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

To: Joe Dancy who wrote (3967)	5/28/1998 10:10:00 PM
From: Ron Bower	Read Replies (2) \| Respond to of 9980

I'm posting my thoughts on China. I'm trying to figure out where I'm wrong because it seems to conflict with most (not all) of the expert opinions of what will be happening there. Unlike Japan, S Korea, and most of the developing ASEAN countries, if one considers the area involved, China has a deplorable infrastructure. Much of the industry is by necessity near the coast, particularly those companies that export. The reverse is that it's difficult to get imported goods into the mainland. This obviously benefits mainland manufacturers when competing for the domestic customer and prompts recirculation of currency (Rmb). This trade is taxed into the already large government coffers. With the exception of Japan, the other Asian countries are weak financially. China is strong financially, can afford to make needed infrastructure improvements, and has plans to do just that to offset layoffs from privatizing and reduction of government labor force. This provides jobs and prompts more money into circulation that stabilizes domestic business and is taxed and returned into more infrastructure. China is intent on a large export surplus, but they have the basis for a strong internal economy that the other Asian countries don't have and are less dependent on the import/export market. Their export objective is to bring in additional outside currency for circulation thru the economy. While the other currencies are openly traded, the Rmb is not. No market can force them to devalue. There are no striking unions (SKorea) or other internal forces that can have major influence on PRC decisions. China is influenced by US and Euro policy, but still able to control it's own destiny whereas other nations are primarily subject to market whims and their dependence on each other and Japan. Where am I wrong in my thinking? Ron

To: Joe Dancy who wrote (3967)	5/29/1998 7:48:00 AM
From: MikeM54321	Respond to of 9980

>>Russia's foreign debt of $145 billion is not huge as a percentage of its economy, but lenders around the world are clearly unwilling to put more on the line.<< Joe, I got the above out of your link. Thanks. I've been looking for this figure. Russia doesn't cause me too many worries, because as far as I know, Russia is not completely entangled with other countries like the Asian nations are. Russia's problems appear to be pretty isolated. My only concern is the EU's (Germany in particular) exposure to the problems of Eastern Europe. $145 billion is quite a bit for one or two countries to absorb. But if it's spread out over quite a few, then even if Russia totally collapses, I don't think it will cause a domino effect like little old Thailand did in July 97. Russia does have one of the largest oil reserves in the world (just have trouble pumping it out). So it would be pretty hard to envision them reneging on the entire $145 billion debt. I'm trying to dig up some more facts about this newly unfolding problem. FWIW, Jimmy Rogers, in his usual "sky is falling" manner, had some extremely negative comments about Russia collapsing last Friday. MikeM(From Florida)