Is China spending its trade surplus at the Olympics and other events?

Americans are currently addicted to cheap Chinese goods and the resulting trade imbalance flows hundreds of billions of dollars to China each year. Some people believe that, with intelligent investing in infrastructure, technology and research, that China will use this huge positive cash flow to their long-term strategic advantage.

Well, it's not much, but after watching the Olympics, there were many examples of China spending money on image-building, and not infrastructure. At least some of the $40 billion China is spending on the Olympics is going toward extravagant, one-time expenses such as the elaborate opening and closing ceremonies, good-will expenses, decorations, landscaping, etc. etc.

And, according to the Wall Street Journal, Shanghai will spend $40 billion for the 2010 World Expo and Guangzhou is estimating $27 billion for the 2010 Asian Games.

On top of all that, U.S. companies are finally getting in on the action for all the infrastructure spending. Maybe there's some hope to balance our trade someday after all...