"The China Price" - The best business article I have seen in years.

When you're a 5000 year old superpower, you can afford a couple of bad centuries and still come ahead...

 

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March 2, 2007

SouthAmerica: I just received an email from the editor of Brazzil Magazine saying that he just published my latest article at the following web address:

“Here Is Why Brazil Should Adopt the New Asian Currency.”
By: Ricardo C. Amaral
Friday, 02 March 2007

http://www.brazzil.com/content/view/9821/80/


Some people have already added their comments at the end of that article.

That article will be of interest to most Chinese people from around the world, since the article mention not only China, but also the Overseas Chinese Global Network.

I hope most people will enjoy reading that article and learn something new that they were not aware of.


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“Trade with China creates more jobs in Brazil”
Published: 2007/05/26
Mathaba.net - UK


RIO DE JANEIRO, May 25 (Xinhua) -- There were more jobs created in Brazil in 2005 as a result of exports to China than there were positions lost because of imports from the Asian giant, a Brazilian economist said Friday.

According to a study by Marta Reis Castilho of the Federal Fluminense University, 559,598 jobs were created as a result of trade with China, while 237,455 positions were lost, which means a surplus of 322,143 to Brazil.

The research also showed that the job surplus peaked at 379,000in 2003.

Of the jobs that bilateral trade created in Brazil in 2005, approximately 396,000, or 71 percent, went to workers with basic education levels or less, as the major exports to China were agricultural products and iron ore.


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July 20, 2007

SouthAmerica: Quoting from this article: “In recent months, the U.S., Japan and Mexico have filed or joined complaints with the World Trade Organization that accused China of illegally subsidizing exporters.”

I wonder what these countries mean by “illegally subsidizing”.

What is the difference of China’s government subsidies and the subsidies Japan’s government gives to their farmers or the massive subsidies that the US government also gives to their farmers?

What makes one type of government subsidy legal, and the other type illegal?

I guess from the perspective of thousands and thousands of Mexican farmers who went out of business as a direct result of NAFTA and because of US government agricultural subsidies in the United States to US farmers – is it possible that the US government subsidies to US farmers could be considered also illegal on the global markets?




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“China to join top 3 economies” - The Asian giant is poised to overtake Germany this year as its growth soars. But challenges await.
By Don Lee, Times Staff Writer
Los Angeles Times – July 19, 2007 - 10:36 PM PDT

SHANGHAI -- China's economy grew at an extraordinary rate of 11.9% in the second quarter, the fastest clip in more than 12 years and a pace that puts the nation on track to overtake Germany this year as the world's third-largest economy.

For the last 35 years, the United States, Japan and Germany have ranked 1-2-3 in gross domestic product, but as growth in those mature economies has slowed, China's has accelerated, powered by foreign investments and trade amid a global shift in production activity to the Far East.

Just 12 years ago, China's economy ranked No. 8, behind Brazil's, and was less than one-third the size of Germany's.

But figures released in a report by China's government Thursday show increasing challenges ahead for Beijing: surging inflation, breakneck investments in factories and a dramatic jump in exports that is stoking tensions between China and its major trading partners, particularly the United States.

For the first half of the year, China's trade surplus with the rest of the world reached $115 billion, up 85% from a year ago.

In recent months, the U.S., Japan and Mexico have filed or joined complaints with the World Trade Organization that accused China of illegally subsidizing exporters.

Washington has also taken China to the WTO over piracy issues, and members of Congress are threatening to impose hefty tariffs on Chinese imports if Beijing doesn't change its currency policy, which some believe gives China an unfair advantage in global markets.

While China's economic transformation has lifted millions out of poverty, its 1.3 billion people have a long way to go before their standard of living catches up with those of the other top economies.

The government's intense focus on economic growth has led to environmental degradation and violent clashes as farmland is appropriated for development.

Shoddy manufacturing and tainted food products from China have recently damaged its reputation worldwide.

Ordinary Chinese were incredulous at the notion that China's economy, by any measure, could surpass Germany's.

"It's impossible," said a 42-year-old Shanghai merchant named Wang. "There is no way that China can compare with Germany. For example, I have an electric shaver my friend bought for me from Germany, and I have been using it for many years and it is still working well. But for domestic ones, no matter how many I buy, each one breaks soon."

Analysts said the latest statistics signaled an overheating Chinese economy that would probably prompt the government to raise interest rates and take other measures to slow growth. But rate hikes in the past and other top-down controls have had little effect.

