All coin leads to China

On Feb 26 issue of The New York Times, there is an interesting article to view the Chinese trade surplus in a historical perspective. Here is the link to the article,
http://www.nytimes.com/2006/02/26/weekinreview/26bradsher.html?_r=1&oref=slogin

Silk road: Ancient Rome imports tons of silk and other goods from China, but have no many products that Chinese are interested in buying except glass.



A gold Byzantine coin excavated from a Chinese tomb.

Today's China exports six times more of goods to the USA than to buy from it. This high trade surplus has caused a lot of trade conflicts, but not much on the price of the Chinese goods and services at home, except the inflation of the real estate price. This one way cash flow also happens at the silk road time before the dark age of Europe. However, the cash surplus does not cause the inflation in China in that time and now. People think the reason is that those surplus does not go into the circultation. Or the economy of China expands at a roughly same rate as its incoming cash. In today's circumstance, the central bank of China invests in Treasuries and mortgages on American homes and stacks up the US dollars. Even though that the US goverment has imposed high pressure on China to increase the value of the Chinese yuan, it has no much effect to this trade inbalance. This re-evaluation seems not the final solution of the problem. China has a big pool of cheap labor, although the price of the labor is going to increase now and in the near future. However, the increases is still quite small compared to the trade scale. In the century of 1800's, British sustained its high trade surplus by positioning millions of Chinese with optium. But today, China wants high-tech stuff from the United States that the states won't sell. Reasons? China is not a 'democratic' country, and its bad record of human rights and intellual property protection issue...