The popular Facebook Page, Lapu Lapu revealed through a viral post that Philippines is not the most dependent country on China but it’s the United States of America (USA). The FB Page also cited an article written by Business Insider on How China and the United States became dependent with each other.
Based upon the article posted by Business Insider the United States and China became increasingly reliant on each other for sustainable economic grow as they have fallen into a classic codependency trap.
The codependency between America and China was born in the late 1970s, when the US was in the grips of wrenching stagflation, and the Chinese economy was in shambles following the Cultural Revolution.
The relationships between the US and China morphed int a deeper relationship, the US relied increasingly on China’s vast reservoir of surplus because they lacked savings and they wanted to grow, just to make ends meet.
The Chinese government anchored its currency to US dollar as they built huge state in US Treasuries, which helped America fund record budget deficits. The United States of America provided China with both stability and growth anchors.
China
enabled the US to sidestep the mounting perils of subpar saving,
reckless fiscal policy, and weak household income growth.
Source: Lapu-Lapu FB Page