In the second quarter, China's gross domestic product, or total value of goods and services generated, expanded by 11.9% from a year earlier, far higher than expectations and ahead of the 11.1% increase for all of last year.

By China's calculations, its GDP in 2006 was about $2.7 trillion. Germany's was $2.9 trillion, based on International Monetary Fund data, but its economy, like those of the U.S. and Japan, has been growing at a fraction of the rate China's has. The U.S. remains far ahead of the rest of the world in GDP, with $13.2 trillion in 2006.

Chinese leaders often have said they want more balanced and sustainable growth.

But at the local level, many officials seem to strive for the highest numbers they can achieve, seeing them as a key basis for their job evaluation and promotion. So they approve new plants and projects, sometimes indiscriminately, in an effort to boost tax dollars, employment and overall growth figures.

Through June of this year, investments in factories, roads and other real estate projects climbed by 26% from a year earlier. The new construction is soaking up more energy and adding to the pollution that is filling China's air and waters, and sometimes spreading beyond its borders.

In a report released this week, the Organization for Economic Cooperation and Development said Beijing had been ineffective in countering the negative effects of its rapid economic development and industrialization.

China's "air pollution levels in some cities are among the worst in the world, one-third of water courses are severely polluted, and illnesses and injuries are associated with poor environmental and occupational conditions," the report said, adding that China was poised to overtake the U.S. as the top emitter of greenhouse gases.

Rising inflation is another worry. Consumer prices jumped by 4.4% in June from a year earlier after moderate increases of about 2% last year.

Food prices have soared, largely a result of higher grain costs, a shortage of pork in the wake of a disease outbreak on pig farms, and greater demand by consumers for meat. Government statistics showed meat and poultry prices in June were up 20% from a year ago, and egg prices were 28% higher.

In the last two decades, economists said, almost every inflationary crisis began with food price hikes. And it is starting to pinch consumers.

"It's not like food prices suddenly rose, but little by little," said Qu Xilin, 25, a newspaper vendor in Shanghai who said he earned almost $400 a month but spent less than $1.25 a day on meals. "But what can I do? I have to eat every day."

It isn't just food. The cost of textiles, home appliances and services such as education and medical care are moving a bit too fast as well, said Zhu Baoliang, chief economist for the State Information Center Economy Forecast Department, a government-affiliated group.

"There is excessive demand ... we should be wary of such a trend," he said.

Beijing has taken steps to keep inflation in check, discouraging certain investments and bank-lending through a variety of measures. The government this month cut or abolished a variety of rebates for exporters.

The United States, China's largest trading partner, reported a $232.5-billion trade deficit with China in 2006, and this year's figure was expected to be higher.

That has led to sharp calls from some American business groups and politicians to step up pressure on China to revalue its currency, the yuan, which it allows to trade only in a narrow range. The yuan has risen about 7.5% against the dollar in the last two years, but critics say it is undervalued by as much as 30%, giving Chinese exporters an advantage in global markets.

Beijing has insisted on maintaining its currency strategy, not wanting to jolt exporters and risk the loss of jobs and rising incomes.

Despite China's overall size and growing clout in the global economy, Chinese officials and scholars say the country is still developing and grappling with critical issues of lifting millions out of poverty and reducing the widening income gap between the city and countryside, where most Chinese live.

The figures released Thursday showed retail sales in the first half of the year jumped by 15% from a year earlier. Average incomes after taxes also rose briskly during the period. For the first six months, average disposable income for urban dwellers rose 14% to $921. For rural residents, it rose 13% to about $276, the government said.

"Being the world's third-largest is not that significant," said economist Zhu. "It's the quality of life."



Source: http://www.latimes.com/business/la-fi-chinaecon20jul20,1,4480672.story?coll=la-headlines-business


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August 14, 2007

SouthAmerica: Research shows that Americans are worried that China’s growing influence in Latin America is reducing the US influence in that area of the world.



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“Para americanos, China ameaça influência dos EUA, diz pesquisa”
DAYANNE MIKEVIS – colunista da Folha de Sao Paulo
A Folha de Sao Paulo – 14 de Agosto de 2007

Entrevista do Instituto Zogby mostra que mais da metade dos Estados Unidos (56%) vê como negativo o aumento da presença da China na América Latina, além de avaliar essa situação como uma ameaça à influência dos EUA sobre países latino-americanos.

A pesquisa também mostra que, apesar de os americanos acharem temerária essa situação, eles conhecem pouco sobre a América Latina: apenas 10% dos entrevistados disseram saber quem é o presidente do Brasil.

