| Can the appreciation of Yuan tame China's economic inflation? | |
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| Jun 10, 2008 02:41 |   |
 | China's Yuan breaks 6.92-mark According to the China Foreign Exchange Trading System, China’s Yuan was set at 6.9199 yuan against one US dollar, which sets a record high.The reference rate was up 39 basis points from last Friday's 6.9238. So far, the Chinese Yuan has increased by 5.5% against the US dollar this year. This was the 42nd times that the Chinese currency set a new high against US dollars. Analysts believed that the Chinese authorities would continue to allow the gradual appreciation of Chinese yuan against the greenback to tame inflation. Can the appreciation of Yuan tame China's economic inflation? What's your idea? |
| Jun 10, 2008 03:07 | #1 |
| No. |
| Jun 10, 2008 07:40 | #2 |
| "ditto" on NO |
| Jun 10, 2008 11:05 | #3 |
| Welcome to the world of currency manipulation! |
| Jun 10, 2008 19:19 | #4 |
| learn from US in fiscal policy, monetary policy, forex regime,ect to stabilized mocroeconmy or deal with external shock..does Plaza Accord of 1985 suit china with 1.3 population...USA controls oil price and cost of production and It is obviouse where the pressure of appreciation is from. to reduce input depends on tech improvement and the abundant cheap labors had better considering changing career from factories workers to export merchants. |
| Jun 10, 2008 21:23 | #5 |
| The U.S. is a debtor nation and will continue to be in the future. It's infrastructure is being sold and will continue to be in order to satisfy present and future debt. The theory that a weak $ will increase our exports and thereby maintain U.S. employment is a farce for our consumption. Our technology is being shipped overseas at an ever increasing rate. Our corporations can sell or give away high tech or trade secrets to other countries, but let an individual do it and it would be considered "treason" If in fact the U.S. does have control of oil prices, in my estimation , it will not last long , because of the staggering debt incurred. I.E. we will be at the mercy of creditor nations. |
| Jun 10, 2008 21:51 | #6 |
| gary, i quite understand what you mean. although i am from china, after several years of staying in north america, i am becoming closer to you native american thoughts under current global tides in terms of current trade flow, capital flow and tech flow globally. the thing is as north americans, we/or you should improve ourselves/or yoursleves instead of doing nothing/or depising yoursleves/or ourselves just looking at others catching up... |
| Jun 10, 2008 22:03 | #7 |
| Quote >>The U.S. is a debtor nation and will continue to be in the future. This reminds me of a discussion on American economy and its consumption on another form. If we observe it carefully, we will notice that USA is a big debtor nation, which means it owes a lot of money to others, whereas Americans almost lived the most affluent life in the world. What's wrong? It might be a related to the consumption concept. Americans are smart. They learned to live an affluent life by borrowing money. In China, it's a totally different picture. China has the largest store of foreign exchange reserves in the world and the largest store of national savings. As I remember, Forbes said that China saved 50% of its national income in 2007, by far the highest rate among the world's major developing or industrialized countries. China's citizens save about 25% of their net pay (in the U.S., this rate is less than 1%). However, Chinese people's living standard is dwarfed by the Americans. To the original topic, my answer is "No". The appreciation of Chinese Yuan is not a panacea for economic ills. |
| Jun 10, 2008 23:38 | #8 |
| The U.S. was at it's economic peak probably thru the mid 1970's partly because the end of WW2 created pent up demands for consumer goods that were deprived during the war plus the need for overseas construction and consumer items as a result of the war destruction. Since the mid 1970's the U.S. labor market either priced themselves out or were being priced out by foreign competition + automation was replacing workers on assembly lines. I.E. labor, in general, was going from a manufacturing base to a service base(generally pays less). Add to this the fact that we were constantly being bombarded with tv commercials and advertising to go "forth and consume" on "easy credit" created a situation "on average" of consumption $ being = to or greater than earning $. Hence, a very low savings rate. So, we have no one to blame but ourselves + the fact that the general public has let the government become corrupt thru lobbying efforts from both inside and outside our borders. So, why has China managed to save a larger portion of it's earnings? I would guess that, in general, the people have not been subjected to a constant pressure of consumerism as has the U.S., but have noticed a trend towards this in your larger metropolitan cities. Also, as China becomes more industrialized then consumerism will increase and the propensity to save will decrease. So, where does all of this lead to? Darned if I know. Enjoy your automobiles that are coming soon. |
| Jun 12, 2008 23:04 | #9 |
| high saving / gdp ratio, if taking the other way look around, means we cannot afford the lux. stuff. as a result, rmb appreciation won't increase imports while our exports will be hurt. and we have no mature financial intermediate that are able to allocate the resource to productive and effiecient public or private sector. social wealth weigh little in stock mkt, which is another indicator of backward of fin system. Also, china stock mkt lacks int'l rules of integrety, trasparency, instant, speculative elements involved much more than western mkt, meaning resource is not effectively used. as for the threat of inflation, i guess gov. will issue series gov bond to reach internal balance - CPI. certainly, tech improvement or highly capitalized industry (high value added) is cost effective, however, where would the massive labors go? to service industry - custormer service - call center, tele-mkting, being enterpreuners..this is the trend |
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