China shows WHO is boss?

[don]

Re: China shows WHO is boss?

Or maybe China is just jawboning? They sale us goodies and invest their savings back into USA, inc. USA incorporated provides military services. The Chinese gain access to raw materials in Iraq. Maybe for the Chinese the USA is a good investment. Chinese average Joe stays busy making goodies, USA average Joe keeps busy fighting wars. Win/Win if you are a psychopath.

You're pointing the right way. As EJ stated in his Asylum analysis, under treasuries, when governments buy other government's debt, it's a political decision, not an investment decision.

[iyamwutiam]

Re: China shows WHO is boss?

A perfectly reasonable question Cow...and one that I almost made the effort to answer in my original post, in anticipation that it might be asked. However this is my only downtime day on an extended and intense overseas business trip, and I simply don't have the energy at this very moment to go back and deconstruct a couple of his articles that I saved from a few of years ago to illustrate my point.

So instead let me provide this admittedly inadequate, but hopefully sufficient response:

I do not know if there is anything "wrong" with Henry CK Liu's work as I have not read any of it for some time, but when I was searching it out and reading it regularly a few years ago he consistently wrote from a foundation view of "China good, USA bad". For the most part one could work around that bias and extract the occasional nugget of useful insight. However after the first credit seize up in the summer of 2007 he became pedantic about this "good guy vs bad guy" sentiment in his writings, and I just found it tiresome to wade through it looking for useful new knowledge.

The fact is there are no "good guys" in this story...nobody, including China, is anywhere near lily white or blameless, and every damn one of them continues to contribute to the perilous instability of the global economy [which they all need] because of the understandable motive of pursuing what one perceives to be in one's own immediate or long-term national self-interest. Back then Henry CK Liu would have you believe that China's behaviour in this regard was acceptable, intelligent and to be applauded, while the same from the USA deserved international condemnation.

The cheeky answer to your question is that after reading their writings, I sometimes wonder if Henry CK Liu and Nassim Nicholas Taleb were separated at birth...:p

Apparently -anyone not supporting the ridiculous parasitic relationship of the west and earnestly foisting false premises -that have essentially changed the rather direct 'White Man's Burden' to 'Globalization' is good for you - the benefits of having your labor force be an over-sized sweat shop that is in fact owned and subsidized by Us money and US corporations is obviously a fringe candidate being unveiled is apparently appaling to those who benefit -especially the middle class of the developed world.

Although Harvard educated and an incredibly erudite and well informed writer is thrown in the dustbin -mainly because the conclusions are very uncomforatble for certain people who become waaaaaaaay to comfortable.

As for Taleb-'Fooled by Randomness' is an excoriation of the so-called 'smart' people (who just 'happen' to be predominantly of European heritage -but not necessariyl as PIMCO and Citigroup amongst others have shown). He has quite lucidly explained how being part of the herd is essentially the main prequisite of having the title of 'smart' guy being conferred upon them. But in this book there is a true comprehension of numercay and mathematics that is the grain of irritation for many mathematically challenged and should they be able to try and digest this irritant -no doubt would produce a pearl of wisdom.

His site is very simple www.henryckliu.com . As for Taleb I have the books and it was for me a motivator to delve back into the study of regression, basic statical inference and statistical method.

CK Lie posits correctly that sovereign debt is the the path to remove oneself from the yoke of capitalist parasitism involuntarily placed on less ophisticated understandings and as the understanding of how finance works matures -the path is quite clear. it would be impossible to present a Clif note of any merit on his incredibly detailed and nsightful papers. Start with something you may know -like say Repo auctions.

[jpatter666]

Re: China shows WHO is boss?

Apparently -anyone not supporting the ridiculous parasitic relationship of the west and earnestly foisting false premises -that have essentially changed the rather direct 'White Man's Burden' to 'Globalization' is good for you - the benefits of having your labor force be an over-sized sweat shop that is in fact owned and subsidized by Us money and US corporations is obviously a fringe candidate being unveiled is apparently appaling to those who benefit -especially the middle class of the developed world.

Although Harvard educated and an incredibly erudite and well informed writer is thrown in the dustbin -mainly because the conclusions are very uncomforatble for certain people who become waaaaaaaay to comfortable.

