Yuan rise would be disastrous: China export body

Yuan rise would be disastrous: China export body
Mar 28, 2010 20:55	#11
COOLSPRINGS Points: Join Date: May 19, 2008 Status: Offline	“There are legal channels to deal with trade frictions between China and the US, both bilateral and multilateral channels exist now. With the expansion of China’s domestic demand, China’s import is expected to increase. Meanwhile, China sees greater surplus in cargo trade while the US sees greater surplus in service trade, therefore, the imbalance is not very serious,” explained Professor He. He said Sino-US trade frictions will continue to increase, but with the increase of China’s import and the expansion of US service trade with China, the imbalance can be alleviated. On the comment that China, as a developing country, is actually subsidizing the US which is a developed country, Professor He disagreed with such a view. “It is not really true. China and the US are mutually complementary in most circumstances, in some cases they are real competitors,” Professor He said. With the readjustment of Chinese economic mix, Sino-US relations will not be as simple as a relationship between a developing country and a developed country. They can become competitors in many areas, similar to the case when Germany and Japan rose after the war and competed with Europe and the US, Professor He predicted.

Mar 28, 2010 20:55

#11

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“There are legal channels to deal with trade frictions between China and the US, both bilateral and multilateral channels exist now. With the expansion of China’s domestic demand, China’s import is expected to increase. Meanwhile, China sees greater surplus in cargo trade while the US sees greater surplus in service trade, therefore, the imbalance is not very serious,” explained Professor He.

He said Sino-US trade frictions will continue to increase, but with the increase of China’s import and the expansion of US service trade with China, the imbalance can be alleviated.

On the comment that China, as a developing country, is actually subsidizing the US which is a developed country, Professor He disagreed with such a view.

“It is not really true. China and the US are mutually complementary in most circumstances, in some cases they are real competitors,” Professor He said.

With the readjustment of Chinese economic mix, Sino-US relations will not be as simple as a relationship between a developing country and a developed country. They can become competitors in many areas, similar to the case when Germany and Japan rose after the war and competed with Europe and the US, Professor He predicted.

Mar 28, 2010 20:56

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On the issue of trade protectionism, professor He clarified that the main trend in the world is still free trade.

“There are big differences in trade protectionism and trade protection policies. Protectionism means a ban on free trade. But trade protection policies are allowed even with WTO rules. Otherwise the world will fall on the situation such as in Somalia or Haiti (where people and business are not protected at all).”

Professor He explained that facing the financial crisis, various countries tried to use all kinds of protection policies to protect their own economy. It seemed that protectionism is rampant. In fact, the main trend is still free trade.

On the question whether RMB should appreciate, Professor He pointed out that RMB is not a simple issue of appreciation or depreciation. The main question is the reform of RMB system. He predicted a small scale of appreciation of RMB in the near future, but when and how much are hard to say.

He said RMB should experience a legal reform adapting the market rules. “It is not an issue of appreciation, it is an issue to make RMB able to change freely in the world. It is a good chance now, but there is still some risks, ” said Professor He.

Mar 28, 2010 20:56

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Of course, due to the situation that RMB is only attached to the US dollar, China has avoided disastrous crises in the world many times. However, RMB cannot avoid disasters by being protected in the long run. RMB should be like a real commodity to experience competition in the market economy and legal environment so that it becomes a strong currency.

“China is a huge country, it is abnormal if RMB is not internationalized in the long run,” said Professor He.

He stressed that RMB should become an internationalized currency which is in compatible with market laws. “This is the main direction and will not change”.

Currency is also a kind of commodity, its price should be decided by its value and demand as well as the fluctuation of other currencies, Professor He explained.

Every country will intervene in its currency in a proper way, only the scale varies, he said.

Mar 28, 2010 22:20	#14
BOBERT Points: Join Date: Jan 1, 2009 Status: Offline	COOLSPRINGS; You are attempting to make a simple problem appear complicated. It's not. It's just simple mathmatics. The article you posted does not address the problem. It simply advocates postponing it. That will not be allowed to happen for much longer. The entire world is saying the yuan is artificially devalued which is giving China exporters an unfair advantage. China is the only dissenter in this argumant and we both know the motivation for that. In a little over two weeks the US Treasury Department will rule if China is to be labled a currecy manipulator. For many reasons both domestic and international, it's odds on that it will. Under US law, tarrifs must be imposed on any imports from nations who manipulate their currency. Europe will soon follow the US lead, as they always do in such matters. A trade war is looming and if the yuan continues to be devalued, then China will soon forfeit her export generated revenue surplus to other developing nations. Increased Chinese domestic consumption could never make up for such a huge shortfall. End of story!
BOBERT Points: Join Date: Jan 1, 2009 Status: Offline	Last edited by BOBERT: Mar 28, 2010 22:23

Mar 29, 2010 22:51	#15
COOLSPRINGS Points: Join Date: May 19, 2008 Status: Offline	BOBERT, I just cannot imagine that there is such a high proportion of poor people in America that they smashed through the doors and trampled over each other to death in Walmart on black Friday.
COOLSPRINGS Points: Join Date: May 19, 2008 Status: Offline	Last edited by COOLSPRINGS: Mar 29, 2010 22:52

Mar 29, 2010 23:51	#16
BOBERT Points: Join Date: Jan 1, 2009 Status: Offline	Quote: Originally Posted by COOLSPRINGS BOBERT, I just cannot imagine that there is such a high proportion of poor people in America that they smashed through the doors and trampled over each other to death in Walmart on black Friday. The people who do that are not necessarily poor COOLSPRINGS. The only thing that type of behaviour requires is greed.
BOBERT Points: Join Date: Jan 1, 2009 Status: Offline	Last edited by BOBERT: Mar 29, 2010 23:52

Mar 31, 2010 20:43	#17
COOLSPRINGS Points: Join Date: May 19, 2008 Status: Offline	Quote: Originally Posted by BOBERT The people who do that are not necessarily poor COOLSPRINGS. The only thing that type of behaviour requires is greed. NO, definitely NOT, Bob. It's caused by poverty reflected in consuming the low quality.

Apr 1, 2010 08:54	#18
DODGER Points: Join Date: Jul 15, 2007 Status: Offline	CP’s, that is absolute BS. But I await Bob’s answers. Dodger.

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