Michael:
With regards to China and devaluation. I was in Asia some months back, and learned a great deal about China. I was coming from ignorance, so it was easy.
The devaluation of the Chinese currency thesis is based in the export economic equation. However, China is not an export economy like Korea, or Taiwan, or other SEA countries. China has quotas for internal production for internal consumption, as well as investment policies for doing business there. The policies are centered on a strong domestic economy first, and as long as that is there - there is really no risk of a devaluation. In some ways, I understand they view the devaluation as a destabilizing event in the region, leading to other devaluations, and that could derail their economy.
Most economists that have experience with China say it is not really likely devaluation will occur. Yet, many reputable Wall Street firms are saying it will. However, I've only met a few Wall Streeters I truly respect.
Z |
