Chinese premier on improving RMB exchange rate mec

Chinese premier on improving RMB exchange rate mechanism
hxxp://english.peopledaily.com.cn/200409/28/eng20040928_158615.ht­ml

Ausschnitt:

Chinese Premier Wen Jiabao said Tuesday that China will adopt measures from a number of aspects to improve exchange rate mechanism of Renminbi (RMB), the Chinese currency, in a steady and appropriate manner.

Wen made the remarks during his meeting with Charles O. Prince,chief executive officer of the Citigroup and former US Secretary of Treasury Robert Robin in the Great Hall of the People in Beijing.

"We will further advance the reform and forge a mechanism which is more adapted to the changes in market supply and demand with still better flexibility," Wen said, acknowledging this reform represents a systematic project involving a host of aspects.

In this course, Wen added, numerous factors should be taken into account, including China's macro economic performance, social development, international income and expenditure; the progress of the reform on banking sector and progress of reforms in related spheres; and the economic and financial situation of neighboring countries and regions and of the world economy and finances.
......................
In recent years, China has done a lot of related work in improving the RMB exchange rate mechanism, Wen noted, citing the accelerated pace in the reform of State-owned commercial banks; convertibility under the RMB current accounts; steady relaxed restriction on capital accounts.

Those achievements also involves a more and steady opening of the capital market; an increase in the number of institutes from overseas in Chinese securities and stock market and foreign-funded enterprises; the easing of restrictions on financial market access and other related businesses, a rapid increase in the number of products and the scope of the financial market, he added.
.....................
RMB has been in a process of appreciating or devaluating against major international currencies ever since 1994, when China started the reform of RMB exchange rates, he recalled. And the floating range was relatively greater in the four years preceding 1997.

Since 1998, to cope with the Asian financial crisis, The Chinese government, in a responsible manner, kept the commitment not to devaluate RMB and narrowed the floating range of the RMB exchange rate, thus contributing to the stability and development of finance and economy of Asia and the world at large, Wen said.

"During my visit to the United States last year," Wen said, "President George W. Bush and I reached five consensuses on Sino-US economic and trade issues with the core of development, equality and mutual benefit."

At present, the overall momentum in the development of Sino-US ties was good and bilateral trade and economic cooperation kept moving forward, Wen said, voicing the hope that the two sides will follow the above mentioned guidelines to maintain the sound and stable growth of trade and economic relations.

China wurde von der G-7 eingeladen (Russland wird nicht kommen wenn China involviert ist) - dieses ist kein Witz, seitdem die G-7 es ablehnen die Wichtigkeit von China, Russland und Indien anzuerkennen und ihnen nicht die volle Mitgliedschaft einräumen.

...aber dieses ist eine andere Sache...

Der IMF, Finanzminister Snow geben den vollen Druck auf China und den Ölpreisen bei dem bevorstehenden Treffen von dem IMF, jetzt sind es aber das aufgeblähte US Current Account Defizit, das Trade Defizit und das Budget Defzit die die Hauptpunkte unter den globalen Ungleichgewichten sind.

1.) China hat heute einen Lippendienst geleistet über die Neubewertung von dem RMB, weil es nicht in ihrem Vorteil liegt, diese zu tun. Beachtet dabei wie verantwortlich China während der asiatischen Währungskrise war.

2.) China hatte global ein Trade Defizit

3.) China ist nicht überglücklich mit der Außenpolitik der USA im Bezug auf Taiwan und ihrer letzten Ankündigung Waffen der USA an Taiwan zu verkaufen.

4.) China ist gegen die aktuelle Außenpolitik der USA und ihrem imperialistischen Ehrgeiz.

5.) China wird verlangen das die USA ihr Embargo auf hoch entwickelte Computer enfernen.

In anderen Worten stehen aktuell die Dinge zum Vorteil von China und es ist zu bewzeifeln, ob sie irgendetwas von diesen für sie sprechenden Punkten aufgeben werden.  

