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.

Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (1623)	5/16/1998 1:00:00 PM
From: Stitch	Respond to of 2951

MikeM(from Florida) :) << Don't you think it will be inevitable there will be some local hot spots created by unhappy and unemployed workers?>> I suspect I did not emphasize enough but I share your concern and suggested as much when I said "We can only hope a similar development doesn't interfere with Zhu's goals. But those forces still most certainly exist in China and to not be wary of that is foolhardy in my opinion." You have rightly underscored what may emerge as the biggest threat to reforms in China. Especially if the U.S. is unrestrained in its resulting condemnations should social unrest be put down in a forceful way. The entire efforts of Zhu could be badly derailed by such turn of events. I hope for restraint from all sides but it isn't likely that there would be a happy outcome that pleased everyone. That is a reason to hope for accelerated retraining programs and institution of some social programs. In addition we might hope for a reinstatement of significant foreign investment as a way of supporting the effort. Best, Stitch

To: MikeM54321 who wrote (1623)	5/18/1998 5:42:00 AM
From: Tom	Read Replies (2) \| Respond to of 2951

Mike: Topic One... Don't you think it will be inevitable there will be some local hot spots created by unhappy and unemployed workers? Yes, I do. But there are many dissatisfactions in China today that bring revolt against the authorities on a regular basis. I wrote some time ago here about the history and relationship between the people of China and their leadership, yet it would be terribly presumptuous of me to pursue the topic. If so, don't you see another strong crackdown coming? Not necessarily. There was good restraint shown by PLA forces sent in to put down a riot in one of the Southern provinces last Fall. An armored vehicle was fire-bombed by angry protesters, yet I don't recall that the troops turned their weapons on the people. I just don't see how China is going to escape economic damage when all the Asian Tigers are falling around them. It will eventually hit China hard. I can't see the government letting it get out of hand. Remember Tiannamen Square(I have no opinion on T.S. but use it only as example). China is incurring damages as we speak. They are reacting to them very well. There are regional and provincial disparities that concern me, however. Topic Two. Plus, the Chinese government is working very hard trying to keep the currency from falling. At some point in time, won't it be to their benefit to let it fall a little. Afterall, it must take a lot of their reserves to keep propping it up each time it is attacked. So aren't they going to start worrying that their reserves are going to be spent on a depreciating asset and then let it fall? I don't believe the end assessment showed the HKMA depleted any amount of their reserves while defending the currency attacks. Are we speaking of the renminbi or the Hong Kong currency? China has other instruments still available. A devaluation of the renminbi at this point is not necessary. Though, as Stitch has mentioned, any number of events might force their hand. The disposition of the U.S. Fed. must also be a consideration where both the HK dollar and renminbi are concerned. If it falls a little, doesn't this help the unemployment situation making China more competitive with it's neighbors who have let their currencies weaken. Not when the the competition can not produce or get its goods to market, e.g. Jakarta. I believe Mr. Zhu has developed a set of "action points," that he is very aware of which contingencies must be implemented, and when. Thanks very much for asking, Mike.