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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (920)	1/15/1998 11:51:00 AM
From: RealMuLan	Respond to of 9980

There are many reasons. Some of I can think of right now (not necessary the most important ones) are: 1) As for Hong Kong, delink the peg and let Hong Kong dollars fall will not give Hong Kong more competitativeness because over 90% of Hong Kong economy are in service secotr. 2) The major problems for China's economy is internal (structure, etc). They can never be solved by export competitativeness, which is the major benefit for devaluation of one's currency, as I understand. And it is not a necessary a bad thing for China to reduce its growth rate by 1 or 2 percentage point. 3) This round of currency devaluation was actually started from China in 1994, and another round will defeat the whole purpose of the devaluation, because then everybody will have to follow again. And China will only end up worse off. Then what is the next? The third round ....? I don't think so. 4) Please remember China has a different system. So the word from a person as important as ZHU will hold much stronger, if not everything, than a similar figure's word in this system (I mean the US). These are just some reasons I can think of right now. I am sure there are more. But I got to go now.