Hello EP, One point at a time.
<<... about the US 'push' for the RMB re-valuation>>
... the US is officially pushing for RMB float, not RMB revaluation, in the mistaken belief that should the RMB be allowed to free-float, it would appreciate.
I believe if the RMB is revalued (re-pegged at higher rate), the Asian central banks would all try to get ahead of the line in unloading their USD treasuries, and ... eventually, monetary system collapse results.
I believe if the RMB is allowed to free-float, it would actually devalue against the USD, because China can print as well as the best in the world, with 4000 years of experience and 300 years of pent-up demand.
Either way, I do not see the advantage accruing to J6P.
<<1) Could it be really to slow the erosion of manufacturing in MEXICO, preserving the social stability and return on investment there ?>>
Mexico competing against China? Against which province of China :>)
<<2) Or is it to get some deals where China buys more US made capital equipment, airplanes, etc ?>>
... the US officialdom had never been interested in China purchasing US capital equipment, with the exception of airplanes. Not even construction equipment. To wit, the embargo against the largest infrastructure project in the world, the 3 Gorges Dam, in the form of denying ExIm bank guarantees to US manufacturers.
... and so China buys Japanese, German, Swiss, Swedish, Russian, Korean, Israeli, S.African, French, and British equipment instead.
... and now, the latest, China becomes a partner to the Euro version of Global Satellite Positioning system, and all it entails later on for civilian and military contracts, etc.
<<It's obvious to everyone that a 30% rise in the RMB would not directly increase even one US manufacturing job>>
... surely not obvious to everyone :0)
If I was the US officialdom, and I have the best interest of the electorates at heart, I would:
(a) enact legislation to protect certain absolutely critical industries via tax relief, red tape cutting, and government contract allotment;
(b) encourage/help US SMEs to set up businesses and factories in Asia, move beyond their traditional 600 mile radius home market and face the world's best competitors in their own game;
(c) encourage Chinese investment in the US, not in paper assets, but in assembly, sales/marketing, distribution, and after-sales services.
Chugs, Jay |
