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To: donald sew who wrote (15921)	8/15/1998 12:04:00 AM
From: Broken_Clock	Respond to of 116984

donald...just one man's opion here, but it is looking more and more like it's every country for itself these days. Chinese leaders must be ROTFLtherecollectiveAesO watching the USA and our "fearless" leader. These guys suckered him in and now are fleecing Japan and us while Rome burns. I wonder when our turn will come? 6 trillion national debt called in and sold off just like Japan...but worse. Can't happen? I'll bet that's what Japan thought too....

To: donald sew who wrote (15921)	8/15/1998 11:59:00 AM
From: Alex	Read Replies (1) \| Respond to of 116984

Will China devalue currency? Date: 15-08-1998 :: Pg: 14 :: Col: a By V. Jayanth CHENNAI, Aug. 14. Whether you are picking up souvenirs in Australia, machines and gadgets in Southeast Asia or clothes and toys in the U.S., a majority of them are ''Made in China.'' That is how China has captured the markets, systematically in most free-trading nations of the world. China Towns or even the ''Burma bazaars'' have a surfeit of goods from China that come through both legal and clandestine channels across the world. Because of their cheap prices, they can find their way into any market and hold their own. By its sheer size, capabilities, cheap labour and sustained growth, China has emerged as a potential economic superpower of the Twenty- first Century. After maintaining double-digit growths in GDP from 1992 to 1995, the Chinese economy moderated to grow by 9.7 per cent in 1996 and slowed down to 8.8 per cent last year. Though projected to grow by 8 per cent in 1998, indications are that it may reach just over 7 per cent because of the East Asian economic crisis. Economists and market analysts in East Asia feel that one of the causes for the 1997 crisis in the region was China's devaluation of its currency, the Yuan, in 1994. That began to hurt the region's exports by making Chinese goods cheaper in world markets, but it took some time to show in the individual economies, beginning with Thailand. With high levels of savings and investment, China has focused consciously on technological upgradation, in many spheres. While achieving a 11 per cent increase in overall investments in 1996, China pushed for a 33 per cent step up in its investments in critical infrastructure projects. All transport and communication bottlenecks are being systematically removed. Industrial growth has averaged at 18.2 per cent between 1991 and 1995, but moderated to 12.3 per cent in 1996. It is said to have moderated to about 10 per cent last year and Beijing will find it difficult to even maintain that. Thanks to its planning and monitoring, China was able to effect a ''soft landing'' for its economy in 1996. The focus was on moderating inflation without restraining growth beyond a point. Inflation was contained that year at a creditable 6 per cent, according to a survey by the Economic and Social Commission for the Asia and the Pacific (ESCAP). The official budget stood at less than one per cent of GDP. At a time when many of the East Asian economies were burning away their foreign exchange reserves in defending their currencies last year and providing for basic imports, China had built up a ''very comfortable reserve,'' estimated at a whopping $132.3 billions by December 1997. It also remains the largest recipient of Foreign Direct Investments in the developing world, the ESCAP says. This year, China is finding the going tough. More than the Southeast Asian countries, it is the stagnation in the Japanese economy and the recent slide in the Yen that have raised fears over a possible devaluation of the Yuan by Beijing. At the height of the East Asian crisis, the Chinese Government assured them that it will not devalue its currency as it will remove whatever benefits the crisis-ridden economies derived from their highly depreciated currencies in terms of better export prospects. Analysts are so worried about China reviewing its currency because it will open the flood gates for a severe depreciation of the East Asian currencies all over again. Beijing seems to be caught between its national priorities of falling exports caused by the non-competitive currency rates and its regional or international commitments to a neighbourhood in the throes of a major recession. As China embarks on the promised reform of its State Enterprises and supporting institutional development such as legal and market regulation framework, besides removing its trade and tariff barriers, it will want to maintain its export benefits. As it reaches the final stages of negotiations to join the World Trade Organisation, it remains to be seen if the authorities in Beijing put their national agenda first, or demonstrate their commitments to the region to drive home the message that the new, emerging China will turn out to be a ''responsible power.'' If China decides to postpone the devaluation of its currency, it will be seen as a contribution to the region's economic recovery. But it will hurt Chinese exports in the short term. On the other hand, if it chooses to ''adjust'' its currency in tune with the regional developments, that can trigger a fresh crisis in East Asia and indefinitely delay its recovery. There is a price to pay and it is for China to decide whether it will pay the price in the short term for its own long term benefits and plans to be a ''superpower'' by the year 2020. When the U.S. and Europe are also beginning to feel the pinch of the Asian meltdown, the last thing that the troubled continent will want is a devaluation of the Chinese yuan. Global trade is going through a rough patch and India is no exception. Even a moderate 5 per cent growth in exports may not be possible for India, should China devalue its currency. The impact on Southeast Asia will be substantial, wiping out even the trade surpluses that some of these economies have begun to generate. webpage.com