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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (53322)	9/13/2004 7:24:41 PM
From: RealMuLan	Read Replies (1) \| Respond to of 74559

Bush rejects call for yuan rate probe Last Updated(Beijing Time):2004-09-13 10:59 The Bush administration last Friday rejected a call from U.S. labor, textile and steel groups for an investigation into the value of China's currency that could lead to a confrontation at the World Trade Organization. "Today's petition is reckless because the remedy it seeks of a 40 percent across-the-board tariff would put up walls around America, hurting U.S. exports, destroying U.S. jobs and endangering our economic recovery," Richard Mills, a spokesman for the U.S. Trade Representative’s office, said. In a joint statement, coalition members objected to the characterization of their 200-page petition as reckless and said its swift dismissal was "undoubtedly the fastest rejection" of such a petition in history. Bush administration officials defended their efforts to persuade China to revalue its currency, which has been pegged at 8.28 yuan to the U.S. dollar for the past decade. Rob Nichols, a spokesman for the U.S. Treasury Department, said in a statement that China was "moving in the right direction" by taking steps to strengthen and prepare its financial system for a flexible exchange rate regime. Source:Shenzhen Daily en.ce.cn

To: RealMuLan who wrote (53322)	9/13/2004 8:48:22 PM
From: Taikun	Read Replies (1) \| Respond to of 74559

Yiwu, I agree that China is growing quickly, and consumption is growing. I also think that it cannot continue at this breakneck speed without correction, and that a correction could easily be before 2008. Moreover, if the Yuan were depegged, and-as some think-it revalued lower, these income and asset numbers would not look so spectacular in USD. I also wonder what will happen to the price of materials for houses and cars as China consumes through the copper and other inventories worldwide and continues to strap demand for raw materials, as we are finding with oil. With a lower Yuan and higher materials costs I think there would have to be a slowdown. Finally part of the reason these demand numbers, when measured in growth rates, look good because China is starting from a very low base. The article even alludes to this: "China's present consumption demand is still weak, when compared with fixed asset investment." This rate of Chinese demand will be a problem for the world in terms of supplying materials, and may only benefit a few low-cost resource-rich nations. David