Is China subsidizing America's poorest consumers by undervaluing it's currency?
By keeping the renminbi's value low relative to the dollar isn't China just subsidizing American consumers especially poor people buying low-cost manufactured items such as those sold in Wal-Mart?
Everyone knows we are getting a wide variety and large volume of products from China. What are the Chinese getting in return? The answer is paper IOUs in the form of U.S. dollars. And what do the Chinese do with these dollars? Do they use them to buy tanks and attack helicopters? No, the answer is that they reinvest those dollars back into the U.S. economy and elsewhere through their sovereign wealth funds. They put the money into U.S. businesses which can then expand to generate more jobs for Americans.
Why then are the Chinese subsidizing American consumers and helping the U.S. by investing in U.S. businesses? Because of structural problems in making the transition from inefficient government businesses to private free-enterprise businesses, the unemployment rate in China is already more than nine percent. Because of the trauma and turmoil of their past Cultural Revolution, the Chinese people and government are afraid of social and political unrest. Since their labor market fluidity is not yet adequate to overcome their structural problems, they cannot maximize employment through fiscal and monetary instruments alone. Consequently, they are willing to subsidize American consumers in order to maintain maximum employment in their country. In addition, the structural problems they face have generated inflationary pressure, which is already too strong. They send the dollars back to the U.S. to avoid adding to this inflationary pressure.
We should not criticize the Chinese government for intervening in renminbi-dollar exchange markets to buy up U.S. dollars. They have bolstered the U.S. dollar at the expense of their own currency. However, this has become increasingly difficult. Continual internal budget deficits in the U.S. have contributed to the U.S. dollar falling in value in world currency markets. As their incomes rise, China’s own consumers gain greater market power. They are beginning to provide sufficient internal demand to help sustain employment and higher real wages in China. This virtuous circle should continue to strengthen China’s economy internally and reduce the need for China to artificially undervalue their renminbi.
China’s development has contrasted sharply with India’s. India’s democracy has moved more cautiously than China in pushing through improvements in roads, railroads, bridges, tunnels, ports and airports. China has outlined even bolder infrastructure enhancements for the future including nineteen new regional airports. This is particularly important for China since its trade is based more on physical commodities. India has the advantage of having chosen English as their main commercial language rather than one of their thirteen primary regional or tribal languages. Since many educated Indians speak English, they have had an advantage in the off-shoring of services such as telephone answering services from the U.S.
From their own history as well as world history, the Chinese communist party has learned the danger of a one-man-rule personality cult. After the horrors of their Cultural Revolution they changed their system to provide for the regular replacement of their leadership. As incomes, education and communications grow in China, we can hope for a peaceful, more democratic China in years ahead. China has suffered some growing pains in establishing health and safety standards for its products. The Chinese leadership is clearly very concerned about these problems and determined to enforce higher standards for both internal consumption and exports.
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Here's the first evidence to challenge the "fastest sperm" narrative.
Experts argue the jaws of an ancient European ape reveal a key human ancestor.
- The jaw bones of an 8-million-year-old ape were discovered at Nikiti, Greece, in the '90s.
- Researchers speculate it could be a previously unknown species and one of humanity's earliest evolutionary ancestors.
- These fossils may change how we view the evolution of our species.
Homo sapiens have been on earth for 200,000 years — give or take a few ten-thousand-year stretches. Much of that time is shrouded in the fog of prehistory. What we do know has been pieced together by deciphering the fossil record through the principles of evolutionary theory. Yet new discoveries contain the potential to refashion that knowledge and lead scientists to new, previously unconsidered conclusions.
A set of 8-million-year-old teeth may have done just that. Researchers recently inspected the upper and lower jaw of an ancient European ape. Their conclusions suggest that humanity's forebearers may have arisen in Europe before migrating to Africa, potentially upending a scientific consensus that has stood since Darwin's day.
