S. businesses, helps to fund government and business activities in the U.S., sustaining both social programs and economic growth in the country. This is an incredibly short-term view of the situation, however, and does not take into account the eventuality of China recalling its debt from the United States when it falls due. When this occurs, the United States could find itself in the very uncomfortable position of owing China far more than it can repay, and even making payments on this debt could severely hamper the United States' ability to carry out many of its operations and social programs, and could also place the country's economy at the mercy of foreign whims.
Despite assurances that it will continue to invest in U.S. bonds and securities, China has also indicated that it has concerns regarding the rising amount of U.S. foreign debt and its financial stability (Barkley & Solomon 2009). If these concerns become large enough, China might begin to call in more of its debt in an attempt to obtain what it can from what it may view as a poor long-term investment (Barkley & Solomon 2009). When this happens, the economic outlook for the United States in the long-term will take a sudden downturn, and this could have a major impact on the global economy due to the United States' position within it.
The problem is essentially twofold: first, the massive amount of Chinese-held U.S. debt -- which is still unknown -- gives China a large amount of power in controlling the economic (and thus the political and social) future of the United States, especially in times of economic instability or uncertainty centering on fiscal policy and position within the United States; second, the vast amount of Chinese-held debt is one of the reasons...
Polish Companies Reacted to Ethical Issues and Changes in Business Standards Since the Fall of Communism in 1989? Poland's Economy Pre-Communism's Fall Poland's Natural Resources Minerals and Fuels Agricultural Resources Labor Force The Polish Economy Under Communism System Structure Development Strategy The Centrally-Planned Economy Establishing the Planning Formula Retrenchment and Adjustment in the 1960s Reliance on Technology in the 1970s Reform Failure in the 1980s Poland's Economy After the Fall of Communism Poland After the Fall of Communism Fall of Communism Marketization and Stabilization Required Short-Term Changes Section
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