As for Taleb-'Fooled by Randomness' is an excoriation of the so-called 'smart' people (who just 'happen' to be predominantly of European heritage -but not necessariyl as PIMCO and Citigroup amongst others have shown). He has quite lucidly explained how being part of the herd is essentially the main prequisite of having the title of 'smart' guy being conferred upon them. But in this book there is a true comprehension of numercay and mathematics that is the grain of irritation for many mathematically challenged and should they be able to try and digest this irritant -no doubt would produce a pearl of wisdom.

His site is very simple www.henryckliu.com . As for Taleb I have the books and it was for me a motivator to delve back into the study of regression, basic statical inference and statistical method.

CK Lie posits correctly that sovereign debt is the the path to remove oneself from the yoke of capitalist parasitism involuntarily placed on less ophisticated understandings and as the understanding of how finance works matures -the path is quite clear. it would be impossible to present a Clif note of any merit on his incredibly detailed and nsightful papers. Start with something you may know -like say Repo auctions.

Well, as your name states, we know what you are now. A nitwit.

[ThePythonicCow]

Re: China shows WHO is boss?

Well, as your name states, we know what you are now. A nitwit.

I for one found that judgement "nitwit" to be harsh and unjustified. But perhaps that is just because I too am a nitwit so missed the obvious justifications. Oh well.

[jpatter666]

Re: China shows WHO is boss?

I for one found that judgement "nitwit" to be harsh and unjustified. But perhaps that is just because I too am a nitwit so missed the obvious justifications. Oh well.

I felt the whole response was an unjustified slam and the ending tag line about repos insulting. Maybe I read it wrong -- if so, my apologies.

[ThePythonicCow]

Re: China shows WHO is boss?

I felt the whole response was an unjustified slam and ...

Well, yeah, there's that too. Guess I should retire from trying to referee a spitting contest .

[GRG55]

Re: China shows WHO is boss?

Apparently -anyone not supporting the ridiculous parasitic relationship of the west and earnestly foisting false premises -that have essentially changed the rather direct 'White Man's Burden' to 'Globalization' is good for you - the benefits of having your labor force be an over-sized sweat shop that is in fact owned and subsidized by Us money and US corporations is obviously a fringe candidate being unveiled is apparently appaling to those who benefit -especially the middle class of the developed world.

Although Harvard educated and an incredibly erudite and well informed writer is thrown in the dustbin -mainly because the conclusions are very uncomforatble for certain people who become waaaaaaaay to comfortable.

As for Taleb-'Fooled by Randomness' is an excoriation of the so-called 'smart' people (who just 'happen' to be predominantly of European heritage -but not necessariyl as PIMCO and Citigroup amongst others have shown). He has quite lucidly explained how being part of the herd is essentially the main prequisite of having the title of 'smart' guy being conferred upon them. But in this book there is a true comprehension of numercay and mathematics that is the grain of irritation for many mathematically challenged and should they be able to try and digest this irritant -no doubt would produce a pearl of wisdom.

His site is very simple www.henryckliu.com . As for Taleb I have the books and it was for me a motivator to delve back into the study of regression, basic statical inference and statistical method.

CK Lie posits correctly that sovereign debt is the the path to remove oneself from the yoke of capitalist parasitism involuntarily placed on less ophisticated understandings and as the understanding of how finance works matures -the path is quite clear. it would be impossible to present a Clif note of any merit on his incredibly detailed and nsightful papers. Start with something you may know -like say Repo auctions.

You my friend should pay a little visit to some of the places I've been in sub-Saharan Africa...to see what the Chinese [not the Americans!] are doing there.

I doubt it would change Harvard educated Henry's mind...but it might change yours.

[iyamwutiam]

Re: China shows WHO is boss?

You my friend should pay a little visit to some of the places I've been in sub-Saharan Africa...to see what the Chinese [not the Americans!] are doing there.

I doubt it would change Harvard educated Henry's mind...but it might change yours.

I am not necessarily sure that it would invalidate Henry's work. Really -it is a bit dense -but I really think that he is one of the few economists I read that I can say is earnest, erudite and very rigorous in his analysis. Too often we live in a world where true analysis is shunted -as I said earlier -his articles on sovereign debt and particularly bad money chasing out good (a historical retrospective of the use of British gold destroying a perfectly good silver based system in India and China)- are worth the time -if only to respect the effort required to create a detailed perspective and historical narrative.

it may not be a as entertaining as the history channel or fox news but it surely is commendable -imo.

