On Nov 12, 2009, at 6:49 AM, Michael Pollak wrote:
>
> I'm a little baffled by this post by Krugman:
>
> http://krugman.blogs.nytimes.com/2009/11/05/the-lost-generation/
>
> And as Matt points out, the giant success story in the developing
> world was China, where the driver was the end of Communism -- not
> modern finance. Actually, it's even more absurd to give finance the
> credit than Matt realizes: China has not been experiencing net
> inflows of capital, partly because it has maintained capital
> controls, effectively insulating itself from the whole finance
> thing.
>
> <end quote>
>
> "China has not been experiencing net inflows of capital?" I'm
> totally down with the argument that China disproves rather than
> proves the Washington Consensus because it broke every rule in the
> book. But I thought this came from harnessing FDI, not excluding
> it. I could swear that China has been one of top destinations for
> FDI for years. No?
>
> And mind you, Krugman's not talking about the last year in this
> post, he's talking about the last 25 years. And it's not a passing
> point, but one he returned the next day as a kind of gotcha.
>
> What am I missing here?
Off the top, it seems that he's referring to financial capital, not direct investment. I might add that for China "FDI" is not really foreign, since so much of it is entirely Chinese (Hong Kong, Taiwan, Singapore).
Shane Mage
> This cosmos did none of gods or men make, but it
> always was and is and shall be: an everlasting fire,
> kindling in measures and going out in measures."
>
> Herakleitos of Ephesos