Os dados, publicados na última sexta-feira (10), são de uma pesquisa feita pela internet com 7.362 adultos, entre os dias 27 e 30 de julho. A margem de erro é de 1,2 pontos percentuais, para cima ou para baixo.

Em relação à China, 48% dos entrevistados que se consideram politicamente liberais disseram que o envolvimento do país asiático na América Latina representa uma séria ameaça aos EUA. Entre os conservadores, esse percentual subiu para 76%. Apenas 10% dos entrevistados, do grupo geral, disseram que a China é uma ameaça pequena ou inexistente ao papel americano na América Latina.

América Latina

Lula é menos conhecido para os americanos que o presidente do México, Felipe Calderón, que, apesar da proximidade geográfica dos dois países, foi reconhecido por apenas 20% dos entrevistados.

A pesquisa também perguntou quais países da América Latina são os maiores aliados dos EUA. O México foi colocado em primeiro lugar, com o Brasil em segundo. A Costa Rica ocupou a terceira posição.

Os países vistos como menos amigáveis aos americanos são Venezuela, Cuba e, surpreendentemente, Colômbia --que é uma aliada próxima de Washington.

A pesquisa também aponta que 58% dos americanos pensam que os EUA devem abrir negociações com Raúl Castro --irmão de Fidel, que ocupa a Presidência interinamente desde que o ditador cubano se afastou da chefia do país por motivo de doença. Outros 56% disseram que os EUA devem retirar restrições de viagem para Cuba e pôr fim ao embargo econômico contra a ilha.

A maioria dos americanos (60%) reprova a política do presidente dos EUA, George W. Bush, em relação à América Latina, e 55% vêem ganhos para a economia com o trabalho dos imigrantes latino-americanos.

Interpretação

"A pesquisa sugere que os americanos estão mal informados sobre a região", disse Peter Hakim, presidente do instituto Inter-American Dialogue. "A maioria acredita que o Brasil e o México são os melhores amigos dos EUA na região, mas a maioria não pode identificar os presidentes destes países e identificam a Colômbia erroneamente como um adversário", disse Hakim.

"Enquanto os americanos estão familiarizados com dois dos adversários dos EUA na América Latina, como Cuba e Venezuela, eles não sabem muito sobre seus amigos", acrescentou.

A Colômbia é o país que mais recebe ajuda internacional dos EUA devido ao plano Colômbia.

Segundo Hakim, a pesquisa sobre a China sugere um grande diferença entre a percepção pública americana e a realidade. "Dentre os assuntos que são significativos para as relações entre os EUA-América Latina e para a vitalidade econômica da região, eu diria que a China, como uma ameaça aos EUA, não está no topo da lista", afirmou Hakim.

Para ele, o envolvimento da China com a América Latina, apesar de crescente, simplesmente não pode ser comparado às relações de longa data nas áreas comercial, política e social da região com os EUA e a Europa.

Source: http://www1.folha.uol.com.br/folha/mundo/ult94u319735.shtml



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August 10, 2007
Zogby: “Majority of Americans Understand Little about Latin American Neighbors”

56% of American adults believe China threatens U.S. influence in Central and South America. As the U.S. struggles with a sagging public image in many Latin American countries, American adults show a stunning ignorance about the region, a new Zogby Interactive poll shows.

Only 10% of online poll respondents said they were familiar with Luiz Inacio Lula da Silva, the second-term president of Brazil, South America’s largest country. And just 20% were familiar with Felipe Calderon, the President of Mexico, who was elected last summer in an extremely close race that captured global headlines.

The Zogby Interactive poll included 7,362 adults nationwide and was conducted July 27–30, 2007. It carries a margin of error of +/– 1.2 percentage points.

Asked which Latin American countries are the biggest allies to the U.S., Mexico is seen as the top ally, while Brazil is seen as a close second. Costa Rica is seen as the third greatest ally of the U.S. Asked which countries in the region are least friendly to the U.S., Venezuela and Cuba predictably topped the list. But Americans listed Colombia—which has been the U.S.’s closest ally in the past decade—as a distant third.

“The poll suggests that American adults are badly misinformed about the region,” said Peter Hakim, the president of the Inter-American Dialogue, a Washington think tank that collaborated with Zogby on the poll.

“Most Americans believe Brazil and Mexico are the U.S.’s best friends in the region, but the great majority cannot identify the president of either country, and they mistakenly identify Washington’s closest ally in the region, Colombia, as an adversary,” Hakim noted. “While US citizens identify two familiar adversaries in Latin America as Cuba and Venezuela, they do not know much about their friends,” said Hakim.

