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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (616)	8/31/2003 12:34:58 AM
From: BubbaFred	Respond to of 6370

Oops!, Sorry. I read them too quickly during the weekdays and didn't go to the link.

To: RealMuLan who wrote (616)	8/31/2003 9:57:33 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China tries to take heat out of forex speculation By Hamish McDonald, Herald Correspondent in Beijing September 1, 2003 Chinese authorities have announced a big increase in the amount of foreign currency its citizens can take on trips abroad in a bid to ease pressure to revalue its currency, the renminbi or yuan. Chinese travellers will be able to take out up to $US5000 ($7810) each without having to file a report and get clearance, up from $US2000, the State Administration of Foreign Exchange and the Customs Administration said on Friday. This comes just ahead of a visit by the United States Treasury Secretary John Snow tomorrow, when he is expected to urge Beijing to look beyond the renminbi's current peg of 8.27 to the US dollar, which has lasted for nine years. In recent weeks Chinese leaders and central bankers have stated that they intend to maintain the peg, although some analysts think the present very narrow band of movement against the greenback might be broadened next year. The relaxation on travel funds follows figures showing a substantial speculative inflow of money into China based on expectations that the renminbi will be allowed to move upwards. China's foreign exchange reserves jumped by $US60 billion in the first half of 2003, far more than the total $US4.5 billion surplus and the $US30.3 billion of direct foreign direct investment in the same period. The $US25 billion discrepancy is thought to be hot money flowing into renminbi bank accounts mostly by Chinese businesses and individuals rather than Western fund managers. Up until last year, there was a steady leak of Chinese capital to places like Hong Kong. The flow has reversed, says Zhang Yaxiong, a senior economic analyst at Beijing's State Information Centre, who pointed out that while Beijing has strictly policed forex outflows, it had paid less attention to inflows. Some critics say the renminbi, which has been dragged down by the US dollar this year, is undervalued by 40 per cent. Chinese exports to the US more than doubled to $US125 billion over the five years to 2002, while US exports to China grew slightly from $US13 billion to $US19 billion. Others argue any likely revaluation would not close the cost gap between Chinese and US factories. But Beijing's main preoccupation will be staving off a sharp return to deflation that a currency revaluation could trigger. smh.com.au