[iyamwutiam]

Re: China shows WHO is boss?

Python - I appreciate your kindness - and I thank you. But to reply would have an effect that quite frankly is already too prevalent in the world -why bring it to this forum.

Contempt, prior to complete investigation, enslaves men to ignorance. - Dr. John Whitman Ray

As scarce as truth is, the supply has always been in excess of the demand. - J Billings

All truth passes through three stages. First, it is ridiculed, second it is violently opposed, and third, it
is accepted as self-evident. - Arthur Schopenhauer Philosopher, 1788-1860


If the truth is that ugly -- which it is -- then we do have to be careful about the way that we tell the
truth. But to say somehow that telling the truth should be avoided because people may respond badly to
the truth seems bizarre to me. - Chuck Skoro, Deacon, St. Paul's Catholic Church

[GRG55]

Re: China shows WHO is boss?

...* As we all know, prior to the global trade bust a whopping 40% of China's GDP came from exports. Regardless of what current Chinese government statistics imply, there is absolutely no possible way that China's economy escaped the severe effects of the trade collapse that has so obviously knocked the legs out from under export dependent Japan and Germany. A billion people who are still dragging themselves out of decades of poverty cannot quickly replace the external demand that drives China's economy...that will take years, decades. And while Chinese policy makers are taking legitimate steps to make this shift, they need to buy as much time as they can to achieve it. The "China good, America bad" cohort believes that somehow Beijing can magically transform the economy, do a 180-turn and promote the draw down of savings that it spent years conditioning its citizens to accumulate, and suddenly create huge internal demand. Not only is that impossible, I don't see any evidence that the Chinese want to achieve that quickly even if it was possible. And in the meantime this is why they cannot and will not stop manipulating the currency exchange rate, running trade and current account surpluses, expanding production capacity [the majority of which is to capture more global market share, NOT to promote and fill domestic demand] and supporting the debt issuance of the current account deficit trade partners that make all that possible. The problem China has is "Will [can?]those trade partners continue to support China?" My guess at the answer is "Not for much longer, unless China voluntarily begins to shift its policy". Stay tuned. This global soap opera has many more episodes to come...;)

And China just keeps pushing the limit...[for it feels it has no other choice]. This is simply not a sustainable position for China, or the rest of the world. Hard to imagine that this isn't going to all end in tears some day...but in the meantime we can safely ignore all those experts claiming that China can, or will, pull the rug out from under the US Dollar...that just isn't going to happen any time soon.

From the FT this morning:

Wen resolute on strength of currency

By Geoff Dyer in Beijing
Published: December 27 2009 12:52 | Last updated: December 27 2009 12:52


Chinese Premier Wen Jiabao said on Sunday that Beijing would not give in to foreign demands for its currency to strengthen, taking an increasingly defiant tone amid mounting international pressure for China to shift its exchange rate policy.

In an interview published by the Xinhua news agency on Sunday afternoon, Mr Wen said some of the demands for China to appreciate its currency were an effort to contain the country’s development.

”We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the renminbi to appreciate, and on the other hand, you are taking all kinds of protectionist measures,” he said.

By keeping the Chinese renminbi stable against the US dollar, China was contributing to the recovery in the global economy, he said. ”The purpose [of these calls for appreciation] is to hold back China’s development,” he added.

China has effectively pegged its currency to the US dollar since the middle of last year, which has meant that the renminbi has depreciated by about 9 per cent against the currencies of its main trading partners since early this year, even though the Chinese economy has rebounded more quickly than any other major economy...

...In recent weeks the demands for China to appreciate its currency in order to help a rebalancing of the global economy have increased to include not only the US and the European Union but also developing nations such as Brazil and Russia...

...According to Xinhua, Mr Wen also said China would continue to fight for “its due rights for further development” in future climate change talks. China has received stinging criticism from some participants of the Copenhagen talks who accused Beijing of blocking a broader deal. Even President Barack Obama chided China for “skipping negotiations”, a likely reference to one meeting involving Mr Obama to which Mr Wen sent a deputy foreign minister in his place.

China has tried to fight back in recent days. Measures included a long article on Xinhua which said Mr Wen had not been informed of the “mysterious” meeting with Mr Obama.


