ravenshield936
Banned Idiot
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How Many Officials Can You Fit In a Single Summit?
- Thread starter Martian
- Start date
Martian
Senior Member
China Displays Sophistication on Euro-Zone Debt
"The Wall Street Journal | Asia
*MAY 27, 2010, 5:53 P.M. ET
China Displays Sophistication on Euro-Zone Debt
By EDUARDO KAPLAN and ROBERT FLINT
NEW YORK—China gave a fresh display this week not only of its economic and political muscle, but the skill and sophistication with which it now wields its new-found clout.
The carefully watched summit between the U.S. and China that ended Tuesday may have disappointed expectations for a revaluation of the yuan, but it gave clear evidence of China's confidence and ability to assume a leading role in sorting out more pressing issues.
The currency-related discussions at the Strategic and Economic Dialogue in Beijing publicly focused on the party's absent guest--the euro zone and its sovereign debt crisis. This time around, financial markets weren't obsessed with the yuan's exchange rate--investors were too busy trying to understand if China would turn its back on the euro.
First came comments Monday from Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission, who told reporters that neither side raised the yuan issue, but they discussed the euro's exchange rate in connection with Europe's debt crisis.
And when the common currency on Wednesday dropped within a few pips of a fresh four-year low against the greenback on unconfirmed reports that China may review its euro-denominated holdings in light of the euro's 15% decline this year, China came to the rescue. The euro recovered, along with the rest of the markets, as soon as China's foreign-exchange regulator denied the report.
In an unusual move, China's State Administration of Foreign Exchange clarified Thursday that Europe will remain one of the key investment markets for China's foreign-exchange reserves of nearly $2.5 trillion, the world's biggest, despite the euro-zone debt crisis.
Perhaps most important, the statement from SAFE expressed confidence "the euro zone will be able to overcome its difficulties."
The relief was as evident as the realization that China may be opting for a new method of communication, one that relies on a trickle of subtle gestures instead of blunt pronouncements. Having the largest pile of reserves in its coffers while most of the industrialized nations struggle with mounting debt burdens gives China an advantage as well as a captive audience. The intimation, however remote, that it may dump a currency can immediately weigh on investors' sentiment around the globe.
This isn't the first time that talk of China's intentions moved markets, but with investors already on edge trying to work out if the problems in Europe will spoil an incipient economic recovery, a seemingly minor gesture can be easily magnified into a selling rout.
But the performance of Chinese officials this week indicates such clumsiness could be a thing of the past.
"China's overwhelming strategic interests strongly favors mutually reinforcing real economic and financial stability, and any official comments are going to err heavily in support of these interests," said Alan Ruskin, global head of currency strategy at RBS securities in Stamford, Conn.
China's handling of the bilateral summit--especially its position on the euro-zone crisis--indicates it's advanced far beyond the apprentice stage to take its place at the loftiest levels of world politics. In style and substance, China is demonstrating an increasingly refined approach that reassures, rather than roils, markets. No longer shy students content to watch from the sidelines, China's have become full-fledged masters in the global arena.
Write to Eduardo Kaplan at [email protected] and Robert Flint at [email protected]"
"The Wall Street Journal | Asia
*MAY 27, 2010, 5:53 P.M. ET
China Displays Sophistication on Euro-Zone Debt
By EDUARDO KAPLAN and ROBERT FLINT
NEW YORK—China gave a fresh display this week not only of its economic and political muscle, but the skill and sophistication with which it now wields its new-found clout.
The carefully watched summit between the U.S. and China that ended Tuesday may have disappointed expectations for a revaluation of the yuan, but it gave clear evidence of China's confidence and ability to assume a leading role in sorting out more pressing issues.
The currency-related discussions at the Strategic and Economic Dialogue in Beijing publicly focused on the party's absent guest--the euro zone and its sovereign debt crisis. This time around, financial markets weren't obsessed with the yuan's exchange rate--investors were too busy trying to understand if China would turn its back on the euro.
First came comments Monday from Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission, who told reporters that neither side raised the yuan issue, but they discussed the euro's exchange rate in connection with Europe's debt crisis.