The Bush Administration considers Colombia one of its staunchest allies in the region, backing Plan Colombia with more than a half-billion dollars per year for its anti-drug, anti-guerrilla campaign. Colombia gets more foreign aid than any other country in the world outside the Middle East/Afghanistan arc.

More than half – 56% – said they believe China’s increased involvement in Latin America represents a serious threat to American influence there.

Among those respondents who identify themselves as most politically liberal, 48% said China’s increased involvement in the region represented a serious threat to the U.S., but the most conservative respondents were much more concerned – 76% said China’s activity was a serious threat to America. Just 10% said such involvement by China posed little or no threat at all to the U.S. role there.

“The poll results on China suggest a huge gap between U.S. public perception and reality,” Hakim said.

"Among the range of issues that are meaningful to U.S.-Latin America relations and to the region's economic vitality, I must say that China, as a threat to the U.S. in our own hemisphere, does not rise to the top of the list," Hakim said. "China's involvement with Latin America, although increasing, simply cannot compare to long-standing commercial, political, and social ties that Latin America has had with the U.S. and Europe. Any threat from China is among the lower-priority worries the U.S. faces in the region," he added. “Indeed, many observers believe that Chinese involvement in Latin America will, in the end, benefit all parties—the U.S., Latin America, and China,” Hakim said.

The wide–ranging survey about Latin American issues also showed that majorities of American adults believed it is time for the U.S. to open negotiations with Raul Castro, the stand–in Cuban president for brother Fidel, in an effort to improve relations between the two countries. While 58% felt the two countries should be talking about their future relationship, 56% said it is time for the U.S. to remove the travel restrictions on Cuba and to end the economic embargo against the island nation that sits just 90 miles south of Florida.

One in four American adults (26%) gave President Bush positive job approval marks specifically for his handling of U.S. relations with Latin America. Just 29% said they think the Bush administration has done an adequate job of focusing on Latin American issues and building stronger relationships with the region, while 60% disagreed with that statement.

A majority – 55% – said they believe the American economy benefits from migrant workers from Latin America, while 48% said the U.S. should pursue more free trade agreements with Latin American nations. One in three U.S. adults disagreed, however, saying they do not believe the U.S. should pursue more free trade agreements with southern neighbors.

The American public’s view of one well-known trade agreement in particular, NAFTA, might be the reason for lack of support for new trade agreements in the region. A substantial plurality (48%) believe that, of the three nations involved in the North America Free Trade Agreement – Canada, the U.S., and Mexico – the U.S. has been most harmed by NAFTA, which was signed into law by President Clinton in the 1990s. Just 3% said they think Canada has been most harmed, while 12% said they think Mexico has gotten the short end of the stick. Conversely, respondents, by a three–to–one margin, believe Mexico has been a bigger beneficiary than the U.S. under the trade agreement.

"The poll results reveal that U.S. public opinion is totally confused about what’s going on with trade,” Hakim said. "The American public even seems to be contradicting itself in some of the results. How can so many Americans believe that the U.S. has been harmed by NAFTA—while nearly half call for new trade agreements,” he said.

Source: http://www.zogby.com/news/ReadNews.dbm?ID=1346


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Excellent Commentary As Usual
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One particular opportunity that the Chinese would have...is to invoke economic efficiencies in the Caribbean and other Latin American countries...

Many of these economies are relatively small...and are moreless dominated by small monopolies and oligopolies...

It really does not matter about free trade agreements ...if efficiency is no where to be found...either because of government taxes...corruption...educational deficiencies...banking practices...legal issues regarding ownership...etc...

If and when the Chinese choose to sell homogeneous products for significantly lower prices...this will bring about major changes for the better in these inefficient systems...in that a lot of the unnecessary 200 + basis markups will be eliminated....thus a changing of the local guard will emerge ...at the utmost glee of the population...

Also the average income levels are more equal from an overall standpoint versus a US comparison...Thus the economic blending of the various groups is more likely...

Also the automotive capabilities as demonstrated both in India and China...as to the production of the $2500 car by Indias Tata Motors...offer the possibility of jobs at local assembly plants...etc..

Thus Chinese intervention could improve the standard of living both in the Caribbean and other Latin American countries..Whereas China manufacturing base can extend itself to some degree...while creating the demand base as well...

