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

To: GST who wrote (34116)	7/24/2005 1:33:51 PM
From: RealMuLan	Respond to of 116555

Message 21352516 especially the highlight part

To: GST who wrote (34116)	7/24/2005 1:54:57 PM
From: RealMuLan	Respond to of 116555

BTW, China will appreciate RMB more under the following conditions: -- When China's exporting structure has been changed significantly. Now the processing trade accounts for anywhere 50%-90% of all China's trade, depending on which type of industry. As much as 60%-70% of all foreign investment to China in the last 3-4 years are all related to processing trades. Due to the extremely low margin of the processing trade, China simply cannot appreciate RMB much before putting all those factories out of business. And how long it will take to change the trade structure? my guess anywhere bet. 5-10 years to say the least. After all China is big and poor country. -- When China has spent much of its foreign reserves in acquiring/developing natural resources; -- When China feels it has print enough RMB bills, following the US example; -- When FDI to China reduced significantly (so that China does not need too much foreign reserves to them back in case foreign investment wants to leave) There must be many other conditions, but these are the ones I can think of now.