It'll take a lot more than a bit of liquidity to make a reserve currency. It's moving in the right direction, but it's far away from getting there.
About market mechanism...read up Taylor's rule. You'll get a kick
Chinese Economics Thread
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It'll take a lot more than a bit of liquidity to make a reserve currency. It's moving in the right direction, but it's far away from getting there.
About market mechanism...read up Taylor's rule. You'll get a kick
bladerunner
Banned Idiot
The West should remain deaf when the result of such policies comes back to bite her on the buttocks.
Meanwhile
"......Companies that continue making their products outside the country must contend with tighter supplies and much higher prices for the materials because of steep taxes and other export controls imposed by China over the last two years.
Companies like Showa Denko and Santoku of Japan and Intematix of the United States are adding factory capacity in China this year instead of elsewhere because they need access to the scarce metals, known as rare earths.
“We saw the writing on the wall — we simply bought the equipment and ramped up in China to begin with,” said Mike Pugh, director of worldwide operations for Intematix, who said the company would have preferred to build its new factory near its Fremont, Calif., headquarters.
While seemingly obscure, China’s policy on rare earths appears to be directed by Prime Minister Wen Jiabao himself, according to Chinese officials and documents. Mr. Wen, a geologist who studied rare earths at graduate school in Beijing in the 1960s, has led at least two in-depth reviews of rare earths this year at the State Council, China’s cabinet. During a visit to Europe last autumn, he said that little happened on rare earth policy without him.
China’s tactics on rare earths probably violate global trade rules, according to governments and business groups around the world.
A panel of the World Trade Organization, the main arbiter of international trade disputes, found last month that China had broken the rules when it used virtually identical tactics to restrict access to other important industrial minerals. China’s commerce ministry announced on Wednesday that it would appeal the ruling.
No formal case has yet been brought concerning rare earths because officials from affected countries are waiting to see the final resolution of the other case, which has already lasted more than two years.
Karel De Gucht, the European Union’s trade commissioner, cited the industrial minerals decision in declaring last month that, “in the light of this result, China should ensure free and fair access to rare earth supplies.”
Shen Danyang, a spokesman for the commerce ministry, reiterated at a news conference on Wednesday in Beijing that China believed that its mineral export policies complied with W.T.O. rules. China’s legal position, outlined in W.T.O. filings, is that its policies qualify for an exception to international trade rules that allows countries to limit exports for environmental protection and to conserve scarce supplies.
But the W.T.O. panel has already rejected this argument for the other industrial minerals, on the grounds that China was only curbing exports and not limiting supplies available for use inside the country. ........."
Engineer
Major
And how does this statement dispute that China is justified in exercising its rights over its own resources? It doesn't. So your point being? And now that you've mentioned it, one can look at this as China remaing deaf when Western policies come biting the West in the buttocks. After all, the West seems to think its perfectly okay to remain deaf to China to begin with, so really China is just returning the favour.
So? China doesn't want to sell anymore, at least not dirt cheap; isn't that plain clear from the beginning? The West knows this as well, and for quite a while too, but the West prefers to sit on rare earth resources and goes after China's instead. So, the West has just as much fault in restricting important industrial minerals. Even if WTO rules against China, so what? Those rulings would at most give those other countries rights to retiliate in other area thus leverage, but what those countries after is China's rare earth at next-to-nothing price which they aren't going to get because China still won't going to sell.
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Engineer
Major
I was programming all day (yuck) and couldn't think straight. But yeah, I meant to say argument.
Then I don't think we are actually discussing about the samething as you think we do.
bladerunner
Banned Idiot
The US became the world's largest industrial producer around 1890. The US dollar became the world's premiere reserve currency in 1945 at the Bretton Woods conference. Before that time Sterling was the reserve currency within the British Commonwealth, but countries kept currency reserves mainly of their trading partners. The main central bank reserves were gold and, in some countries, silver. Silver was also the metal of the main coins.It'll take a lot more than a bit of liquidity to make a reserve currency. It's moving in the right direction, but it's far away from getting there.
About market mechanism...read up Taylor's rule. You'll get a kick
China became the largest industrial producer in the world in about 2010. So if RMB becomes the main reserve currency before 2065 it will have been faster than the US dollar.
The Taylor rule was abandoned so that countries could subsidize their banks. US banks borrow from the Fed at 0.25 % in order to buy Treasuries yielding 2 %.
One of the problems is many nations buy rare earth to stockpile them, this curbs such practice so you buy only what you use.
In4ser
Junior Member
It's retarded, if the West has a problem with China's practices, they can do it themselves. They have plenty of it in Canada, USA and etc. Despite being called "rare" earth metals they're not that rare just costly and damaging to harvest. They got the technology, knowledge and labor they're just "civilized" to get their hands dirty and would impinge their interests and impose their so called "Free Trade".
Obviously International Laws don't apply to the West, only when they cannot spin it. According to the WTO you are breaking the Law for refusing to sell your own property if the WEST wants it, but if China wants access to certain markets in Telecom in USA or buy 'critical' technologies in aerospace, computers, technology and military, thats OKAY!
Obviously International Laws don't apply to the West, only when they cannot spin it. According to the WTO you are breaking the Law for refusing to sell your own property if the WEST wants it, but if China wants access to certain markets in Telecom in USA or buy 'critical' technologies in aerospace, computers, technology and military, thats OKAY!
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I point here to two articles in The Daily Telegraph:
Ambrose Evans-Pritchard on the position of China:
AEP writes near the end of his article: "My impression from China's "Summer Davos" in Dalian is that Beijing's elite is less deluded about the risks than Europe's leaders were for so long."
I found his name also as an investigator of the Tungsten-Gold story, when he was correspondent of the Telegraph in Washington.
And a comment by Jeremy Warner on the role of central banks:
Ambrose Evans-Pritchard on the position of China:
AEP writes near the end of his article: "My impression from China's "Summer Davos" in Dalian is that Beijing's elite is less deluded about the risks than Europe's leaders were for so long."
I found his name also as an investigator of the Tungsten-Gold story, when he was correspondent of the Telegraph in Washington.
And a comment by Jeremy Warner on the role of central banks:
If I'm not mistaken, the NYT article has been taken as another example of how the West tries to impose unfair standards onto China. I simply came into this discussion to posit an alternative interpretation. In my opinion for this to be an instance of the West imposing unfair standards, there would need to be a lot more than businesses complaining about increased input costs and the US and Europe complaining about price barriers. Those are typical of any country, China included. Countries complain about each other's trade practices all the time.