Global: Stop Bashing China

Stephen Roach (New York)


The world economy is in tough shape. Unfortunately, that’s when the blame-game usually starts – a search for scapegoats who can be held accountable for the problems of others. China has emerged as the scapegoat du jour, blamed for a wide range of troubles that now ail the world. Whether cast in the role as the source of global deflation or as the magnet of job creation, China is increasingly viewed as a negative force in the world economy. Yet nothing could be further from the truth. The transition and development of the Chinese economy, in my view, continues to represent a huge plus for the world at large.

mehr:

hxxp://www.morganstanley.com/GEFdata/digests/20021213-fri.html  

Keep RMB stable-for now

Ausschnitt:

But in the face of this mounting pressure on the renminbi, at least one point needs to be clarified: China's exchange rate policy is not the cause of global deflation and revaluing the renminbi will not ease deflation.

Despite its vigorous growth, China's GDP is only 3.5 per cent of the world's. China's trade takes up a mere 5 per cent of total global trade volume.

Multinational companies choose China because they are eyeing its huge market and its economic progress rather than the under-valued currency here.

Their choice is also why there is a rising trade deficit between the United States and China. The US used to import Asian products from Japan, the Republic of Korea and China's Taiwan Province. As the international industry giants move their manufacturing bases from these countries and regions to China, China sees more trade surplus to the US and with it, more trade deficit to these economies.

China's robust growth has played a key role in lifting the economy, both of the world and of East Asian countries, out of the financial crisis of the late 1990s. This growth could be delayed by an appreciation of the renminbi and East Asia could suffer economic turmoil.

In fact, a revaluation of the renminbi would not have a particularly good influence on the economic recoveries of the US, Japan or Europe, a stance Goldman Sachs supports.

In other words, if the renminbi were raised under the wrong conditions, it would not benefit any other country - while China would have to suffer huge shocks in different sectors within the country.
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But revaluing renminbi hastily or dramatically would have negative effects on the Chinese economy, which must not be overlooked.

First, the manufacturing sector could see remarkable damage. China's competitive advantage in the manufacturing sector is in its low labour costs.

Exports would suffer from a rapid rise, and in the agricultural industry, cheaper imports would take an upper hand over domestic crops, with relatively reduced prices.

The direct aftermath would be a large-scale migration of farmers, especially those in eastern areas, into the cities and towns.

mehr:

hxxp://www.chinadaily.com.cn/english/doc/2004-09/03/content_371248.htm  

Steven Roach hat schon mehrere Male kommentiert, das China zm Sündenbock gemacht wurde für "US's growing imports propensity" und ein Zitat von Roach:

"That’s an unfortunate by-product of one of the greatest flaws of today’s US economy – it’s pathetically low saving rate. America’s net national saving rate – businesses, households, and the government combined (adjusted for depreciation) – stood at a record low of 2% of GDP in 3Q02. That compares with a 5% average in the 1990s and 11% in the 1960s. Since saving must always equal investment, that means the US must import surplus saving from abroad in order to finance the investment underpinnings of economic growth. And it must, therefore, run the current-account and trade deficits that are needed to attract such capital. That’s what drives Chinese imports as much as anything. In that critical context, it’s hard to blame China for America’s penchant to live beyond its means."

In anderen Worten, Handelsdefizite sind eine Merkmal für schnell wachsende, nicht-sparende Volkswirtschaften wie die USA.

Als ein Goldinvestor haben wir einen Tribünenplatz für die größte Show auf Erden und die Clowns bei dem IMF sind insgesamt sehr unterhaltsam.

Der IMF, alle Finanzminister gratulieren sich selber dazu einen früheren freien Fall von dem US-$ in diesem Jahr vermieden zu haben - und der US-$ wurde mit der Hilfe von Japan unterstützt, in der Größenordnung von US-$ 200 - 300 Milliarden.

