The story of Treasury Secretary John Snow telling the Chinese that they should start spending more is a couple of weeks old, but probably still relevant. Snow sounds like those analysts who you hear on conference calls, berating companies for not getting leveraged enough. By now, as you probably know, we think companies should tune these folks out, and only take out debt when it is actually prudent, not just as a way of passing more cash to shareholders. We'd encourage the Chinese to do the same.
As for the idea that more robust Chinese consumer will help ease the trade-deficit, we're skeptical. Most likely, the Chinese consumer will come to the same conclusion that the American consumer has, that the best bargains are on goods made in China.
Perhaps if the Chinese are interested in financing Male Plastic Surgery they might fly here. Doubt it.
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