Now shopping mall giant (Dalian) Wanda, owned by Chinaâs richest man Wang Jianlin, and Vanke, the worldâs biggest residential real estate developer, founded by the mountaineering-loving Wang Shi, have âstunned the capital markets,â in the words of Chinese news site The Paper, by announcing a âstrategic partnership.â.
The second macroeconomic consideration of increased imports is the impact on exchange rates. As we have shown in the previous section, as U.S. consumers increase their consumption of imports, the supply of dollars in foreign exchange markets rises.
Of course they matter. Trade deficits arise when we import more than we export. Easy said. It's a tad bit more complicated. When we keep incurring these deficits, year after year, we use our domestic currency (the $) to pay for those imports. This results in our trade partners getting a considerable supply of those $.