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

To: RealMuLan who wrote (1936)	12/12/2003 2:37:39 AM
From: BubbaFred	Respond to of 6370

China's Currency Not Costing U.S. Jobs Thursday December 11, 2:42 pm ET By Tim Ahmann WASHINGTON (Reuters) - China's currency peg to the dollar puts its economy at risk of overheating, Federal Reserve chief Alan Greenspan (News) said on Thursday, while dismissing U.S. manufacturer charges that the tie has cost America jobs. ADVERTISEMENT "A rise in the value of the renminbi would be unlikely to have much, if any, effect on aggregate employment in the United States, but a misaligned Chinese currency, if that is indeed the case, could have adverse effects on the global financial market and, hence, indirectly on U.S. output and jobs," Greenspan told the World Affairs Council of Greater Dallas. "(Chinese) central bank purchases of dollars, unless offset, threaten an excess of so-called high-powered money expansion and consequent overheating of the Chinese economy," he said, echoing an argument he has made in the past. China buys dollar-denominated assets to keep the value of the renminbi, or the yuan, pegged at 8.28 to the dollar. Greenspan noted China had taken some steps to offset its dollar purchases and rein in money supply growth, which could fuel inflation and lead to a need to put a sharp brake on the economy. But he said a rapid monetary expansion was nonetheless underway. "Should this pattern continue, the central bank will be confronted with the choice of an overheated economy, with its potential recessionary consequences, or a curtailing of dollar asset purchases," Greenspan added. "The latter presumably would allow the renminbi to appreciate against the dollar." The dollar slipped modestly on foreign exchange markets shortly after Greenspan's comments. Employment in U.S. factories has fallen 2.8 million over the past 40 months, fueling cries for protection that have caught the ears of politicians. Much of the focus has been on China. U.S. manufacturers have complained vociferously that Chinese producers have benefited unfairly from the currency peg. The Bush administration has been pushing China to move toward a more flexible system of foreign exchange. However, Greenspan argued any decrease in Chinese imports into the United States from a stronger yuan would likely be offset by a pick-up in imports from other low-wage countries. He said while Chinese exports to the United States had risen, that gain had come at the expense of other East Asian exporters. The U.S. trade gap with China hit a record $103 billion in 2002 and is expected to top $120 billion this year. Arguing against what he termed the "so-called conventional wisdom," Greenspan said the loss of U.S. jobs was not due to low-priced competition from abroad but to weak exports, a drop in business investment and increases in business efficiency. Greenspan, as he did in a speech last month, offered a staunch defense of free trade, saying a rise in trade protectionism in the United States carried more costs than benefits. "Were we to yield to such selective nostalgia and shut out a large part, or all, of imports of manufactured goods and produce them ourselves, our overall standards of living would fall," Greenspan warned. "The consequences of moving in that direction in today's far more globalized financial world could be unexpectedly destabilizing," he added. The Fed chief conceded that low-wage U.S. workers were "being priced out of the global labor market," but said history counseled that any jobs lost would be replaced. "We can ... be confident that new jobs will displace old ones as they always have," he said. biz.yahoo.com

To: RealMuLan who wrote (1936)	12/13/2003 10:47:38 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China opposes foreign interference on HK affairs: Official www.chinaview.cn 2003-12-13 22:34:28 HONG KONG, Dec. 13 (Xinhuanet) -- China Saturday expressed opposition to foreign interference on Hong Kong's political development after the top US diplomat to Hong Kong made some "irresponsible remarks" a few days earlier. "It must be pointed out that the issue of Hong Kong political development is China's internal affairs and we firmly oppose any foreign interference on this issue," said a spokeswoman of the Office of the Commissioner of the Ministry of Foreign Affairs of the People's Republic of China in the Hong Kong Special Administrative Region (SAR) on Saturday. "A few days ago, the Consul-General of the United States of America in Hong Kong made some irresponsible remarks on the issue of Hong Kong's political development in a luncheon speech," said the spokeswoman. Since Hong Kong's return to China, the Chinese central government has unswervingly implemented the policy of "one country,two systems", "Hong Kong people administering Hong Kong", and a high degree of autonomy; firmly supported the SAR Government in its administration under the law; and strived to maintain Hong Kong's prosperity and stability, according to the spokeswoman. "The Central Government is highly concerned with the political development of Hong Kong SAR and has a clear standpoint on this issue. Hong Kong's political structure shall develop in the light of the actual situation of Hong Kong, and follow the principle of gradual and orderly progress in accordance with the Basic Law," said the spokeswoman. "The long-term prosperity and stability of Hong Kong is not only beneficial to all the Chinese people including the Hong Kong compatriots, but also in the interests of all investors from foreign countries including the United States," said the spokeswoman. "The US government has repeatedly expressed its willingness to support the Chinese government in the implementation of 'one country, two systems' in Hong Kong. We hope that the US consular officials in Hong Kong could do something that is really favorableto Hong Kong's stability," said the spokeswoman. Enditem news.xinhuanet.com