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

To: RealMuLan who wrote (22431)	1/29/2005 6:09:04 PM
From: SeaViewer	Read Replies (1) \| Respond to of 116555

This year, to clean up these underground banks has a high priority for the gov The best way is raising deposit rate at banks. Otherwise, people will find other means. The reason underground banks are popular is people know they get negative real interest rate at banks.

To: RealMuLan who wrote (22431)	1/29/2005 6:38:53 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bill Gates says China has created brand-new form of capitalism [Here we go again. It's different this time. Yiwu is this insulting? Mish] Saturday, January 29, 2005 10:07:24 AM DAVOS, Switzerland (AFX) - Microsoft Corp founder Bill Gates said China has created a brand-new form of capitalism that benefits consumers more than anything has in the past "It is a brand-new form of capitalism, and as a consumer its the best thing that ever happened," Gates told an informal meeting late Friday at the World Economic Forum here He characterised the Chinese model in terms of "willingness to work hard and not having quite the same medical overhead or legal overhead" Manufacturers have created "scale economies that are just phenomenal", in part owing to companies there and elsewhere on the planet designing good products, Gates said Looking ahead, he added: "You know they haven't run out of labor yet, the portion that can come out of the agriculture sector" was still considerable "It's not like Korea, Korea got to a point where, boom, the wages went up a lot," he said, adding "that's good, you know, they got rich and now they have to add value at a different level "They're closer to the United States in that sense than they are to where China is right now." Gates continued by heaping praise on the current generation of Chinese leaders "They're smart," he said with emphasis "They have this mericratic way of picking people for these government posts where you rotate into the university and really think about state allocation of resources and the welfare of the country and then you rotate back into some bureaucratic position." That rotation continued, Gates explained, and leaders were constantly subjected to various kinds of ratings "This generation of leaders is so smart, so capable, from the top down, particularly from the top down," he concluded forexstreet.com

To: RealMuLan who wrote (22431)	1/29/2005 6:41:34 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

DAVOS China pledges to float yuan after enacting reforms [Sheeesh - Now I have to comment on this. Yiwu, Thoughts please. Thanks. Mish] Saturday, January 29, 2005 1:38:49 PM DAVOS, Switzerland (AFX) - China will allow its currency to float freely on foreign exchange markets at some point in the future, but not before making structural improvements to its economy and reforming the banking sector, according to Vice Premier Huang Ju "We'll have a phased or step-by-step method to relax the restraints on the cross border trade of currency and gradually realize the convertibility of the renmimbi (yuan)," he told delegates at the World Economic Forum here Huang said China did not have a "specific timetable" for removing the yuan's peg to the US dollar as "several elements" would need to be addressed "We need to have a stable macro-economic environment, well established market mechanisms and a healthy operational system," he said. The government would also have to "to take into account the impact on regional areas", where development was not as advanced as on the country's eastern coast forexstreet.com

To: RealMuLan who wrote (22431)	1/29/2005 6:45:47 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

China´s Ruogo asserts autonomy in yuan decisions [Yiwu this makes sense. Is he a policy maker? other comments? Thanks - Mish] Saturday, January 29, 2005 5:08:32 PM DAVOS China's Ruogo asserts autonomy in yuan decisions UPDATE (Updating to include Li Ruogo's comments on future growth) DAVOS, Switzerland (AFX) - Li Ruogo, deputy governor of the Chinese central bank, told global economic pundits that the country was fully capable of handling the transition to a floating exchange rate by itself Ruogo said China alone would decide when the time was right to dismantle the peg that keeps the yuan fixed to the US dollar, a move some economic commentators believe is necessary to correct growing imbalances in the global economy "Leave this issue (of floating the yuan) to the Chinese people and the Chinese government. We will certainly figure out what is the most suitable approach for China's economic development," he said in a trenchant address to business leaders at the World Economic Forum here The deputy governor of the People's Bank of China said foreign monetary policy commentators were generally ignorant of economic conditions within the country. Their advice would therefore have little bearing on when the dollar peg would be removed. "Outsiders don't know what exactly is happening in China. We are happy to listen (to outside advice) but don't ask us to practice what you say," he said. "If we think it is correct (to float the currency) we'll go ahead, and if we think the time is not correct we will wait," regardless of "how heavy the outside pressure is." Ruogo rubbished arguments that allowing the yuan to rise in value against the US dollar would reduce the US' burgeoning trade deficit, regarded by many as the main threat to global economic stability "The idea that China has the key to the balance of the whole world's economy is totally wrong. The imbalances are attributable to many reasons, but not whether the yuan exchange rate is flexible or not flexible," he said The deputy governor reiterated Deputy Prime Minister Huang Ju's pledge to allow the yuan to float freely at some point, but not before structural improvements and banking reform were enacted "We have decided to gradually move to more flexible exchange rates but there is no timetable ... for the change," said Ruogo Deputy Prime Minister Huang's comments strengthened the impression that China would make its monetary and exchange rate policy decisions autonomously In an earlier speech, Huang said the government would have to ensure that poorer regions were not left behind in the economic boom "Rural areas and Muslim inhabited regions in western China have been identified by observers as places where Beijing could face problems if economic development did not keep pace with cities close to the coast." "We will provide more financial and policy support to rural areas and western regions and gradually narrow the gap between the urban and rural areas and between different regions," Huang said China's average growth rate was 9.4 pct between 1979-2003, cooling only slightly in 2004, and central bank deputy head Ruogo said growth would remain robust over the next 20 years forexstreet.com

To: RealMuLan who wrote (22431)	1/29/2005 6:51:15 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Soros says China should not be pushed into action on currency peg [obviously this is not official Chinese policy. ggg Mish] Saturday, January 29, 2005 6:03:47 PM DAVOS, Switzerland (AFX) - Financier George Soros warned that China should not be forced by other countries into taking action to allow its currency to find its own level of foreign currency markets Speaking at the World Economic Forum's annual meeting here, Soros said: "China is in a good position to do something about the renmimbi, and I think they are probably going to do it, but I don't think it would be a good idea to push them into it." "I think it would be good policy now for them to do something about the exchange rate and widen the band, which would mean effectively some revaluation, and also perhaps go to a currency basket instead of the dollar." forexstreet.com