Rethinking humanity's origin story
The frontispiece of Thomas Huxley's Evidence as to Man's Place in Nature (1863) sketched by natural history artist Benjamin Waterhouse Hawkins. (Photo: Wikimedia Commons)
As reported in New Scientist, the 8- to 9-million-year-old hominin jaw bones were found at Nikiti, northern Greece, in the '90s. Scientists originally pegged the chompers as belonging to a member of Ouranopithecus, an genus of extinct Eurasian ape.
David Begun, an anthropologist at the University of Toronto, and his team recently reexamined the jaw bones. They argue that the original identification was incorrect. Based on the fossil's hominin-like canines and premolar roots, they identify that the ape belongs to a previously unknown proto-hominin.
The researchers hypothesize that these proto-hominins were the evolutionary ancestors of another European great ape Graecopithecus, which the same team tentatively identified as an early hominin in 2017. Graecopithecus lived in south-east Europe 7.2 million years ago. If the premise is correct, these hominins would have migrated to Africa 7 million years ago, after undergoing much of their evolutionary development in Europe.
Begun points out that south-east Europe was once occupied by the ancestors of animals like the giraffe and rhino, too. "It's widely agreed that this was the found fauna of most of what we see in Africa today," he told New Scientists. "If the antelopes and giraffes could get into Africa 7 million years ago, why not the apes?"
He recently outlined this idea at a conference of the American Association of Physical Anthropologists.
It's worth noting that Begun has made similar hypotheses before. Writing for the Journal of Human Evolution in 2002, Begun and Elmar Heizmann of the Natural history Museum of Stuttgart discussed a great ape fossil found in Germany that they argued could be the ancestor (broadly speaking) of all living great apes and humans.
"Found in Germany 20 years ago, this specimen is about 16.5 million years old, some 1.5 million years older than similar species from East Africa," Begun said in a statement then. "It suggests that the great ape and human lineage first appeared in Eurasia and not Africa."
Migrating out of Africa
In the Descent of Man, Charles Darwin proposed that hominins descended out of Africa. Considering the relatively few fossils available at the time, it is a testament to Darwin's astuteness that his hypothesis remains the leading theory.
Since Darwin's time, we have unearthed many more fossils and discovered new evidence in genetics. As such, our African-origin story has undergone many updates and revisions since 1871. Today, it has splintered into two theories: the "out of Africa" theory and the "multi-regional" theory.
The out of Africa theory suggests that the cradle of all humanity was Africa. Homo sapiens evolved exclusively and recently on that continent. At some point in prehistory, our ancestors migrated from Africa to Eurasia and replaced other subspecies of the genus Homo, such as Neanderthals. This is the dominant theory among scientists, and current evidence seems to support it best — though, say that in some circles and be prepared for a late-night debate that goes well past last call.
The multi-regional theory suggests that humans evolved in parallel across various regions. According to this model, the hominins Homo erectus left Africa to settle across Eurasia and (maybe) Australia. These disparate populations eventually evolved into modern humans thanks to a helping dollop of gene flow.
Of course, there are the broad strokes of very nuanced models, and we're leaving a lot of discussion out. There is, for example, a debate as to whether African Homo erectus fossils should be considered alongside Asian ones or should be labeled as a different subspecies, Homo ergaster.
Proponents of the out-of-Africa model aren't sure whether non-African humans descended from a single migration out of Africa or at least two major waves of migration followed by a lot of interbreeding.
Did we head east or south of Eden?
Not all anthropologists agree with Begun and his team's conclusions. As noted by New Scientist, it is possible that the Nikiti ape is not related to hominins at all. It may have evolved similar features independently, developing teeth to eat similar foods or chew in a similar manner as early hominins.
Ultimately, Nikiti ape alone doesn't offer enough evidence to upend the out of Africa model, which is supported by a more robust fossil record and DNA evidence. But additional evidence may be uncovered to lend further credence to Begun's hypothesis or lead us to yet unconsidered ideas about humanity's evolution.
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