And when the common currency on Wednesday dropped within a few pips of a fresh four-year low against the greenback on unconfirmed reports that China may review its euro-denominated holdings in light of the euro's 15% decline this year, China came to the rescue. The euro recovered, along with the rest of the markets, as soon as China's foreign-exchange regulator denied the report.
In an unusual move, China's State Administration of Foreign Exchange clarified Thursday that Europe will remain one of the key investment markets for China's foreign-exchange reserves of nearly $2.5 trillion, the world's biggest, despite the euro-zone debt crisis.
Perhaps most important, the statement from SAFE expressed confidence "the euro zone will be able to overcome its difficulties."
The relief was as evident as the realization that China may be opting for a new method of communication, one that relies on a trickle of subtle gestures instead of blunt pronouncements. Having the largest pile of reserves in its coffers while most of the industrialized nations struggle with mounting debt burdens gives China an advantage as well as a captive audience. The intimation, however remote, that it may dump a currency can immediately weigh on investors' sentiment around the globe.
This isn't the first time that talk of China's intentions moved markets, but with investors already on edge trying to work out if the problems in Europe will spoil an incipient economic recovery, a seemingly minor gesture can be easily magnified into a selling rout.
But the performance of Chinese officials this week indicates such clumsiness could be a thing of the past.
"China's overwhelming strategic interests strongly favors mutually reinforcing real economic and financial stability, and any official comments are going to err heavily in support of these interests," said Alan Ruskin, global head of currency strategy at RBS securities in Stamford, Conn.
China's handling of the bilateral summit--especially its position on the euro-zone crisis--indicates it's advanced far beyond the apprentice stage to take its place at the loftiest levels of world politics. In style and substance, China is demonstrating an increasingly refined approach that reassures, rather than roils, markets. No longer shy students content to watch from the sidelines, China's have become full-fledged masters in the global arena.
Write to Eduardo Kaplan at [email protected] and Robert Flint at [email protected]"
vesicles
Colonel
Re: China Displays Sophistication on Euro-Zone Debt
If only they take some time and study a little Chinese history and read a few ancient Chinese novels, like the 3 Kingdoms, they'll know that Chinese have been playing this kind of political games for a long long long long long time...
If only they take some time and study a little Chinese history and read a few ancient Chinese novels, like the 3 Kingdoms, they'll know that Chinese have been playing this kind of political games for a long long long long long time...
bladerunner
Banned Idiot
Back in those days wealth/ status was measured in much more simply and concrete terms, Gold Camels horses Slaves and Women.
Martian
Senior Member
China's Market Economy Status
Realistically speaking, I don't think the U.S. will soon grant Market Economy Status (i.e. MES) to China. The U.S. uses "artificial" calculations and discriminates against Chinese companies in protectionist anti-dumping cases.
However, "China can automatically acquire the [MES] status by 2016." "According to WTO rules, China will acquire MES 15 years after entering the organization. China joined the WTO in 2001, which means it would get that status by 2016 at the latest."
"U.S. to recognize China MES
English.news.cn 2010-05-27 10:26:13
BEIJING, May 27 -- The United States has agreed to recognize China's market economy status (MES) as soon as possible, according to a statement from the Chinese side on Tuesday upon the conclusion of the second round of the China-US Strategic and Economic Dialogue (S&ED).
According to the statement, "the US will recognize China's MES promptly via the cooperative forum of the Sino-US Joint Commission on Commerce and Trade".
"The wording means there has been no breakthrough at all regarding the recognition of China's MES," said He Weiwen, an executive council member of the China Society for WTO Studies.
The US just repeated the wording it used in the first round of the S&ED in Washington and at an ensuing meeting last year, he said.
China's Commerce Minister Chen Deming said on Monday that the US is yet to recognize China's MES and the two sides would continue discussions on this issue at upcoming meetings.
"The later the US formally accepts China's MES, the less valuable the 'prompt recognition' commitment will be, as China can automatically acquire the status by 2016," said Song Hong, an economist of international trade department under the Chinese Academy of Social Sciences.
