China

For years, economists have mischaracterized the relationship between the United States and China. Most see it as a mutually beneficial system whereby the United States gets cheap products and cheap loans, and China gets manufacturing jobs. But is such an arrangement really a benefit to both parties?

The Americans do well: they get stuff without producing it and they get to borrow money without having to save. For their part, the Chinese get to work without consuming what they produce.

Where's the benefit there?

— Peter Schiff; How an Economy Grows and Why It Crashes

By holding their currency to a strict peg against the U.S. dollar, the Chinese authorities have essentially required that their citizens hold at least some of their savings in U.S. dollars.

Without these savings from China and other nations, everyone in the United States including the government would have a much more difficult time borrowing, and they would likely have to pay much higher interest rates for the privilege. High interest rates and scarce credit would be a lethal combination for a debt-fueled economy.

As current American leaders come into increasing conflict with China, this lifeline needs to be clearly understood, before it is callously cast adrift. Of course, since this relationship cannot last forever,t he sooner it ends the less painful it will be, particularly for Americans. The longer you eat for free, the harder it is to feed yourself when the free food stops coming.

— Peter Schiff; How an Economy Grows and Why It Crashes

Even the totalitarian governments of the 20th century eventually learned the hard way the limits of what could be accomplished by power alone. Chine still has a totalitarian government today but, after the death of Mao, the Chinese government began to loosen its controls on some parts of the economy, in order to reap the economic benefits of freer markets.

— Thomas Sowell; Dismantling America

Ironically, the United States is moving in the direction of the kind of economy that China has been forced to move away from. China once had complete government control of medical care, but eventually gave it up as the disaster that it was.

— Thomas Sowell; Dismantling America