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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (14798)	11/4/2004 10:51:16 AM
From: marginnayan	Respond to of 116555

China attacks Bush foreign policy Story from BBC NEWS: news.bbc.co.uk Published: 2004/11/01 10:58:11 GMT One of the main architects of China's foreign policy, Qian Qichen, has criticised US President George Bush just days before the American election. The former vice-premier accused the US administration of trying to "rule over the whole world". He added that the "philosophy of the 'Bush Doctrine' is in essence force". In an article printed in the state-run China Daily newspaper, Mr Qian also said the US-led Iraq war had sparked an increase in terrorist attacks. His comments mark a departure from China's usual stance of refusing to comment on US presidential candidates. Mr Bush faces his main challenger, Democrat leader John Kerry, in what is expected to be an extremely close election on Tuesday. 'Pandora's Box' Qian Qichen is a former Chinese foreign minister and vice-premier, credited with helping China out of diplomatic isolation after the 1989 Tiananmen Square protests. He said the "Bush Doctrine" developed in the wake of the September 11 attacks in New York and Washington had led the US to tighten its grip on many areas of the world. The policy "advocates the United States should rule over the whole world with overwhelming force, military force in particular," he said. Mr Qian said the war in Iraq had caused a rise in worldwide terrorist activity, and broadened the rift between the US and Europe. Far from winning peace, Washington's actions had had "opened a Pandora's box" intensifying ethnic and religious conflicts, he said. "The Iraq war was an optional one, not a necessary one, and the pre-emptive principle should be removed from the dictionary of the US national security." He added that Washington was now less popular internationally than at the time of the Vietnam War. "Bush did not even dare to meet the public on the streets when he visited Britain, the closest ally of the United States," Mr Qian said. It is unclear what prompted Mr Qian's comments, but US-Chinese relations have been strained recently by trade disputes, as well as Washington's refusal to send home Chinese Muslim detainees from the Guantanamo Bay military base in Cuba. Story from BBC NEWS: news.bbc.co.uk Published: 2004/11/01 10:58:11 GMT © BBC MMIV

To: mishedlo who wrote (14798)	11/4/2004 1:38:22 PM
From: RealMuLan	Read Replies (2) \| Respond to of 116555

China: Basic Work Done for Yuan Reform Thu Nov 4, 2004 06:20 AM ET BEIJING (Reuters) - China's top financial officials pledged to make the yuan currency more flexible, saying fundamental preparations had been made but stressing the need to avoid volatility, state media said on Thursday. The remarks intensified market speculation Beijing may hasten steps to adopt a market-oriented currency and allow the yuan, pegged against the dollar around 8.28 since the 1997-98 Asian financial crisis, to rise in value. The knee-jerk market reaction when China sprang its interest rate surprise last week was that the rate hike may push back the timeframe for a yuan revaluation. But many analysts now say a yuan shift could happen any time. "A perfect renminbi exchange rate mechanism, while keeping the renminbi (yuan) basically stable at a rational and balanced level, is the direction and goal of exchange rate reform," Li Ruogu, deputy central bank governor, was quoted by the Financial News as saying. "We have already made a host of fundamental preparations and achieved active progress," he was quoted as saying. Li did not elaborate. The currency reforms would proceed in a "gradual and steady" manner by taking into account banking reforms and the impact on domestic and global economies, Li was quoted as saying. The China Reform Daily quoted Guo Shuqing, head of the State Administration of Foreign Exchange, as saying China hoped to have a flexible yuan, but would have to control financial risk. "Stability does not mean there will not be flexibility. China also hopes to have certain flexibility in the exchange rate, but will control volatility and possible crisis," he was quoted as saying, without giving a timeframe. China would stick to the current reform goal of making the yuan exchange rate more market driven, Guo added. "But the reforms of the exchange rate system are comprehensive reforms and should not be simply viewed as a revaluation," he said. CONSISTENT The media reports prompted financial markets to bet the yuan will be four percent higher against the dollar in one year's time compared to the pegged rate, currency dealers said. The premium on one-year non-deliverable yuan forwards, hedging instruments used to bet on change in the tightly controlled currency, rose to more than 3,000 points, the highest premium in more than six months. Beijing has come under increasing pressure in recent years from countries, such as the United States, to free up the yuan. They say China derives an unfair trade advantage from an undervalued currency. Chinese authorities have pledged to make the yuan more flexible through reforms, but in their own time and without being bullied. Grace Ng, economist at JP Morgan Chase Bank in Hong Kong, said the remarks were in line with a growing belief that the government is thinking seriously about relaxing controls on the yuan. "The interest rate hike last week indicated the government's intention to move more toward market-oriented style of macro-controls," she said. "In fact, our view on the currency move is that we do think there is an increasingly significant chance that there will be a move on the currency in the next three to six months." The forex regulator vowed on Tuesday to crack down on speculative capital inflows fanned by expectations of a possible yuan revaluation, saying they had affected the balance of payments and disturbed government efforts to cool the economy. China has unveiled steps to free up capital outflows and restrict inflows in recent months to help take the heat off the yuan so that it could build a deeper, more balanced foreign exchange market. © Reuters 2004. All Rights Reserved. reuters.com