Slashdot Mirror
China May Build an Undersea Train To America
New submitter howtokilltime sends this news from the Washington Post: "China is planning to build a train line that would, in theory, connect Beijing to the United States. According to a report in the Beijing Times, citing an expert at the Chinese Academy of Engineering, Chinese officials are considering a route that would start in the country's northeast, thread through eastern Siberia and cross the Bering Strait via a 125-mile long underwater tunnel into Alaska."
Both sides of the Bering strait are part of the north american plate.
Please, extremely long tunnels already exist such as the one between Hokkaido and Honshu.
Train freight is far cheaper than shipping.
No, water is always the cheapest way to ship things long distance. In fact it's not unusual for container ships from China to use NY harbor (just take a look from the Narrows) in spite of the much longer distance than shipping to the West Coast and then shipping cross-country by rail.
The problem is the proverbial "slow boat to China" (or from China these days). A trans-Pacific cargo ship generally takes around 3 weeks. You could steam faster, but the fuel consumption would rise dramatically.
>My question is what purpose it would solve. By the time the route is finished, there won't be any way for the US to import anything from China. Food exports from USA to China, perhaps, as an attempt to pay the interest on what is owed?
Your post displays a lack of knowledge of how the trade deficit works.
In a nutshell, we don't borrow money from China. We buy goods and services from China, and we use US Dollars for the transaction.
China can then spend those US dollars in the American economy - perhaps to buy American goods in exchange - but they choose instead to put those greenbacks into US treasuries, which is the single safest investment in the world. Other countries would sell those greenbacks on the currency markets to obtain their native currencies, causing currency prices to fluctuate accordingly, but China has decided to keep their exchange rates at artificial levels that advantage them and disadvantage the rest of the world, especially the United States. But I digress.
The US treasuries that China owns can't be all called in at once. They can be sold on the open market, which technically could cause US treasury rates to rise, making borrowing more expensive for the United States, but in all likelihood they would not impact those rates by very much. The important thing here is that China can't roll up to the US Treasury with a briefcase (well, okay - trucks) full of bonds that haven't matured yet and expect to cash in. It doesn't work that way. While the US does pay interest on those treasuries, the interest rates are quite low right now.
There's a lot more to this - but suffice to say, macroeconomics is not microeconomics - things you need to take care of at a household level often don't mesh with what governments have to do in order to keep the books balanced. It's a common misconception that the US national debt is necessarily a bad thing.