 

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October 1, 2007

SouthAmerica: Brazil, China and the New Asian Currency

When my last article - "Here Is Why Brazil Should Adopt the New Asian Currency" - was published on March 2, 2007, a number of people wrote directly to me and they also posted their comments on the web following the article. It became obvious to me that a number of people think that it is impossible for Brazil to adopt the new Asian currency.

You can read the article at: http://www.brazzil.com/content/view/9821


Here is a follow up 4-part series of articles in response to the above original article and much more.

I asked the editor of Brazzil magazine to publish my new 4-part series of articles starting today and he published only the Part 1 of 4 as yet. Hopefully he will be able to publish the other 3 parts some time today. Here is Part 1 of 4

“The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil”
Written by Ricardo C. Amaral
Monday, 01 October 2007

http://www.brazzil.com/content/view/9977/1/


By the way, my 4-part series of articles will answer some important questions – and most people will be surprised by the reason that I give on these articles why it is imperative that China invest $ 200 billion dollars in Brazil.

I guarantee you that you have not seen anywhere the reasons and connections that I made on my article to justify China’s investment in Brazil.

I wrote only one article, but I had to split it into 4-parts because a lot people give a hard time to the editor of Brazzil magazine when he publishes articles that are longer than a few pages. And he asked me to keep these articles under a certain number of words.

After all 4-part series of articles are published on Brazzil magazine I will create a blog on Google where I will publish the 4-part articles as just one article.

I hope the policy makers of the Brazilian government and of the Chinese government have the chance to read my latest 4-part series of articles about Brazil and China, and also that these articles will have the same impact that my article “Dear Saudis, Play Safe, Bring Your Money to Brazil” had in 2003.

In June 2003, I wrote an article regarding “Brazil and Saudi Arabia” that caught the attention of the Brazilian State Department in Brazil. As soon as the article was published on Brazzil magazine, on the same day, the Brazilian government posted a copy of my article at the Brazilian State Department’s website in Brazil.

Later, I also found out that my article had been circulated among members of the Saudi Arabian Royal family, and also among senior members of the Saudi Arabian government.

A week after my article was published I received a letter from the Saudi Arabian government inviting me for a visit to Saudi Arabia.

You can read about it on this forum at:
http://www.elitetrader.com/vb/showt...&threadid=50800

Today I still in contact with my friends from the Middle East and they are involved with the Saudi Arabian and Bahrain’s government. In my latest series of articles I also mentioned the oil producing countries of the Middle East in relation to investments in Brazil.

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link above boreken, live link http://elitetrader.com/vb/showthread.php?s=&threadid=50800

 

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October 25, 2007

SouthAmerica: Please feel free to join the discussion.

Note: So far there are over 600 comments from the readers following these articles since the articles were published starting October 1, 2007. The discussion regarding these articles still is going on.


Important - Must read articles about Brazil, China and the future.


If you are interested in Brazil and China then you should read the following articles and join the discussions and comments following the articles.

On March 2, 2007 Brazzil Magazine
“Here Is Why Brazil Should Adopt the New Asian Currency”
Written by Ricardo C. Amaral

http://www.brazzil.com/content/view/9821/80/#jc_allComments


These investments should be viewed from China's perspective not just as another investment to maximize its returns on invested amounts. It should be viewed by China as a matter of national security and long-term survival for its people.

Then as a follow up to the above article I wrote a 4-part series of articles detailing a plan for China’s $ 200 billion dollars investment in Brazil.

The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil - Written by Ricardo C. Amaral

Monday, 01 October 2007 - Part 1 of 4
http://www.brazzil.com/content/view/9977/1/

Friday, 05 October 2007 - Part 2 of 4
http://www.brazzil.com/content/view/9979/1/

Thursday, 11 October 2007 - Part 3 of 4
http://www.brazzil.com/content/view/9983/80/#jc_writeComment

Tuesday, 16 October 2007 - Part 4 of 4
http://www.brazzil.com/content/view/9985/1/


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the achilles heal is robotization of most everything...

as robotics makes leaps and bounds the competitive advantage China has will be lost, and they know that.

technology will undermine even China. Its a few years away.



what is a chinese worker?...a defacto robot. How many years does it take to build one, 18 years from birth to working age.

how many years will it take to produce a robot on demand?...1 month or less. So you see, the competitive advantage will lost in time.

which country is leading in robotics currently?...Japan, the wealth transfer will cease, and robotic industries will lead. Its Japans secret weapon.

What level will Nasdaq be when it happens?....7900