While the Bank of China prepares for an IPO and investors will be watching all those rather interesting shall we say bad loans, we see our trade deficit with China go ballistic. In May China's finance minister noted a surge of 44% in their trade surplus with the United States. If the United States does not watch the money flows it will severely hurt our economy and those who watch these things closely ought to understand that.The trade deficit with China was 13 Billion last month alone and as big as that was some were expecting it to be slightly higher. The total last month from China to the United States of America was 73.1 Billion and this is up 25 percent from last year this time.
Luckily on the good news side exports to China were also up by 22% from last year this time and in may the United States shipped 60.1 Billion in goods and services to China.The total for the year so far in 2006 is said to be 46.78 Billion Dollars, but some say that June could be a ball breaker as Christmas Inventory buying starts and continues thru October of 2006.
So where as we are increasing our sales to China, they too are increasing sales to the US at a higher and faster rate; the question remains will these number find equilibrium or can we find a way for a triangular trade route?.One where China buys fuel from other nations and they buy more goods from us? We need a full-circle flow to insure China can maintain reasonable growth and the United States Middle Class can continue to make purchases to hold up the world economies. Consider all this in 2006.
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By: Lance Winslow