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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (3869)	9/2/2003 6:51:27 PM
From: Sergio H	Read Replies (2) \| Respond to of 37387

Hi Crossy. The valuation of the yuan issue was in the news today on US Treasury Secretary's visit to China and China's continuing refusal to revaluate. Going back to our previous discussion, it is my opinion that Japan's financial problems were a direct result of revaluation, which slowed the economy to a point where it wasn't worth investing in, even after huge govt. cash outlays for infrastucture. The banking crises was a byproduct of an economy gone bad. I want to share two items from today's news, the first from the WSJ reporting on Tres. Sec. Snow's comments and the second from CBS Marketwatch arguing in favor of China's current policy. Please note that both sides of the coin point out the international as well as US implications. < September 2, 2003 9:07 a.m. EDT China Is Standing Firm On Yuan's Peg to Dollar By PETER WONACOTT Staff Reporter of THE WALL STREET JOURNAL BEIJING -- China rebuffed calls to revalue the yuan Tuesday, as a top U.S. official arrived for talks on a currency critics say is giving an unfair boost to the world's fastest-growing economy and costing Americans jobs. U.S. Treasury Secretary John Snow, fresh from meetings with Japanese officials Monday, arrived in Beijing on the second leg of an Asia trip freighted with allegations of currency manipulation. Mr. Snow's trip to China has stirred hope back home that Chinese leaders might adjust a policy that has allowed its currency to weaken in line with the U.S. dollar. That has made the country's exports even cheaper, angering U.S. manufacturers hard pressed to compete with Chinese prices. But as the Treasury secretary's plane touched down from Tokyo, the Chinese government was showing no signs of budging from its official line. "We will keep the yuan stable according to the current policy," said a spokesman with the People's Bank of China, the nation's central bank. YUAN WAY • Snow Refrains From Criticizing China and Japan on Currency1 Mr. Snow had two days of talks scheduled, including meetings with Finance Minister Jin Renqing and People's Bank of China Governor Zhou Xiaochuan. However, no details of Mr. Snow's meetings emerged late Tuesday, and he wasn't expected to speak to the media before a press conference Wednesday morning. Mr. Snow's public statements so far have veered from criticizing China's currency system, although he has repeatedly argued that markets should determine exchange rates. On Tuesday, the International Monetary Fund indicated that China's leaders were in no hurry to accelerate a cautious pace toward a freely convertible currency. "The authorities continue to see exchange rate flexibility as a desirable goal as China integrates further into the global economy," said Horst Kohler, IMF managing director, after wrapping up meetings with many of the same leaders that Mr. Snow was scheduled to see. "However, they feel that the time is not yet right to move in that direction." Without efficient markets or banks to determine rates, China has avoided moves that might disrupt the lifeblood of its economy: foreign investors. China attracted about $52 billion in foreign investment last year, and is on pace to surpass that amount in 2003. Underscoring the enormous interests the U.S. has on both sides of the currency issue, American companies account for about one-tenth of that foreign investment. Many are reaping the benefits of cheaply priced goods, and so are their customers. But lawmakers and U.S. manufacturers are also focusing on lost jobs. The National Association of Manufacturers, a U.S. trade association, estimates that Chinese goods are 40% cheaper than they should be and blames China for a large portion of job losses in the U.S. China is starting to respond to such allegations. In a commentary Tuesday meant for a foreign audience, the government's flagship English-language newspaper, the China Daily, argued an "international browbeating" over its exchange policy was setting a dangerous precedent for foreign interference. "Should China now give in to pressure only to face dire consequences later?" it asked. "No way."> The second article, I'll just post a link to: cbs.marketwatch.com