Chinese Premier Wen Jiabao said on Sunday that Beijing would not give in to foreign demands for its currency to strengthen, taking an increasingly defiant tone amid mounting international pressure for China to shift its exchange rate policy.In an interview published by the Xinhua news agency on Sunday afternoon, Mr Wen said some of the demands for China to appreciate its currency were an effort to contain the country's development."We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the renminbi to appreciate, and on the other hand, you are taking all kinds of protectionist measures," he said.By keeping the Chinese renminbi stable against the US dollar, China was contributing to the recovery in the global economy, he said. "The purpose [of these calls for appreciation] is to hold back China's development," he added.China has effectively pegged its currency to the US dollar since the middle of last year, which has meant that the renminbi has depreciated by about 9 per cent against the currencies of its main trading partners since early this year, even though the Chinese economy has rebounded more quickly than any other major economy. However, Chinese officials argue that its exchange rate against its trading partners is roughly in line with its level at the start of the global financial crisis in September last year, when the US dollar began to strengthen.
Chinese Premier Wen Jiabao said on Sunday that Beijing would not give in to foreign demands for its currency to strengthen, taking an increasingly defiant tone amid mounting international pressure for China to shift its exchange rate policy.
In an interview published by the Xinhua news agency on Sunday afternoon, Mr Wen said some of the demands for China to appreciate its currency were an effort to contain the country's development.
"We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the renminbi to appreciate, and on the other hand, you are taking all kinds of protectionist measures," he said.
By keeping the Chinese renminbi stable against the US dollar, China was contributing to the recovery in the global economy, he said. "The purpose [of these calls for appreciation] is to hold back China's development," he added.
China has effectively pegged its currency to the US dollar since the middle of last year, which has meant that the renminbi has depreciated by about 9 per cent against the currencies of its main trading partners since early this year, even though the Chinese economy has rebounded more quickly than any other major economy. However, Chinese officials argue that its exchange rate against its trading partners is roughly in line with its level at the start of the global financial crisis in September last year, when the US dollar began to strengthen.
This did not get enough press, but in early November, Chinese banks (top tier banks like Bank of China and Industrial and Commercial Bank of China) refused to fork over billions in collateral on dollar/yen FX trades which were out of the money after the yen's October appreciation. The headlines should have read (but didn't): "Chinese Banks say: STUFF IT." The Chinese banks won a game of drag race "chicken" with foreign banks. Most credit support annex agreements would say that closing out these trades would be an event of default, and then the cross default on all the trades would kick in with the same counterparty. But the credit of the Chinese banks was better than many of their counterparties, and they renegotiated contracts with the Chinese banks. Read more...
Read more...
China does not have to play Westworld's punk unless the CCP wants to. Diversity is the key to economic and political evolution.
Wen Pledges to Cool China Property Prices, Resist Yuan Pressure Chinese Premier Wen Jiabao said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at "reasonable" levels. "Property prices have risen too quickly in some areas and we should use taxes and loan interest rates to stabilize" them, Wen said yesterday in an online interview with the official Xinhua News Agency. China will "absolutely not yield" to calls for currency gains, he said. China's property prices climbed last month at the quickest pace since July 2008, adding to concern that record lending and inflows of money will inflate asset bubbles in the world's fastest-growing major economy. Central bank adviser Fan Gang said Nov. 18 that the nation needs to be on alert for stock, real-estate and commodity bubbles as global capital flows into emerging economies. Read more...
Chinese Premier Wen Jiabao said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at "reasonable" levels.
"Property prices have risen too quickly in some areas and we should use taxes and loan interest rates to stabilize" them, Wen said yesterday in an online interview with the official Xinhua News Agency. China will "absolutely not yield" to calls for currency gains, he said.
China's property prices climbed last month at the quickest pace since July 2008, adding to concern that record lending and inflows of money will inflate asset bubbles in the world's fastest-growing major economy. Central bank adviser Fan Gang said Nov. 18 that the nation needs to be on alert for stock, real-estate and commodity bubbles as global capital flows into emerging economies.
SNAFU (profile) wrote on Sun, 12/27/2009 - 2:17 pm I have been cut down for saying this before, but I will say it again: Balanced trade is ok, so no more than say 10%+/- with any country. Beyond that tariffs 100%. Otherwise we are po-house bound. You can assemble all the Nobel Economists you like, but the slide to the bottom will and is happening. India has more kids under 15 than the US population. China has 200 million people that are migrant labor. Need I say more? Sufficient capital is/will find where the cheap labor is, always! My 2c. [...] crazyv (profile) wrote (in reply to...) on Sun, 12/27/2009 - 2:55 pm SNAFU wrote:Need I say more? Sufficient capital is/will find where the cheap labor is [end] 16 years ago at conference in Washington D.C- I told Sen. Dorgan that advocates of free trade in the United States were just racists. Most people thought I had lost my marbles- but I went on to say that the conventional thinking was that the US could keep the high paying jobs while transferring the low paying jobs overseas what makes you think that the India's of this world will be content with just the low paying jobs and that they won't come after the high paying jobs as well? To believe that wasn't going to happen with pure racism. I don't think most people got it but a few did. Unfortunately I have been proven right- and as long we continue to believe in "American exceptionalism" at he expense of a hard look at our competitive situation we are going to get screwed.
I have been cut down for saying this before, but I will say it again:
Balanced trade is ok, so no more than say 10%+/- with any country. Beyond that tariffs 100%. Otherwise we are po-house bound. You can assemble all the Nobel Economists you like, but the slide to the bottom will and is happening. India has more kids under 15 than the US population. China has 200 million people that are migrant labor. Need I say more? Sufficient capital is/will find where the cheap labor is, always!
My 2c.
[...]
crazyv (profile) wrote (in reply to...) on Sun, 12/27/2009 - 2:55 pm
SNAFU wrote:Need I say more? Sufficient capital is/will find where the cheap labor is [end]
16 years ago at conference in Washington D.C- I told Sen. Dorgan that advocates of free trade in the United States were just racists. Most people thought I had lost my marbles- but I went on to say that the conventional thinking was that the US could keep the high paying jobs while transferring the low paying jobs overseas what makes you think that the India's of this world will be content with just the low paying jobs and that they won't come after the high paying jobs as well? To believe that wasn't going to happen with pure racism. I don't think most people got it but a few did. Unfortunately I have been proven right- and as long we continue to believe in "American exceptionalism" at he expense of a hard look at our competitive situation we are going to get screwed.
Possibly related descriptive statistics and other observations:
China-Profile, Gerhard K. Heilig, Austria Dec 2008, R&D competition April, 2008, contracting practices Diversity is the key to economic and political evolution.
