bladerunner
Banned Idiot
Also China, most probably having to be t nett purchaser of carbon credits would be more inclined to take her time in participating
Chinese Economics Thread
- Thread starter Norfolk
- Start date
RedMercury
Junior Member
Why? If it is per capita, China will have plenty to spare 
bladerunner
Banned Idiot
At one time allocation was based on grandfathering, i don't know the specifics, or if its changed.Why? If it is per capita, China will have plenty to spare
But the point Im making is, the setting up of a stock market like exchange , with its trades, shorts n longs , all that sort of thing, and with some countries announcing that that were'nt likely to meet their targets, self imposed or otherwise, once again we could have alot of speculative money being made, arent we just creating another source of paper money. Hasn,t that type of behaviour contributed to our financial meltdown.
Last edited:
China and the U.S. Play Chicken: Currency Manipulation
Axel Merk, January 27, 2009
“China is manipulating its currency,” proclaims incoming Treasury Secretary Geithner. Talking about “manipulation” is helpful only if one’s intent is to impress a local and insult a foreign audience. More productive may be plain talk - the U.S. and China could issue a joint statement along the lines of: “China and the U.S. agree that both will act in their respective self-interest in setting exchange rate policy.”
Many factors including supply and demand for a currency ultimately determine exchange rates. The U.S. is doing its share to try to manipulate the dollar, albeit with mixed results. Amongst others, last summer, the Treasury decided to make the guarantee for the housing agencies Fannie and Freddie more explicit. With the Chinese and other foreigners being the main buyers of U.S. debt in recent years, there was a threat that these buyers would abstain. Foreign investment in the U.S. had fallen off a cliff in the second quarter of 2008; the absence of foreign buying could have caused a panic in the dollar. By providing the guarantees, the U.S. seemed the least risky country for short-term money, giving a boost to the dollar. Note, however, that the inflows were mostly parked in short-term Treasuries, not exactly an endorsement of the U.S. economy, but more likely a panic trade that may be unwound again.
While last summer’s action was aimed at avoiding a disorderly collapse of the dollar, policy makers have made it abundantly clear that they want a weaker dollar. The ritual that Geithner followed to state that a strong dollar is in the interest of the U.S. has become a farce. Suggesting China should allow its currency to appreciate is certainly not compatible with it. Neither are Federal Reserve (Fed) Chairman’s repeated references that weakening the currency by going off the gold standard helped the U.S. out of the Great Depression by “allowing prices to float to the pre 1929 levels.” In our assessment, the Fed is encouraging inflation, so that the relative prices of homes to all other goods and services will come down. That may be the Fed’s “plan B” as it doesn’t want absolute home prices to come down any further; a weaker dollar contributes to achieving this. We have cautioned in the past that a country cannot depreciate itself into prosperity, but that won’t stop policy makers from trying. Pulling interest rates to near zero is also a form of currency manipulation, trying to make the currency less attractive.
While former Fed Chairman Greenspan always avoided discussing the dollar, the current Fed Chairman embraces the confrontation, not just by seeking the discussion, but also through action. Beyond lowering interest rates, the Fed is trying to weaken the dollar with its purchases of agency securities and government bonds. With their government guarantees, Fannie and Freddie are buying billions worth of mortgage securities to lower the cost of borrowing to consumers; the agencies have also lowered their traditionally high standards on who qualifies for subsidized loans. Already Freddie Mac has asked Uncle Sam for another $35 billion as it is throwing taxpayer money at consumers. The activities pursued are in the realm of currency manipulation as the types of securities foreigners would typically want to buy are inflated in price, discouraging the purchases.
Indeed, any market where the Federal Reserve has engaged in purchases – agency securities, mortgage backed securities, providing funding for consumer loans, the commercial paper market, to name a few - the Fed is replacing rational buyers rather than jumpstarting the private sector. Why would a rational person buy securities that are artificially inflated in price? If the Chinese dare to buy these securities anyway, then they must be as guilty as the U.S. of currency manipulation.
Indeed, that’s what it comes down to: the U.S. wants to have a weaker dollar and China wants to be in control of when to allow the yuan to appreciate. Insulting China is not the right way to go about it. China has to recognize that a stronger yuan is in its national interest. While the U.S. is accelerating its market interventions with implications for the dollar, China is working hard to allow for more exchange rate flexibility.
