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

To: kormac who wrote (4563)	6/15/1998 9:20:00 PM
From: Frodo Baxter	Read Replies (2) \| Respond to of 9980

Thanks for that. Let me just amplify a point. "But the premise of Clinton's assertion is that a high growth rate denotes power. In fact, there is no necessary correlation between growth and health. Anyone willing to sell below cost will have a high growth rate, until he goes bankrupt. That is what happened to Japan. China's high growth rate does not mean that it has had profitable growth. Japan's problem, prefacing China's by about 8 years, was that it had magnificent growth, but the lowest rate of return on capital in the industrial world. The result was short term growth rates that were astronomical, followed by economic collapse." Frankly, this is the essential reason why everything in Asia just plain stinks. How exactly did Japan become the second-largest economy within a generation of having itself flattened in a war? Answer: leverage. If you get into such hock, you can rejigger your debt, but it takes an inordinate amount of time to get back on track. One day it will happen. Just not soon.

To: kormac who wrote (4563)	6/15/1998 10:57:00 PM
From: don pagach	Read Replies (1) \| Respond to of 9980

Seppo, Thank you for the interesting post, although it does seem impossible to believe!! However, in a strange way I can see it being close to reality, what are managers (who are probably rewarded on production) going to do? Shut down the production, rather full speed ahead with navy pinstripes. If anyone knows how Chinese factory managers' salaries are determined (piece rate, production sales, etc) please let the group know. Every post provides more information that the Chinese will devalue, watch the week after Clinton leaves China, HK will lose the peg and then the Chinese will say they have no choice and blame it on HK, not that I know anything besides that I would like 3 suits, pinstripe, navy, black and grey. Tailor Seppo when can you have those ready??