Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Jess Beltz who wrote (4993)	3/17/1998 11:25:00 AM
From: Mark Oliver	Read Replies (2) \| Respond to of 10921

Obviously the issues of Asia's economic worries are important, but you guys are deviating the value of this thread. Just check the quality of posts and you will find EQUIPMENT related posts have disappeared. Now we can all start a new thread, or you can bring your discussion back to the subject.

To: Jess Beltz who wrote (4993)	3/17/1998 11:49:00 AM
From: Ron Bower	Respond to of 10921

Jess, I'm having difficulty presenting my views on this briefly, so I will apologize in advance for the length of this post. I am not a scholar on Asia or economics, so bear with me. The PRC's past failure to honor commitments and the policies towards HK being due to Macao and Taiwan considerations represents the negatives and positives of Chinese related investment. Obviously, China is currently adamant in it's conversion to a capitalistic economy, but restrained by past ideology. I believe the continuation of Zhu's policies to be vital for China's economic future. He now has almost complete endorsement by the PRC because China has been seeing strong economic growth. Whether his reforms will continue to be supported in the face of economic turmoil becomes the big question. China has a long history of reform failures. I am having difficulty understanding your reasoning on further devaluation of the Yen and ASEAN currencies. The recent devaluations have been drastic, possibly causing the currencies to fall well below a realistic value. The world has reacted to the regional problems by pulling money in their preference for $US. We now have inflation throughout Asia in the items that matter the most, primarily imported food and other goods. Cash is in short supply as banks are forced to restructure and this shortage of cash isn't conducive to further devaluation. IMO - Only a new development could cause further regional currency devaluation. The largest impact would come from a devaluation of the Chinese yuan. Not only would it be detrimental to other Asian economies, it would effect world currencies and would not be beneficial to China. Current unemployment in HongKong is 2.9% in spite of major immigration from the mainland. China does not reveal mainland unemployment and we can only use estimates. We do know that the government is closing down 15 ministries and laying off 4 million workers. This sounds major, but relative to the total number of Chinese in the available workforce, it becomes a minor number. China's capitalistic growth is in it's early stages. The growth industries are concentrated in certain areas and are experiencing a shortage of facilities and regional labor. The solution is for improved infrastructure that will allow companies to expand further into China. Plans for major infrastructure improvements in the next three years are part of Zhu's overall program. Not only will these improvements provide employment, they will create job opportunities from further business expansion. We cannot think of China in terms of Japan or others in the region. China has vast undeveloped raw material resources in addition to the extensive, but untrained, labor force. If they can maintain a short term export surplus anywhere close to the current level, the cyclation of monies will provide an economic stability that cannot be attained in other Asian countries because of their large reliance on imported goods. With an improved infrastructure and development of the resources, they will have the basis for continuing economic expansion. It's a stretch, but I can see comparisons of China to the US before the Industrial Revolution. We must also recognize the Chinese mentality that accepts adversity. Zhu's program of austerity is much more likely to be accepted in China- unlike South Korean Unions going on strike or Japanese workers continuing to expect lifetime employment. Only in China do we see realistic aggressive reforms to improve the economy. I'm not predicting 'doom and gloom', but our own government, commercial, and banking industry are not making adjustments to compensate for the changes we have not only in Asia, but in Europe, South America, and the Middle East. Most of Europe has extremely high unemployment and governments operating at large deficits due to liberal social programs. Even the Middle East is effected as Asia's reduced demand for oil occurs when world oil supplies have been increasing. While you refer to increased unemployment in the Asian countries, it is very likely that our own failures to adjust and reduced reliance on manufacturing will have the same results. Greenspan has been emphasizing this scenario, but has so far been ignored. I believe it to be a mistake. While our topic is Asian regional economic parity, there is a much bigger factor to consider. I own stock in HIHOF, a Chinese company that has acquired all of the assets of a bankrupt German clock company and moved the assets to China. This happens at a time when Germany's unemployment is over 15%. IBM is building a large facility in China. Catapillar in Brazil. A Mexican ECM recently lost a contract to an Asian company. SNDK in spending major monies for an Asian facility. The list is extensive. Most major companies are expanding production into Asia and South America. The World is a long way from reaching economic parity and I wonder how long the US can insulate itself from economic world problems? I have gotten far off track, but you can see the direction my thoughts lead me and my reasons for disagreeing with your premises. For what it's worth, Ron