Wen Says China Will Cool Property Prices, Stand Firm on Yuan

Dec. 27 (Bloomberg) -- Chinese Premier Wen Jiabao said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at “reasonable” levels...

...China’s property prices climbed last month at the quickest pace since July 2008, adding to concern that record lending and inflows of money will inflate asset bubbles in the world’s fastest-growing major economy. Central bank adviser Fan Gang said Nov. 18 that the nation needs to be on alert for stock, real-estate and commodity bubbles as global capital flows into emerging economies.

“It’s difficult to see how serious the government is about cooling the property market,” said Andy Xie, former Morgan Stanley chief Asian economist...


China Raises GDP Growth Estimates, Narrowing Gap With Japan

Dec. 25 (Bloomberg) -- China raised its 2008 growth estimate to 9.6 percent from 9 percent and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.

Gross domestic product was 31.405 trillion yuan ($4.6 trillion) last year, the statistics bureau said at a briefing in Beijing today. That compares with a previous 30.067 trillion yuan and the World Bank’s estimate of $4.9 trillion for Japan...


...“The big underlying factor propelling China’s growth is the continued migration of people from the agricultural sector to the more modern economy -- industry and services,” said David Cohen, an economist at Action Economic in Singapore. “There’s no stopping China.”...

Just like there was no stopping Dubai...:rolleyes:

[iyamwutiam]

Re: China shows WHO is boss?

And China just keeps pushing the limit...[for it feels it has no other choice]. This is simply not a sustainable position for China, or the rest of the world. Hard to imagine that this isn't going to all end in tears some day...but in the meantime we can safely ignore all those experts claiming that China can, or will, pull the rug out from under the US Dollar...that just isn't going to happen any time soon.

From the FT this morning:

Wen resolute on strength of currency

By Geoff Dyer in Beijing
Published: December 27 2009 12:52 | Last updated: December 27 2009 12:52


Chinese Premier Wen Jiabao said on Sunday that Beijing would not give in to foreign demands for its currency to strengthen, taking an increasingly defiant tone amid mounting international pressure for China to shift its exchange rate policy.

In an interview published by the Xinhua news agency on Sunday afternoon, Mr Wen said some of the demands for China to appreciate its currency were an effort to contain the country’s development.

”We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the renminbi to appreciate, and on the other hand, you are taking all kinds of protectionist measures,” he said.

By keeping the Chinese renminbi stable against the US dollar, China was contributing to the recovery in the global economy, he said. ”The purpose [of these calls for appreciation] is to hold back China’s development,” he added.

China has effectively pegged its currency to the US dollar since the middle of last year, which has meant that the renminbi has depreciated by about 9 per cent against the currencies of its main trading partners since early this year, even though the Chinese economy has rebounded more quickly than any other major economy...

...In recent weeks the demands for China to appreciate its currency in order to help a rebalancing of the global economy have increased to include not only the US and the European Union but also developing nations such as Brazil and Russia...

...According to Xinhua, Mr Wen also said China would continue to fight for “its due rights for further development” in future climate change talks. China has received stinging criticism from some participants of the Copenhagen talks who accused Beijing of blocking a broader deal. Even President Barack Obama chided China for “skipping negotiations”, a likely reference to one meeting involving Mr Obama to which Mr Wen sent a deputy foreign minister in his place.

China has tried to fight back in recent days. Measures included a long article on Xinhua which said Mr Wen had not been informed of the “mysterious” meeting with Mr Obama.


Wen Says China Will Cool Property Prices, Stand Firm on Yuan

Dec. 27 (Bloomberg) -- Chinese Premier Wen Jiabao said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at “reasonable” levels...

...China’s property prices climbed last month at the quickest pace since July 2008, adding to concern that record lending and inflows of money will inflate asset bubbles in the world’s fastest-growing major economy. Central bank adviser Fan Gang said Nov. 18 that the nation needs to be on alert for stock, real-estate and commodity bubbles as global capital flows into emerging economies.

“It’s difficult to see how serious the government is about cooling the property market,” said Andy Xie, former Morgan Stanley chief Asian economist...


China Raises GDP Growth Estimates, Narrowing Gap With Japan

Dec. 25 (Bloomberg) -- China raised its 2008 growth estimate to 9.6 percent from 9 percent and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.

Gross domestic product was 31.405 trillion yuan ($4.6 trillion) last year, the statistics bureau said at a briefing in Beijing today. That compares with a previous 30.067 trillion yuan and the World Bank’s estimate of $4.9 trillion for Japan...


