g'day all - Mike & Bobby, thx for the tie-ins to other threads, especially since I don't visit those often.
I am be of the minority that China [and also HK, for that matter] will not devalue her currency. 1st, China has a sizeable reserve. 2nd, while I don't know much about the going on in China, she still has an ironfist-like grasp of the country's agenda. So long as there is no massive poverty eruption, there is no fear of political turmoil like those of Indonesia and Korea. 3rd, the labor cost is still low [even if one is to discount the prison population <sg>.] 4th, if one is to observe her business tactics [not that I agree with it,] she has been able to leverage significantly with a billion potential consumer carrot! Two weeks ago, on 60 minutes, it was mentioned that the chinese was able to acquire $10MM worth [as it was bid by the local] of special machine tools from one of the prominent defense contractor [Lockheed Martin?] for $5MM b/c she was able to dangle a potential $1B contract as the real deal. Controversy aside, this illustrates the differences between the situation with China and the lesser tigers. Finally, 5th, it seems to me that there is a need for China to keep her face . Behaving like the lesser tigers by devaluation may not be in her best emotional self-interest.
Just my 2c
Best, Bosco |