In our view, China cannot grow itself out of the current global economic downturn with a cheap currency. U.S. consumer spending simply may not pick up fast enough because U.S. policies are aimed at propping up the broken system in place with high levels of consumer debt rather than fostering sustainable growth that includes savings and investments. Paradoxically, while the Chinese yuan may be cheap, overall policies continue to be relatively tight. China is aware that it has its own inflated property prices and is willing to allow price declines and failures of real estate developers. China has also not exhausted its potential to provide a stimulus to the economy: infrastructure projects in the pipeline in years to come could be moved forward far more aggressively. We would favor a major campaign to encourage domestic entrepreneurialism to jump-start a more balanced economy not as focused on exports. Part of the reason for the reluctance on China’s part is because of inflationary fears. While everyone talks about deflation right now, inflationary pressures as the world recovers and as a result of the spending programs could be contained if China allowed the yuan to appreciate.
When China recognizes that it is in its interest to have a stronger yuan, China will act. In the meantime, the U.S. and China are playing a game of chicken. However, it is unclear what winning means in this context. The U.S. seems somehow excited to weaken its currency, depriving hundreds of millions of the purchasing power of their savings. Conversely, China’s reluctance leads to more problems than it solves for China. China won’t be bullied by the U.S.; however, a little more diplomacy and a little less populism may be beneficial to both China and the global economy.
We manage the Merk Hard and Asian Currency Funds, no-load mutual funds seeking to protect against a decline in the dollar by investing in baskets of hard and Asian currencies, respectively. To learn more about the Funds, or to subscribe to our free newsletter, please visit .
Axel Merk
Manager of the Merk Hard and Asian Currency Funds,
Rising China
Junior Member
:china::china::china:
DAVOS: China Econ Growth Engine Still Strong - Business Executive
Wed, Jan 28 2009, 18:11 GMT
DAVOS: China Econ Growth Engine Still Strong - Business Executive
DAVOS, Switzerland -(Dow Jones)- The engine of growth behind China's economy remains strong despite the financial crisis, and there's still plenty of room for it to grow, a senior Chinese business executive said Wednesday.
Speaking with Dow Jones Newswires at the World Economic Forum, Wang Jianlin, chairman of the Dalian Wanda Group, a commercial real estate company, said he expected his company profits to continue to grow at a rapid rate.
"There's a fundamental difference between China's economy and those of Europe and the U.S.," said Wang, who is a standing member of the National Committee of the Chinese People's Political Consultative Conference.
"The engine that powers China's economy is still working and is very strong," Wang said.
There are three reasons that give him confidence: firstly, China's urbanization rate is still very low - just 30%; secondly, Chinese consumption constitutes only 35% of total gross domestic product, so there's a lot of room for it to grow; and finally, China's population is still increasing fast, he said.
"Of course, due to the financial crisis, the growth of China's GDP may slow to around 5% to 8% from around 11%, but it is still expanding very quickly," Wang said.
He added that he expected both profits and sales at his company to be up around 50% in 2009 from the previous year, despite a slight slowdown.
"The financial crisis poses little impact on the real economy in China," he said.
Summit Web site:
-By Natasha Brereton, Dow Jones Newswires; +44 20 7842 9254; [email protected]
DAVOS: China Econ Growth Engine Still Strong - Business Executive
Wed, Jan 28 2009, 18:11 GMT
DAVOS: China Econ Growth Engine Still Strong - Business Executive
DAVOS, Switzerland -(Dow Jones)- The engine of growth behind China's economy remains strong despite the financial crisis, and there's still plenty of room for it to grow, a senior Chinese business executive said Wednesday.
Speaking with Dow Jones Newswires at the World Economic Forum, Wang Jianlin, chairman of the Dalian Wanda Group, a commercial real estate company, said he expected his company profits to continue to grow at a rapid rate.
"There's a fundamental difference between China's economy and those of Europe and the U.S.," said Wang, who is a standing member of the National Committee of the Chinese People's Political Consultative Conference.
"The engine that powers China's economy is still working and is very strong," Wang said.
