Screw western analyst, even the government official is saying they need to boost consumption, and even Xi said that when he proposed dual circulation. I don't know why people think western analyst matters. We are talking about the opinion of Chinese government.
Chinese Economics Thread
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Chinese government wants to stabilize the housing, spur more investment, lower unemployment, increase consumption, and reorient the economy to dual circulation.
There is no question that the Chinese government is concerned about the economy and has taken actions to rejuvenate the economy. However, I disagree that the Chinese government is desperate enough to bring out the big guns.
As for a stronger Yuan, I don't think it is a good idea in the near term. Yuan could have been stronger during the 2020 and 2021. However, after the interest rates have increased so much in the US, a weaker Yuan is beneficial.
In a few months, when the Fed is almost done with raising interest rate, then Yuan can appreciate. China should focus on easing interest rate and reignite investment and spending through cheap borrowing costs.
If the Chinese government wanted a stronger yuan now, then it needed to burn through a lot of reserves in order to arrest the depreciation. A weaker yuan would bring the import costs lower but China is already having deflation which means lowering the imports would bring very little benefits. Using reserves to keep Yuan stronger would be wasteful and won't do much for the Chinese economy.
There is no question that the Chinese government is concerned about the economy and has taken actions to rejuvenate the economy. However, I disagree that the Chinese government is desperate enough to bring out the big guns.
As for a stronger Yuan, I don't think it is a good idea in the near term. Yuan could have been stronger during the 2020 and 2021. However, after the interest rates have increased so much in the US, a weaker Yuan is beneficial.
In a few months, when the Fed is almost done with raising interest rate, then Yuan can appreciate. China should focus on easing interest rate and reignite investment and spending through cheap borrowing costs.
If the Chinese government wanted a stronger yuan now, then it needed to burn through a lot of reserves in order to arrest the depreciation. A weaker yuan would bring the import costs lower but China is already having deflation which means lowering the imports would bring very little benefits. Using reserves to keep Yuan stronger would be wasteful and won't do much for the Chinese economy.
Bro major cost input is energy, you can ask Germany how their industries are coping. My argument as we're facing a major economic recession, having a low cost of living especially a developing economy is good. Here in the Philippine with high cost of food (as we import at least 50%), electricity and rent. People are force to spend on basic necessities which affect consumer spending especially on high value items. The saving grace is our OFW remittances, without them we may see revolution in the street.
And due to high food price, people here are forced to adopt to stay alive.
2.9M views4 months ago
Low-income earners can only eat chicken bones with bits of meat left. This kind of food from organic waste is called in Tagalog ...
Saying chicken bones is garbage is a bit stretching it I think. Chicken carcass with meat removed is a popular street food in north eastern Chinese provinces.
The example he gave is a slightly different case where the poorer are eating the literal food scraps/food waste of the better off.
Yes Sir, the tastiest part of all meat either chicken, pork or beef.
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Welcome to Shenyang! As they say, no chicken can leave the city of Shenyang alive, you'll see why... Follow me on Instagram ...
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Breaks my heart that people have to do that. And make no mistake, without the US preparing war against China, the Philippine people would've been a lot better off, because they would be major beneficiaries of China's own development. Instead, Filipinos are just going to starve and be used as cannon fodder for their American masters.
Nah, more fundamentally, the problem is that the Philippines is a capitalist country and that the ruling class/elite does little to help the poor.
Even if US wasn't prepping for war, the difference would still be small (although likely better).
This makes absolutely no sense. Why does china need to keep it's currency low when America is raising interest rates? The justification in the past is that weak yuan helps with export. But reality is that Chinese exports are already dirt cheap. Any export weakness is due to global demand and protectionism rather than lack of competitiveness.
Relying on the same old trick of keeping currency down to encourage export really doesn't apply here.
On the other hand, a stronger usd simply allows deep state to continue fund it's anti china agenda.
People all day want rmb to be internationalized and for usd to weaken. But then we get to this scenario and excuses are being made again.
Go back to beginning of this year on this thread and see how many people were excited about rmb appreciating.
Either you want a stable and strong rmb that other countries are willing to invest in or you don't.
Interest rate parity is essential for preventing arbitrage condition. Interest rates is much higher in the US at the moment and is still rising. On the other hand, interest rates is decreasing in China to spur growth.
Due to lack of interest rate parity between the US and China, hot money is flowing out of China and arbitrators are shorting Yuan to make some quick gains. If China allowed Yuan to remain artificial high, then there would be more money leaving China which means China would need to spend its reserves to keep Yuan stronger. Since weak Yuan doesn't affect China much, there is no reason for China to waste its reserves to keep Yuan strong.