Hello Darfot, <<japanese ... chinese>>
The Japanese actually manipulate their currency by intervening in the currency markets, billions every month, up to 30 billion for peak month. Their export to the US is produced by the domestic globals such as Toyota and Sony.
The Chinese on the mainland and in Hong Kong actually has a hard pegged currency, and if it makes any difference at all to anyone around the world, they can dollarize their currency regimes without affecting domestic situation one way or another, for a while on the mainland given its RMB non-convertibility, and forever in Hong Kong (for every 7.8 HK$ floating around the economy, their is one US$ in reserve).
The Chinese on Taiwan and Singapore manages a sort of dirty peg, half way in between the construct of Japan and China.
2/3 of all Chinese exports to the US are actually done by US companies, using either contract production or own invested factories. A RMB revaluation against the USD will (a) increase landed cost of these companies, (b) raise manufacturing cost to the extent the material/labour is China domestic sourced, and (c) lower manufacturing cost to the extent material is being imported from US to China.
I heard a Walmart global VP say that Walmart purchases from its 2,000+ Chinese contract factories accounts for 4% of China GDP.
In so far as Japan and China is concerned, the economic integration between China and US will be much tighter than that between Japan and the US, as soon as Japan run out of exportable capital.
The Japanese will run out of exportable capital one fine day unless they are able to engineer a Japan-China economic integration. Given the number of Japanese factories in China, and the net new add each month, that integration is also happening.
Europe? Do or die, and so they do the same, moving factories.
Chugs, Jay |