There are three reasons that give him confidence: firstly, China's urbanization rate is still very low - just 30%; secondly, Chinese consumption constitutes only 35% of total gross domestic product, so there's a lot of room for it to grow; and finally, China's population is still increasing fast, he said.
"Of course, due to the financial crisis, the growth of China's GDP may slow to around 5% to 8% from around 11%, but it is still expanding very quickly," Wang said.
He added that he expected both profits and sales at his company to be up around 50% in 2009 from the previous year, despite a slight slowdown.
"The financial crisis poses little impact on the real economy in China," he said.
Summit Web site:
-By Natasha Brereton, Dow Jones Newswires; +44 20 7842 9254; [email protected]
antimatter
Banned Idiot
Extending the economic SAR model to minimize currency issue.
Currently there are 2 SARs, HK and Macau, each one has its own currencies and local administrative has it own policies.
How about extending that to other parts of CHina. Under this new model, a number of new economic SARs will be created. The Pearl River SAR, the Yangtze River SAR, The Behai Region SAR and Baohai Region SAR.
Each SAR will issue its own currency. Yes, it will create somewhat of confusion because of too many currencies, but the benefit of that would be very hard for the west to point finger at currency manipulation.
So by diluting it.
So in one senario would be, the central Yuan and Yangtze SAR currency would peg to US dollar but the Pearl River SAR & Baohai would free float its currency in greater range.
This way, mix up the approaches therefore harder for western forces to pin point .
It's kind of like spread out and not putting all eggs into one basket.
The central Yuan would be used in other parts of China. In fact it even has room to devalute back to 8 yuans to 1 dolllar because the Yangtze, pearl river and boahai rich regions have taken out of the equation.
I think right now, one single centralized yuan would create too big a target for the western forces.
Politically all regions still used the guidelines from Beijing, but this creative SAR model with its own currencies would able bypass the western 's targetting.
Also all SARs will be paying Taxes to Central Government, yes that's including HK and Macau, right now those 2 are getting a free ride, they are not paying their taxes and dues to the country
Currently there are 2 SARs, HK and Macau, each one has its own currencies and local administrative has it own policies.
How about extending that to other parts of CHina. Under this new model, a number of new economic SARs will be created. The Pearl River SAR, the Yangtze River SAR, The Behai Region SAR and Baohai Region SAR.
Each SAR will issue its own currency. Yes, it will create somewhat of confusion because of too many currencies, but the benefit of that would be very hard for the west to point finger at currency manipulation.
So by diluting it.
So in one senario would be, the central Yuan and Yangtze SAR currency would peg to US dollar but the Pearl River SAR & Baohai would free float its currency in greater range.
This way, mix up the approaches therefore harder for western forces to pin point .
It's kind of like spread out and not putting all eggs into one basket.
The central Yuan would be used in other parts of China. In fact it even has room to devalute back to 8 yuans to 1 dolllar because the Yangtze, pearl river and boahai rich regions have taken out of the equation.
I think right now, one single centralized yuan would create too big a target for the western forces.
Politically all regions still used the guidelines from Beijing, but this creative SAR model with its own currencies would able bypass the western 's targetting.
Also all SARs will be paying Taxes to Central Government, yes that's including HK and Macau, right now those 2 are getting a free ride, they are not paying their taxes and dues to the country
bladerunner
Banned Idiot
I Dont think the China hosing market had the same problems as in the West, therefore I would expect it to maintain steady sales
antimatter
Banned Idiot
Re: Extending the economic SAR model to minimize currency issue.
I think multiple currencies in China is better because of the huge gap between the rich coastal regions and inland provinces.
Right it's 6.8 Yuan for 1 USd, but if the central yuan is used for inner provinces only then it can immediately devalue back to 8 yuan for 1 USD.
Currencies for coastal regions can appreciate more.
I think this arrangement of currency would be more reflective of the current economies of different regions.
I think multiple currencies in China is better because of the huge gap between the rich coastal regions and inland provinces.
Right it's 6.8 Yuan for 1 USd, but if the central yuan is used for inner provinces only then it can immediately devalue back to 8 yuan for 1 USD.
Currencies for coastal regions can appreciate more.
I think this arrangement of currency would be more reflective of the current economies of different regions.