Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: smolejv@gmx.net who wrote (55686)	11/7/2004 9:34:51 AM
From: RealMuLan	Read Replies (1) of 74559

Thanks for the article, Dolinar. The article has made some good points, but they are only relevant to domestic trade, not the export industry. The bad debt bet. Chinese companies themselves are much easier to solve. Companies can make big sales only when there is a buyer. And no one would want to sell if they knew at the beginning they could not get paid. >>Those managers in China are probably still daydreaming that they could live twice and had paid back the related-party loans when the dollar was still high. << This would not be their dream as long as China keeps the Peg. And also, since most of their borrowing booked in US$, so when they get the US$, can just return the US$ to the gov.. For these exporters, the change in Peg will affect them much more than the decline of US$ value in related to other foreign currencies. Wonder why Chinese gov. take such a caution to change the Peg? And for sure Chinese companies have a lot of accounting irregularities, but I don't think they have much to do with long-term account receivables in exports.

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