October 18, 2006

You step on one corner of the dry hide and up goes another

Sir, Martin Wolf gets it right when he ends up his series on China telling us that “A domestic spending surge is the best thing for China” (October 18) though we should remember that any and they lived happily ever after would be quite premature. Since economics is like the dry hide and whenever you step on one corner to put it down up goes another, the problem of increasing Chinas domestic consumption is that on the margin a society going from bicycles into cars, might place extreme pressure on some other serious bottlenecks in the world, such as oil. But then again why should the Chinese refrain from consuming oil when for instance the US on a per capita basis gobbles it up a twelve times faster rate.