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

To: Stitch who wrote (5517)	8/13/1998 10:34:00 PM
From: gmccon	Read Replies (1) \| Respond to of 9980

The Hang Seng is surging this evening.

To: Stitch who wrote (5517)	8/13/1998 11:58:00 PM
From: Ron Bower	Read Replies (1) \| Respond to of 9980

Stitch, I shouldn't say it, but IMO your Stratford Intelligence Report is a bunch of crap. There are no hard facts, no data, no statistics, nothing to support their 'opinion' that the yuan will be devalued except heresay and innuendo. It basically says there will be a devaluation because the Chinese leadership protests too much. With literally hundreds of articles coming out daily (like this one) about the potential devaluation, would it not be appropriate for the leadership to assure the people that it will not be? They don't even get what's happening right. "Black market exchange of yuan is 8.9 compared to 8.6" That's an improvement - it was 9.1 last week and that was upsetting, but 8.7-8.9 is the normal blackmarket range. The only reason it goes up is articles like this one and the black market traders using those articles to scare people into trading yuan, some of them even trade yuan for yen. "China is an export oriented economy" What? Only 20% of China's GNP comes from exports and the latest report shows that China's export surplus is growing at an adequate pace and is improving. This is the first article I've read that ties China's foreign exchange reserves to a devaluation of the yuan. I've read it twice and still can't see the reasoning. There's much more wrong with the article, but it isn't worth going into. If I read that China's GNP is declining and it's primarily due to a sharp decline in exports, I'll anticipate a yuan devaluation. As long as the reported GNP (accurate or not) is near 7-8% and the export growth about the same, IMO the yuan fears are baseless. Sorry, I just get tired of reading these opinion pieces that are based on so little solid research. FWIW, Ron

To: Stitch who wrote (5517)	8/14/1998 3:20:00 AM
From: B Tate	Read Replies (1) \| Respond to of 9980

Stitch As you know I have just returned from a trip to China. Stops included Shanghai, Changsha, Xiangtan, Chengdu and Pi Xian. A couple of observations. 1. Exchange rates varied depending on WHO you were dealing with. The standard (to me) rate of 8.1 - 8.25 were consistently available at hotel and bank currency desks. On the other hand some of my "friends" redeemed the Green Back at 8.65. As you can tell there was quite a difference between the "official" rate and the rate willingly accepted by the 'grey' economy. 2. Sometime ago on this thread in the discussion of whether or not China would devalue a comment was made that if China would spend on infrastructure to replace the potential income lost from export everything might stabilize. I am here to tell you they are spending and how! MAJOR, MAJOR construction going on in all locations I visited. Elevated Railway, Stadiums, Airports, highways, Parks and Schools in Shanghai alone. (One view out of the office window in Shanghai = that encompassed 90 deg. approx. - I counted 37, right, thirty seven jack-up cranes!) More of the same in all the other communities. Hugh spending in new college campuses (one of my target markets)both at the university level and the trade school level. There is also a program call "Two One One" whereby a large amount of money is targeted, every year, towards the IT infrastructure for Higher Learning facilities. This amounts to Billions of Rmb per year. (hopefully I'll get my share ;-)) 3. The flood damage is real and will take a long time to clean up. I flew over the "Long River" several times and from 30 - 35K feet it is obvious what the impact has been. There has also been substantial damage in some other areas that are not as newsworthy as the main area. For example the main river that traverses Changsha is approx 1000 Meters wide at the narrow point. In crossing over the high bridge we could see all up and down the river the houses/shops/factories that were half submerged. This will provide another use of Chinese resources. OFF TOPIC Went to see the first irrigation project in the world out past Pi Xian absolutely beautiful country. Looks just like the typical paintings of Chinese mountains with fog and mist etc. Really another world. A must see for anyone going in that direction. Music selection was horrible but managed to get in a few rounds ;-) rgds bt