主题：【整理】zt China helpEurope, AF -- parishg

exchanged, WHERE Europeans can get money to pay back in RMB??

Q2. Given the large trade surplus China enjoyed against Europe, WHERE Europeans can get RMB to pay back loan in RMB?

If RMB is freely exchangeable under a set of new regime, then China is for sure to experience fast capital outflow. And China might soon face another financial crisis of itself.

It is catch-22 for China with this funny proposal. You should immediately figure out the proposer of this plan is brainless. The plan itself will make the system unstable at the beginning--and the default of loan almost 100% certain.

Historical comparison:

America lent money in USD to Europe after WWI and then depreciated USD in early 1930s. It enjoyed huge surplus against Europe in 1920s and early 1930 and is Europe's main creditor. BUT It passed special customs duty law to exclude European export from the US market.

Europeans asked Americans a simple question which signaled how self-contradictory Americans were: given that our export to the US market will be curtailed and we will NOT achieve net export to the US market, WHERE ARE WE GOING TO GET THE USD TO PAY back all the private and gov. loans?

Americans did not care about their self-contradiction and pushed Europeans to pay back debts, then in the end, Europe was pushed into another banking crisis in 1930s and finally ended up in war.