Alles was sie erreicht haben war eine Aufschiebung von dem unvermeidbaren freien Fall von dem US-$ - ein geordneter. kontrollierter freier Fall von dem US-$ oder ein Zusammenbruch von dem US-$. Der US-$ ist überberwertet seitdem

- sich das Budget Defizit auf einem Rekordhoch befindet
- das Current Account Defizit sich auf einem Rekordhoch befindet und
- das Trade Defizit sich auf einem Rekordhoch befindet und sich die Erholung von der US-Wirtschaft verlangsamt hat.  

meint?

Did he say this in China? Any connection? To help sway votes Kerry must proclaim Reich's thesis and the bad news must happen, prior to the election. At least two weeks prior if it going to happen and impact votes.


Former Clinton advisor, Robert Reich stated last week that he sees the U.S. dollar heading for a downfall but for reasons beyond just debt alone. Reich believes that U.S. foreign policy is alienating traditional allies and the already slumping dollar will head for a collapse.

Reich stated at a global business forum last week that the U.S. dollar is fast reaching a point at which foreign investors will abandon it and send it into a freefall.

The U.S. requires a daily infusion of $1.2 billion in foreign investment just to keep the greenback decline under control, he said.

Reich, who is also an informal advisor to John Kerry is also concerned that Asian banks may soon consider the U.S. dollar a bad investment and pointed out that many global investors are already doing business in Euros, not U.S. dollars.

"If you embark on a unilateral foreign policy and the rest of the world is upset with you that has a boomerang effect on your global businesses. So not only does fiscal policy matter, but your foreign policy cannot be completely divorced from your national economic policy."

The bottom line is that the U.S. dollar is going down. It will either go down in an orderly fashion as it has been or it could collapse as Reich has pointed out.

As I pointed out two weeks ago, the best thing that could happen is that the status quo is maintained with foreign purchases of U.S. debt. Without that, the fall of the U.S. dollar will be very swift indeed.

It's hard to say exactly how this faith based, fabricated money system will eventually change the state of the nation over the long term. I'm not optimistic, but I can tell you one thing for sure. The U.S. dollar will be going down over the short term and gold will move up.

Be prepared.

Owning some positions in gold assets is mandatory in this perilous environment.

Sept 29, 2004
Bill Ridley
Contact
Website: www.jameswinston.com/  

Goldman sees metals boom going on
Worries about China construction slowdown 'overblown'
By Leslie Wines, CBS.Marketwatch.com
Last Update: 6:41 PM ET Sept. 29, 2004

NEW YORK (CBS.MW) -- China's building boom is spurring an extended positive cycle for the metals industry, Goldman Sachs said Wednesday, adding that worries about a construction slowdown in 2005 there are overblown.

Following a recent visit to China, Goldman analysts say they believe the metals industry is not due for a frequently predicted hard landing, but instead will see an extension of its current positive cycle.

Its favored picks for capitalizing on the metals boom include Alcan (AL: news, chart, profile), which closed 9 cents off Wednesday at $47.15; Alcoa (AA: news, chart, profile), which was up 55 cents to $33.15; and Freeport-McMoran (FCX: news, chart, profile), down $2.08 to $39.87.

Goldman also likes Newmont (NEM: news, chart, profile), which slipped a penny to $44.28, and Placer Dome (PDG: news, chart, profile), 37 cents lower at $19.24.

The firm repeated an overall "attractive" rating for metals.

"New data from our recent China trip suggest continued above-trend demand growth, infrastructure bottlenecks that limit metal supply growth and inventories falling to critically low levels," Goldman said.

Metal market participants in China so far see little evidence of a slowdown in metal consumption trends and expect monthly year-over-year demand growth rates to remain in the 15 percent to 20 percent range for the rest of 2004, according to Goldman Sachs.

Concerns over a weaker construction project pipeline in 2005 have eased after the approval of 94 percent of previously frozen Chinese investment projects collectively worth $2 trillion, according to Goldman Sachs.

Other factors which should help U.S. and global metals producers include the cancellation of several large smelter expansions in China and the current tendency of Chinese companies to focus capital on consolidation, the firm said.

