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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: energyplay who wrote (36514)7/25/2003 4:42:38 PM
From: RealMuLan  Read Replies (3) of 74559
 
>>Arc of Democracy ...<<

Excellent point. So China should pursues its own course/form of democracy.

>>Some people in the Chinese government are being VERY smart about economic development. <<

And these people could not have been there by election.

And some Chinese economists gave 6 major reasons for why China should not reevaluate RMB now:
1. RMB is not a hard currency, so there won't be any market force to decide its exchange rate;
2. stronger RMB would worsen the deflation in China;
3. stronger RMB would result in less FDI;
4. stronger RMB would make made-in-China products more expensive thus China export less;
5. It will lower the profit margin for Chinese companies, thus make the already-high unemployment rate even higher;
6. Chinese gov. budget deficit would be much higher under strong RMB, so negatively influences China’s monetary policy.

And in September, CCP will have an important annual meeting. and it will address some major unbalances in China's economy. Some of the strategic changes might be:

Switch the emphasis of the development from high-tech to labor-intensive industry, and thus create more jobs as needed;

Majory development will be switched to the Western China;

Put more emphasis on job creating than GDP growth rate;

Some examples for the unbalance in the current economic development in China:
the gap between the eastern part of China and western part of China is ever increasing; fast climbing unemployment rate; ever-acute conflict between the haves and have-nots; the lost connection between GDP growth and industrial growth; the ever increasing gap bet. consumers and investment; the gap bet. urban and rural growth rate (only 0.3% growth rate for rural consumers); most of profit goes to the few big enterprises.

The policy to emphasize only growth rate is for the rich, and the policy to emphasize employment rate is for the people.

So there will be some major strategic adjustment.
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