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China: Crunch Time (Read 6497 times)
tallowood
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China: Crunch Time
Mar 30th, 2010 at 11:33pm
 
It isn't just GOOGLE

Quote:
U.S.-Chinese relations have become tenser in recent months, with the United States threatening to impose tariffs unless China agrees to revalue its currency and, ideally, allow it to become convertible like the yen or euro. China now follows Japan and Germany as one of the three major economies after the United States. Unlike the other two, it controls its currency’s value, allowing it to decrease the price of its exports and giving it an advantage not only over other exporters to the United States but also over domestic American manufacturers. The same is true in other regions that receive Chinese exports, such as Europe.

What Washington considered tolerable in a small developing economy is intolerable in one of the top five economies. The demand that Beijing raise the value of the yuan, however, poses dramatic challenges for the Chinese, as the ability to control their currency helps drive their exports. The issue is why China insists on controlling its currency, something embedded in the nature of the Chinese economy. A collision with the United States now seems inevitable.

http://www.stratfor.com/weekly/20100329_china_crunch_time?utm_source=GWeekly&utm_medium=email&utm_campaign=100330&utm_content=readmore&elq=22b40070a47041e187444a7108de8aad

Will you be ready when it comes?

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muso
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Re: China: Crunch Time
Reply #1 - Mar 31st, 2010 at 9:15am
 
If they raise the Renmin bi it will impact Chinese exports in a major way, and at least short-term, we'll have a lot more Chinese tourists who can suddenly afford to come here.

The low valuation is one of the reasons for their success.
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tallowood
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Re: China: Crunch Time
Reply #2 - Mar 31st, 2010 at 9:20pm
 
I doubt that number of Chinese tourists (from mainland) would increase dramatically as affordability is not the only issue there. The country's communist government fears an exposure of its citizens to information available outside of the great wall as Google filtering saga has shown.
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NorthOfNorth
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Re: China: Crunch Time
Reply #3 - Apr 1st, 2010 at 3:27am
 
tallowood wrote on Mar 31st, 2010 at 9:20pm:
I doubt that number of Chinese tourists (from mainland) would increase dramatically as affordability is not the only issue there. The country's communist government fears an exposure of its citizens to information available outside of the great wall as Google filtering saga has shown.

True. But as the Chinese become more affluent, attempts to limit the people's access to all the world will become increasingly quixotic and futile.
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muso
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Re: China: Crunch Time
Reply #4 - Apr 1st, 2010 at 9:22am
 
tallowood wrote on Mar 31st, 2010 at 9:20pm:
I doubt that number of Chinese tourists (from mainland) would increase dramatically as affordability is not the only issue there. The country's communist government fears an exposure of its citizens to information available outside of the great wall as Google filtering saga has shown.


We already have a lot of Chinese tourists here in Queensland. I don't know what the numbers are like compared to Japan.

http://au.china-embassy.org/eng/ly/t57286.htm

Quote:
In 2002, 190,000 Chinese visitors travelled to Australia, representing 4 per cent of all of its inbound tourism. It was the first country to be granted ADS status by China.


Just walking around Southbank in Brisbane when I visit, I hear more obvious tourists speaking Chinese (and also Korean) nowadays than Japanese.
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tallowood
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Re: China: Crunch Time
Reply #5 - Apr 1st, 2010 at 9:52am
 
Assuming that all these tourists are from mainland we can see that this number is less then drop of water in ocean comparing to total population of mainland China. I also would bet that they passed the ideology check.

Anyway financial analysts believe that Chinese currency is undervalued as much as 20-40% and also that increase of the value by 7% would have dramatic effect on Chinese exports, which would translate into unemployment and massive social disorder, which Chinese government is very afraid of.

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Re: China: Crunch Time
Reply #6 - Apr 1st, 2010 at 10:08am
 
I know an old couple who take in Asian students learning English and the few mainland Chinese students they have had were all ideologically "sound" and most were the children of Communist Party seniors (not the top leadership, but significant regional seniors).
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tallowood
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Re: China: Crunch Time
Reply #7 - Apr 1st, 2010 at 10:21am
 
Meantime USA government is also under political pressure.

Quote:
... President Barack Obama faces intense political pressure to label China, in a semi-annual report slated for April 15, as a currency manipulator for keeping the yuan artificially weak, making it hard for U.S. firms to compete.

Not mentioning the currency policy in the USTR report could upset congressional Democrats who want the Obama administration to pressure Beijing on the issue, said Scott Lincicome, a trade lawyer with White & Case in Washington. ...


http://www.nytimes.com/reuters/2010/03/31/us/politics/politics-us-trade-usa-chin...
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tallowood
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Re: China: Crunch Time
Reply #8 - Apr 5th, 2010 at 11:19am
 
Information flaw control in China is ridiculous.

Quote:
...Dylan had been blocked by the Chinese government.
...
Permits for musicians to play on the mainland have been tightly controlled since Bjork, the Icelandic singer, enraged the authorities in Shanghai two years ago by shouting out "Tibet! Tibet!" at the end of her song: Declare Independence.

The Culture ministry said Bjork's performance had "hurt the feelings of the Chinese people".  


http://www.telegraph.co.uk/culture/music/bob-dylan/7553165/China-blocks-Bob-Dyla...

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Re: China: Crunch Time
Reply #9 - Apr 5th, 2010 at 11:50am
 
China Crunch.

Sounds like a good name for a confectionery bar.

A tasty selection of Shanghai's finest beetles and roaches, carefully roasted then covered in rich creamy milk chocolate.

Mmmm... derrishous...

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Re: China: Crunch Time
Reply #10 - Apr 5th, 2010 at 12:36pm
 
I think the China cat is out of the bag. The authorities can slow it down, but they can't stop it. Remember, this is a country of humble people who occasionally turn on their leaders and eat them. About the only thing that could actually stop the march of freedom and democracy in China is a return to grinding poverty.
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Re: China: Crunch Time
Reply #11 - Apr 5th, 2010 at 12:43pm
 
freediver wrote on Apr 5th, 2010 at 12:36pm:
About the only thing that could actually stop the march of freedom and democracy in China is a return to grinding poverty.

Which, ironically, the Chinese Communist Party are determined to eradicate (poverty, that is).
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Re: China: Crunch Time
Reply #12 - Apr 5th, 2010 at 12:45pm
 
For communists, they are actually doing a remarkable job. But there is a limit to how far they can take it without giving up control.
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Re: China: Crunch Time
Reply #13 - Apr 5th, 2010 at 2:07pm
 
freediver wrote on Apr 5th, 2010 at 12:45pm:
For communists, they are actually doing a remarkable job.

Maybe they're doing it by dismantling communism and replacing it with good old fashioned Confucian authoritarianism.
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Re: China: Crunch Time
Reply #14 - Apr 5th, 2010 at 6:59pm
 
Are you confusing economic and political models?
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