of the world, and as a nation with a huge “structural deficit” (a deficit which exists even at the peak of economic cycles), defaulting on its debts (again) would have devastating consequences for the U.S.

To start with, the U.S. would be immediately cut-off from any more foreign lending. While international agencies created to help the world's poorest nations might be willing to provide the U.S. with with a limited amount of “emergency funding”, any assistance of that nature would come with many strings attached (as it does for all other countries).

First, no international agency would lend the U.S. money to fund its military occupations. Thus, such panhandling would require the U.S. to immediately end those military occupations. In fact, with the U.S. still spending more on its military than all the rest of the world combined, it would likely be ordered to dramatically slash all military spending as one of the conditions for receiving funding.

There would likely be many more economic conditions attached, however, given the U.S,'s warmonger-tradition, this stipulation alone would cause the U.S. government to refuse assistance. This would leave the U.S. government being forced to simultaneously severely slash government spending and print up unprecedented amounts of new money – the very definition of “hyperinflation”. So let's end all the idiotic commentary about how the U.S.'s insolvency is “China's problem.”

The next criticism of China is somewhat related: it is “too dependent” on exports to nations with much weaker economies. Once again the critics are attempting to turn reality upside-down. Who's shoes would you rather be in, those of a country with a huge, trade surplus; producing vast amounts of manufactured goods – and sitting on a mountain of those trading profits? Or, would you rather be in the U.S.'s position, where it has abandoned most of its own manufacturing – and now cannot afford to pay for many of the basic, consumer goods which it had been importing in vast quantities, while drowning in trillions upon trillions of dollars of accumulated debt?

The only long-term solution for the U.S. is to re-invent its manufacturing sector, so that its economy begins to produce wealth again, rather than just more debt. However, thanks to two decades of short-sighted, self-destructive economic policies (including dismantling most of its existing manufacturing), the U.S. has neither the capital to fund such an economic expansion, nor the spending-power amongst its consumers to pay for those goods, once produced.

Conversely, the solution to China's much less ominous problem is to simply buy more of their own goods domestically. This is exactly what is occurring in China, with a domestic economy which has been growing at a phenomenal rate of 20% (or more) per year – which implies doubling in size every four years.

However, China's critics never let reality get in the way of their ranting. They point to China's massive pool of savings and miniscule amount of debt and claim China has a big “spending” problem – despite the fact that China already has the world's 5^th largest domestic economy (measured in dollars).

The critics counter that China 'only' has a consumption-to-GDP ratio of 36%, versus roughly 50% for Europe and Japan, and more than 70% in the United States. The U.S. has spent itself into hopeless insolvency, while both Japan and many European nations have serious debt issues, which begs the question: who really needs to alter their consumption behavior?

The Chinese people currently have a savings rate of roughly 25% - six times higher than in the U.S., after the large, recent jump in the U.S. savings rate. Total individual debt for Chinese consumers amounts to only 3% of GDP, compared to 12% in Brazil and 7% in Russia (two other “BRIC” economies). These numbers are also cited as “problems”.

In fact, with vast savings and virtually no debt, what this means is that the phenomenal rate of growth in China's domestic economy can be sustained for many years – before even beginning to become leveraged with debt. Conversely, it will take decades for U.S. consumers to reduce their debt-leverage to a point where they are capable of increasing spending again (in real, inflation-adjusted dollars) – without immediately careening toward personal bankruptcy. Yet these idiot-critics refer to China's growth (backed by real savings) as a “bubble” - while claiming that the U.S.'s debt-saturated economy would “lead the world out of recession”.

Virtually all of these criticisms can be boiled-down to a claim that China's “economic problem” is having too much savings and too little debt – in other words “too much money”.

Finally, in the land which leads the world in fraudulent accounting and falsified “statistics”, China's legion of U.S. critics hypocritically accuse China of lying about its rate of growth. To “prove” this accusation, these hypocrites look no further than China's export-based, coastal cities. They point to widespread unemployment, factory closings, and social unrest among the 100 million (or so) inhabitants of these cities – and claim this proves China is “lying” in claiming current GDP growth of around 8%.

In reality, these coastal cities comprise less than 10% of China's total population, and no more than ¼ of GDP. In reporting its GDP, China has openly stated that this segment of its economy (the “first tier cities”) is only growing at a little more than 1%. The vast majority of China's economic growth is coming from its interior “second” and “third tier” cities, which are entirely focused on China's domestic economy – which (as mentioned earlier) is growing by more than 20% per year.

The Chinese government, itself, is totally focused on its interior economy in its own “stimulus spending”. Instead of propping-up the struggling segments of its economy with hand-outs (which is precisely where most of the U.S.'s “stimulus” dollars have gone), China's “stimulus” is going into massive, infrastructure investment, as well as environmental initiatives such as its “grain-for-green” program, where it is successfully reversing some of the environmental degradation caused by generations of unsustainable land-use practices in the backward regions of Western China.

This is not to say that China is without its own set of social, economic and environmental problems. However, what sets China apart from many other nations is that a) it is working at fixing these problems (rather than hiding or simply ignoring them); b) it can actually point to positive progress in dealing with these problems; and c) it can afford to fund the necessary programs to continue addressing these problems in the future.

In the United States, even in the few areas where the government is actually trying to make things better (i.e. the small segment of the government not devoted to serving Wall Street), every penny of money being spent in a positive manner is either borrowed or freshly-printed off of Ben Bernanke's magic printing-press. Given that the #1 problem in the U.S. is more debt than any other nation in history, any limited progress it is making is being offset by dramatically accelerating its regression toward formal default on its debts.

Clearly, China's critics (especially those in the U.S.) would be much better off studying all the things which China's government is doing successfully to improve its economy, and the standard of living of its citizens rather than squandering their time inventing imaginary “faults”. I wish that my biggest “problem” was having too much money.

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