...“The big underlying factor propelling China’s growth is the continued migration of people from the agricultural sector to the more modern economy -- industry and services,” said David Cohen, an economist at Action Economic in Singapore. “There’s no stopping China.”...

Personally I never found Liu to be 'pro-china'. I think what he has said is that a country issuing it's own debt -against it's own assets is the wiser course of action and has very little downside. In this -he means to remove oneself from the dollar denominated or other currency denominated debt -that can have an adverse impact on the stability of the country -e.g Asian Crisis. He did a very nice article on how Hitler's use of labor certificates -were in fact an issuance of sovereign debt. In essence -by virtue of the US dollar being a reserve currecy -the US is in fact exporting its inflatin to their trading partners -such as the Gulf/China/India and Brazil. It seems to be a fair argument that can apply to any country and not specifically China.

There is no doubt -that when looks at the underlying picture -Developed countries are taking surpluses in currency they can not use to develop their own countries and this surplus has to be recycled in to Treasury Bills. If they received rupees, renimbi, yen -it could be plowed back directly into their own infra-structure.

Also Armstrong has pointed out the importance of currency controls and some of the reasons (from the point of any country) why it is preferable to limit capital flow and also exchange rates -just ask Russia -this last year -and sure enough -many countries are doing just that -Brazil/Russia and China. Countries that allow free floating exchange, loose capital flow rules are essentially asking for speculators to attack their currency and multi-nationals to export profits off-shore -there by removing the multiplier effect and also continuing the capital shortage in most of these countries. The race to the bottom -in terms of exchange rates -hurts the country -who has determined a course of export driven economies exchanging tangible goods for scrip -which is recycled back to the US economy and NOT on the domestic economy -leading to poorer infra-structure, more disparity of income and being preyed upon by a cabal of mainly western banks who via the Washington consensus buy national industries for literally a song.

The events of Ukraine, Eastern Europe, South America -are well established and I think Liu speaks not from a Chinese view but a nationalistic view (any nation). China is moving to a consumer based economy but will keep its feet firmly mired in manufacturing. They have spent billions in high speed rail networks and in the coming decades -as the US highway system was the envy of the world -their rail network will be the same.

Ultimately - the point is -that many economist from other countries realize that the race to the bottom hurts their countries more than helps them. As pointed out earlier -the data is in -and its very similar to the Stadium deals -where the cost is foisted on taxpayer, future generations of citizenry with the specious promises of 'community' benefit, jobs , development etc. They have been found to be false for decades and yet -the practice still continues -not for the betterment of our country but to line the pockets of politicians and millionaires. On a macroscopic level it amounts to the same thing.

These exporting nations are better off -running sovereign debt against the value of their produce/natural resources etc than being strangled into continual colonialism by giving up their right to issue debt and participating in a system where they are obviously and continually being taken advantage of and subsidize their own colonization.

[audrey_girl]

Re: China shows WHO is boss?

Interesting article from Ilargi today on this topic -- and quite relevant to what you say

Why China won't succeed America

hi -

just wanted to thank you for pointing out this blog. Very interesting perspective here.

regards -

ag

[touchring]

Re: China shows WHO is boss?

hi -

just wanted to thank you for pointing out this blog. Very interesting perspective here.

regards -

ag

From his writing, Ilargi is someone who doesn't know anything about China and who probably has not been to China.

In the short term, China's a huge RE bubble waiting to explode, but in the long term, you should really read on China's rail projects to see where it is heading.

664 miles at 225 mph from Guangzhou to Wuhan. almost entire rail line is elevated, just completed. here's a video report on BBC news.
http://news.bbc.co.uk/2/hi/asia-pacific/8406910.stm

The Wuhan-Guangzhou high-speed railway, with trains running at a world-record 350 km per hour, started operation on Saturday. [China Daily]

The Wuhan-Guangzhou high-speed railway, arguably the world's fastest train journey at a speed of 350 km/h, started operation on Saturday.

Two passenger trains rolled out of Wuhan Railway Station and Guangzhou North Railway Station at about 9 am and reached their respective terminals within three hours, compared with the previous 10-hour journey.

The service between Wuhan, capital of central Hubei province, and Guangzhou, capital of Guangdong province and a business hub in the southern region, started a trial run on Dec 9 and hit a top speed of 394.2 km/h.