According to WTO rules, China will acquire MES 15 years after entering the organization. China joined the WTO in 2001, which means it would get that status by 2016 at the latest.
"But at least this shows the US is moving in the right direction", Song said, since the US nevertheless said it will, regarding trade remedy investigations, carefully consider and offer fair and reasonable treatment to Chinese companies that apply for market-oriented industry status, according to the statement.
"Fair and reasonable" treatment in trade remedy investigations should improve the situation of domestic companies exporting to the US. They now have to make a great effort to prove that they belong to market-oriented industries, Song said.
Due to China's failure to achieve MES, Chinese products are calculated based on the market prices of a substitute country - often with much higher production costs than China - as the benchmark instead of its real costs, making Chinese companies vulnerable to anti-dumping and anti-subsidy investigations.
"The US won't easily accept China's MES; instead, it will be used as a bargaining chip with China on other matters," said He Weiwen. For example, the US has been consistently calling for the full opening up of China's financial market to facilitate US financial giants' entry to the world's largest market.
And even after the US recognizes China's MES by 2016, trade remedies against Chinese products will not stop, they will continue or emerge in other forms, said Zhang Yansheng, director of the Institute of Foreign Trade of the National Development and Reform Commission.
(Source: China Daily)"
Realistically speaking, I don't think the U.S. will soon grant Market Economy Status (i.e. MES) to China. The U.S. uses "artificial" calculations and discriminates against Chinese companies in protectionist anti-dumping cases.
However, "China can automatically acquire the [MES] status by 2016." "According to WTO rules, China will acquire MES 15 years after entering the organization. China joined the WTO in 2001, which means it would get that status by 2016 at the latest."
"U.S. to recognize China MES
English.news.cn 2010-05-27 10:26:13
BEIJING, May 27 -- The United States has agreed to recognize China's market economy status (MES) as soon as possible, according to a statement from the Chinese side on Tuesday upon the conclusion of the second round of the China-US Strategic and Economic Dialogue (S&ED).
According to the statement, "the US will recognize China's MES promptly via the cooperative forum of the Sino-US Joint Commission on Commerce and Trade".
"The wording means there has been no breakthrough at all regarding the recognition of China's MES," said He Weiwen, an executive council member of the China Society for WTO Studies.
The US just repeated the wording it used in the first round of the S&ED in Washington and at an ensuing meeting last year, he said.
China's Commerce Minister Chen Deming said on Monday that the US is yet to recognize China's MES and the two sides would continue discussions on this issue at upcoming meetings.
"The later the US formally accepts China's MES, the less valuable the 'prompt recognition' commitment will be, as China can automatically acquire the status by 2016," said Song Hong, an economist of international trade department under the Chinese Academy of Social Sciences.
According to WTO rules, China will acquire MES 15 years after entering the organization. China joined the WTO in 2001, which means it would get that status by 2016 at the latest.
"But at least this shows the US is moving in the right direction", Song said, since the US nevertheless said it will, regarding trade remedy investigations, carefully consider and offer fair and reasonable treatment to Chinese companies that apply for market-oriented industry status, according to the statement.
"Fair and reasonable" treatment in trade remedy investigations should improve the situation of domestic companies exporting to the US. They now have to make a great effort to prove that they belong to market-oriented industries, Song said.
Due to China's failure to achieve MES, Chinese products are calculated based on the market prices of a substitute country - often with much higher production costs than China - as the benchmark instead of its real costs, making Chinese companies vulnerable to anti-dumping and anti-subsidy investigations.
"The US won't easily accept China's MES; instead, it will be used as a bargaining chip with China on other matters," said He Weiwen. For example, the US has been consistently calling for the full opening up of China's financial market to facilitate US financial giants' entry to the world's largest market.
And even after the US recognizes China's MES by 2016, trade remedies against Chinese products will not stop, they will continue or emerge in other forms, said Zhang Yansheng, director of the Institute of Foreign Trade of the National Development and Reform Commission.
(Source: China Daily)"