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

To: mishedlo who wrote (34079)	7/23/2005 7:17:11 AM
From: Chispas	Read Replies (1) \| Respond to of 116555

A complimentary to Mauldin's (and, more clear)- . news.goldseek.com

To: mishedlo who wrote (34079)	7/23/2005 8:01:55 AM
From: Oblomov	Respond to of 116555

Maudlin gives a good summary, although it was Lao-Tzu, not Mao, who said that a journey of a thousand miles begins with the first step. But Mao's exhortation to let a hundred flowers blossom and a hundred schools of thought contend is perhaps equally applicable to what is happening in China today.

To: mishedlo who wrote (34079)	7/23/2005 2:58:09 PM
From: RealMuLan	Respond to of 116555

The article has a good title, and I like it<g>. Now if the US gov. officials can also think and perform like Chinese, wouldn't the world become a much interesting place?<g> >> In practice, what I think the Chinese will do is to slowly allow the yuan to appreciate. By slowly, I mean 2-3-4-5 years and by 5-10-15%. This is going to be like watching paint dry. << If those percentage is accumulative ones, then sounds about right. That is to say RMB appreciates 5% every two years. >>So the upshot is that we are going to see more factories in areas where labor costs are even less. << True. I read that in Guangzhou, some companies only offer 700 Yuan monthly pay for a college graduate. Usually, this kind of pay is supposed for the unskilled sweatshop workers, and many workers already refuse to take it. So few college graduates take that kind of offer. Most of them would rather stay unemployed than selling themselves that cheap. >>Right now, per capita income is China is about 3% of that in the US. << True, but comparing India and some other Asian countries, the labor cost in China is already higher. Overcapacity in China is a problem now and will be for the next couple of years, all thanks to the wonderful higher productivity of the capitalism. And that is why some already alert that deflation may come back in China. Although for China, deflation may not necessarily a bad thing judging from the fact during much of the 1990s China had pretty bad deflation. Plus, if the gov. keeps doing what it has been since last year -- subsidizing agricultural sectors and farmers, the domestic consumption should pick up in a matter of decade.