http://www.boston.com/business/glob...ials_exchange_rebukes_over_economic_policies/ Is this the Chinese way of saying, you are an idiot?: "Some American friends are not only having limited knowledge of, but harboring much misunderstanding about, the reality in China," Wu said." Furthermore: "Since January, China has overtaken Mexico as the second-largest US trading partner, behind Canada, the Commerce Department said this week. Total trade so far this year between the US and China is valued at $281 billion. The US trade gap with China was $190 billion -- more than a quarter of America's goods deficit worldwide for the period."
Yes. We are asking that, through fx, they restrict exports while making imports from the U.S. relatively less expensive,,,and that they do this even in the face of the need to create hundreds of millions of new jobs. Requesting a nation which must grow or die constrain itself is hardly less than requesting that government overthrow itself, which might be seen as idiotic.
Bernanke comes home empty-handed: http://www.nytimes.com/2006/12/16/business/worldbusiness/16trade.html?ref=business I was betting on Chinese shrewdness...they agreed to setting up a few study groups...
I recall reading that there was a time, perhaps about year 1940 when the USA was a creditor nation. The USA could ask another county for military help and in exchange forgive some of their debt. Forgiving debt has an instant positive effect on a debtor nation. Forgiving debt reduces the wealth leaving the debtor nation and makes funds available for debtor nation internal spending. I remember reading that today the USA is the largest debtor nation in the world and social security is projected to go broke about year 2020. Suppose the retirees of the USA are demonstrating in the street because they have not received social security benefits for 4 months. The Chinese Government might say,"Ms. USA President, please support us in our efforts to unite with Taiwan Republic Of China and we will forgive some of your debt". Will the USA President agree to allow Taiwan to return to mainland Chinese control? USA debt might be a troublesome thing.
This will be a long and complicated process that will result equitable encomic balance. It all comes out in the wash! Akuma
China needs to keep the Yuan pegged low whilst they are still saving up $ to buy America. It's just a really good way of leveraging their greatest asset of a huge labour force.
Put me down for greatly disappointed in the biggest way. Big Ben started the year with his Maria Bartolomo interview and ended it however many rate hikes later with this ridiculous trip to China. Bernanke shouldn't of gone to start with, he is to give the allusion of being independent of the government at all times. Once on the plane he then backs away from his original thought: Mr. bernanke'sâs advance text, called Chinaâs undervalued currency an âeffective subsidyâ of exports. In the end, though, he omitted that term. The word gutless comes to mind. We have an amazing opportunity now with China expecting the Olympics- we should be PRESSING THEIR ASSES on everything including Taiwan. They are so damn eager now to get their economic story out to the world to prove they are not the backwards nation that runs over schoolchildren in tanks- that this become their Achilles heel. For gods sake they should just relieve the US of it's $700 billion debt! Paulson, Mr. Bigwallstreet got fed the big egg roll on this one and I'm not sure through the mouth. This trip that agreed to set up " study groups " is a total disgrace. To get faced like that and with the FED sitting there too is I'm afraid to say a sad comment on the United States roll in world affairs these days. In probably the ultimate tour de force- Bernanke then told the Chinese: It all boiled down to they cannot have a sound market economy and also an artificially low currency value. >This from a nation that allows it's currency to sink 10% a year!
Wow. What a strange commentary. I was in China this past summer, and I was in China almost 20 years ago. China today makes the US look like rural Russia in terms of aging backwards cities. I hardly think they need to 'prove' anything to the world, let alone that they're backwards, when their smallest cities make NYC, and even Miami, look puny dirty and old by comparison. You cannot even concieve of comparing Shanghai to a combined NYC, LA, and Miami... it would blow the 3 US cities away if they were laid side by side, for size, beauty, population and wealth. They should forgive the US our debt? Go try that on your banker about your mortgage payment.
Excellent Commentary......................... It is possible to view the China role in globalization as simply the lower income end having to move up....or just treading water while the higher end moves down... The top end being $180,000 to $120,000....and the bottom end at a little less than $3000.... The high cost countries are simply having to transform to lower cost countries...which is a lot more uncomfortable than making the lower to higher cost change....because workers like more ...not less money... China simply treads water here ...then the high cost countries will simply lose industries...which they are doing... If China just bumped the $200 monthly wages to $400....then it is quite likely that they would move to number 1 or 2 in the consumption category.. The real issue here is less than a $100 per month number... This is how sensitive big change can be ...although smaller amounts are involved.... The reason is very simple... $100 X 2,000,000,000,000 = $200 billion $100 X 300,000,000 = $30 billion There is basically no where for the upper end to go but down...and no where to go but up for the lower end... Thus the role of globalization... Seeing how such a small percentage of the US population controls the majority of the wealth in the US ...this obviously implies the tax structure is not a very good wealth distributor....and that the US will go left...as they will have the votes... It certainly looks like the top end countries will be in both economic and political turmoil for some time to come....before the two ends come closer together.......
I stayed in China from 2003 to spring of 2006, mainly in Shanghai, and took a few trips to Beijing and Shenzhen, a little city next to Hong Kong. The cities are very much back-watered due to lack of proper education provided for the people. The majority of the population suffers from dire poverty, there's a lack of drinking water, pollution in the air is horrible where rashes are a guarantee, and the media is full of socialist, anti-west propaganda. Morality and ethics do not exist, the locals will rip you off as much as possible, e.g. taxi drivers taking longer routes, "surprise" fees at kareokes, watered down drinks... etc. The few modern looking areas are built to cater to foreigners full of prostitutes, which has become a huge attraction for foreign male travelers. So no, China is still light years away from the civilized west, and is a horrible place to live. The Chinese leaders know this, and realize the RMB can not stay undervalued forever. They're just trying to buy time to promote innovation in the country to hopefully hedge against the risks of a rising local currency.