In addition, China's government plans to toughen measures to shut down more capacity, Goldman Sachs added.
 

Beluga, Foie Gras Top G-7's Agenda
Rick Ackerman
Oct 01, 2004
hxxp://www.321gold.com/editorials/ackerman/current.html

 

China recommits to flexible yuan
No date set for change to currency policy
hxxp://www.marketwatch.com/news/...0-8CB3-E6E48B422957}&siteid=mktw&dist=bnb

By Rex Nutting, CBS.MarketWatch.com
Last Update: 11:20 AM ET Oct. 1, 2004  

WASHINGTON (CBS.MW) -- Chinese finance officials repeated Friday their commitment to move toward a flexible, market-based foreign exchange rate but didn't outline specific plans to do so after consultations with U.S. economic officials Thursday.  

G7 fails to reach debt deal
Developed nations fail to act on relief proposal for impoverished countries.
October 2, 2004: 8:12 AM EDT

WASHINGTON (Reuters) - Hopes of a deal to write off completely the debts of some of the world's poorest countries were dashed after the Group of Seven rich nations club failed to reach agreement.

Charities and aid agencies had been excited by the prospect of 100 percent multilateral debt relief for many impoverished nations after the United States proposed such a move ahead of the G7 finance ministers' meeting in Washington.

Britain has already pledged £100 million a year to pay off 10 percent of the debt owed by some 30 poor countries to the World Bank and African Devlopment Bank and it had called on fellow G7 members to follow its lead.
But in the end the G7 did little more than promise to address "the sustainability of debt of the poorest countries by making progress on debt relief and grant financing" as France and Germany, in particular, resisted the U.S.-U.K. appeal

"G7 finance ministers have failed to join together to match the action on debt taken by the UK," said Oxfam policy adviser Max Lawson.

"Once again rich countries have turned up with their notebooks not their checkbooks and the price will be paid by the world's poorest people."

Action Aid policy adviser Patrick Watt said the each day of delay by the G7 left poor countries paying out $100 million that could be spent on health and education."

But British Finance Minister Gordon Brown said earlier Friday he was optimistic his proposal to use International Monetary Fund gold reserves to write off multilateral debt would over time win support.
Some optimism

"I think there is a big chance we can make progress over the next few weeks," he said.

Most IMF gold is valued at just $40 an ounce under a 1971 agreement, though some was revalued at market prices in the late 1990s to finance the Highly Indebted Poor Countries debt relief initiative.

Brown's plan is to revalue on paper the IMF gold toward its current market price of around $400 an ounce to pay for debt relief. But Canadian finance minister Ralph Goodale said the British plan had little chance of getting off the ground.

"There are significant issues with the issue of gold revaluation. Quite frankly, unless there's something in this that we don't fully understand yet, that would appear to us to be a bit of a non-starter," Goodale told Reuters.

The U.S. has not specified how its proposal for debt relief would be paid for. But France said neither the U.S. nor the British plans would resolve the real problem.

"There is a British proposal on the table, and an American proposal. They are interesting proposals. But we think debt relief is not the only solution," said French finance minister Nicholas Sarkozy.

"What we want are real, supplementary ways to help these countries ... and we especially want to give this money to the countries to form education programs and socialization programs and not simply give it to the banks."

The IMF did agree Thursday to extend the global debt relief program for poor countries by two years to 2006.  

U.S. companies contend China's practice has produced a yuan that is as much as 40 percent undervalued against the dollar.

China refused in discussions with the United States and also in broader talks with G-7 officials to say when it might stop linking the yuan to the U.S. dollar. The Chinese pledged only to "push ahead firmly and steadily to a market-based flexible exchange rate."

Many private economists believe it could be years before China is willing to give up the trade benefits it enjoys from a tightly controlled exchange rate that makes its products as much as 40 percent cheaper than American-made goods. The U.S. trade deficit with China soared to a record $124 billion last year.