A 600-member delegation from Xianning city boarded the train at 10 am from Xianning North Station to promote tourism and attract investment in Guangzhou. Nearly two hours later, they had to take off winter coats in Guangzhou where the temperature was about 20 C at noon.

"We have long been waiting for the service to start," said Zheng Zengjin, manager of Yaochi Hotel in Xianning and a delegation member.

In China, traveling by train usually meant an overnight journey.

However, the government launched a major upgrade of the nation's overstretched railway system over the past two decades.

It took more than 20 years to bump up the speed of passenger trains from 43 km/h in 1978 to 100 km/h in 2001.

But it took only nine years to triple it to 350 km/h, said Xu Fangliang, general engineer in charge of designing the Wuhan-Guangzhou high-speed line.

The average speed of the high-speed railway is 243 km/h in Japan, 232 km/h in Germany and 277 km/h in France, he said.

A kid enjoys the ride on the new high-speed Wuhan-Guangzhou rial line on Saturday.

China will build 42 high-speed passenger rail lines with a total length of 13,000 km in the next three years, covering more than 90 percent of the population.

By 2012, trips from Beijing to most provincial capitals would only take between one and eight hours, said Wang Yongping, the Railway Ministry spokesman.

High-speed rail services from Beijing to Hong Kong are expected to open in three years, cutting the journey from 23 hours to eight. The one-way trip from Shanghai to Hong Kong will be shortened to six hours from the current 18, he said.

High-speed trains not only shorten the distance between cities but also change the speed of China's economic growth, said Wang Xiaoguang, a professor with the Chinese Academy of Governance.

China, a vast country that is often worried about the wide income gap between its highly developed coastal areas and the lagging interior, is looking to the railways to help spread the wealth, he said.

China has adopted a strategy of developing the west and invigorating the central region for about 10 years, thus reducing social and economic imbalances.

But the initiative has been hampered by the slow and expensive transport system, both passenger and cargo. However, "things will change in the future as fast-train lines may help reduce these problems", Wang said.

A high-speed rail line linking Zhengzhou, capital of Henan province and Xi'an, the ancient capital in the northwest Shaanxi province, will be opened soon.

"This will encourage more coastal industries to invest in the northwest where resource and labor costs are lower," Wang said.

Experts also said the upgrade to a high-speed network will allow the old lines to be used for cargo, thus helping inland regions to transport its resources and products efficiently to the eastern ports.

"In the peak traffic season such as Spring Festival ... the railway bureaus have to suspend freight transportation to guarantee smooth passenger flow," Wang said.

"The bottleneck is likely to be eliminated. As high-speed passenger trains ease the pressure on traffic, the railways will focus more on cargo transportation."

And this is on top of metro projects in about two dozen cities.

[GRG55]

Re: China shows WHO is boss?

From his writing, Ilargi is someone who doesn't know anything about China and who probably has not been to China.

In the short term, China's a huge RE bubble waiting to explode, but in the long term, you should really read on China's rail projects to see where it is heading.

And this is on top of metro projects in about two dozen cities.

I am trying to understand what is it about "high speed rail links" that has everybody so ga-ga? Japan has had high speed rail for a long time. So have the French...and to a minor degree the Brits and the Belgians [Eurostar].

So what. How does being able to whisk people back and forth at enormous speed over tremendously expensive railbeds and in tremendously expensive rail carriages, automatically confer on an economy or a nation some innate competitive advantage?

[iyamwutiam]

Re: China shows WHO is boss?

I am trying to understand what is it about "high speed rail links" that has everybody so ga-ga? Japan has had high speed rail for a long time. So have the French...and to a minor degree the Brits and the Belgians [Eurostar].

So what. How does being able to whisk people back and forth at enormous speed over tremendously expensive railbeds and in tremendously expensive rail carriages, automatically confer on an economy or a nation some innate competitive advantage?

Transfer of goods and services across great distances always helps commerce. People can be seen as capital and so that also helps. Think about the immense benefit that Walmart/UPS/Fed Ex and every other US company gets due to the enormous investment of the US government in our highway system. Perhaps on the individual level (commuter) it is not as much bang for the buck. But companies like Walmart/Home Depot/basically most manufacturing companies -reap enormous benefit from this subsidy.