Re China Stand on Imports Upsets U.S. by Steven R. Weisman in today's NY Times: again, China says one thing to US trade negotiators, and then does the opposite. Actions speak louder than words, and China's actions (not to mention its enormous trade surplus against the US) show clearly that it does not trade fairly.
The solution to this problem is for the US to exit the WTO, and put large tariffs on goods and services from China. I can guarantee that would get their attention, and also gain their respect. They have little respect for us because of our self-defeating foreign policies (e.g., Iraq) and trade policies (help the rest of the world at our own expense).
I believe that Ron Paul is the only candidate who would take us out of the WTO. We can only hope that this idea will catch on, sooner than later.
Showing posts with label China. Show all posts
Showing posts with label China. Show all posts
Friday, November 16, 2007
Thursday, October 25, 2007
China's Future
The subtitle is "NY Times Reporter Should Take Econ 101".
Re China Says Economy Grew 11.5% by Keith Bradsher in today's NY Times:
Quotes from the article:
"The temptation to buy stocks or property or spend on consumer goods — retail sales were up 17 percent in September from a year earlier — has increased as bank depositors have found themselves earning regulated interest rates as low as half the inflation rate."
...
"Through massive purchases of dollars and other currencies, as well as by easing restrictions on overseas investments by Chinese citizens, China has greatly slowed the appreciation of its currency and maintained a competitive advantage over other Asian nations."
...
"China has controlled the overall rise in consumer prices partly by freezing all government-set prices, notably for gasoline, water, electricity and natural gas. The freeze began Sept. 19 and is to last until at least until the end of this year. On Sept. 19 the government’s National Development and Reform Commission also banned any increases in the maximum allowed prices for medicines, air and rail trips and certain agricultural commodities like wheat, rice and cotton."
...
"Price controls, a tactic tried and discarded in the United States in the 1970s, run the risk of temporarily tamping down inflationary pressures that later burst out with even greater force."
So far, so good. But here comes the error:
"China is hoping that deflationary pressures, like the country’s massive investments in everything from highways to new factories, will soon offset higher food prices."
Sorry, but massive government spending is not deflationary, it is the opposite: inflationary.
The rapid growth of the Chinese economy is destined to end badly. No one can predict exactly how or when it will end, but it is very easy to see that it cannot be sustained.
My educated guess is that inflation in China will be the trigger, as opposed to the accumulated American trade deficits with the rest of the world. It is a lot easier for the efficient currency markets to make gradual adjustments in the value of the dollar, than it would be for the Chinese command economy to deal with exploding inflation. Also, the American economy seems to be benefiting, on net, from cheap goods and services from China, whereas it is hard to see how the building inflation in China can end peaceably.
My way-out guess is that runaway inflation in China will lead to massive social unrest in the years to come, and that unrest will outpace any movement toward a liberal democracy. Therefore, China will eventually break up into smaller, more manageable pieces (countries).
Re China Says Economy Grew 11.5% by Keith Bradsher in today's NY Times:
Quotes from the article:
"The temptation to buy stocks or property or spend on consumer goods — retail sales were up 17 percent in September from a year earlier — has increased as bank depositors have found themselves earning regulated interest rates as low as half the inflation rate."
...
"Through massive purchases of dollars and other currencies, as well as by easing restrictions on overseas investments by Chinese citizens, China has greatly slowed the appreciation of its currency and maintained a competitive advantage over other Asian nations."
...
"China has controlled the overall rise in consumer prices partly by freezing all government-set prices, notably for gasoline, water, electricity and natural gas. The freeze began Sept. 19 and is to last until at least until the end of this year. On Sept. 19 the government’s National Development and Reform Commission also banned any increases in the maximum allowed prices for medicines, air and rail trips and certain agricultural commodities like wheat, rice and cotton."
...
"Price controls, a tactic tried and discarded in the United States in the 1970s, run the risk of temporarily tamping down inflationary pressures that later burst out with even greater force."
So far, so good. But here comes the error:
"China is hoping that deflationary pressures, like the country’s massive investments in everything from highways to new factories, will soon offset higher food prices."
Sorry, but massive government spending is not deflationary, it is the opposite: inflationary.
The rapid growth of the Chinese economy is destined to end badly. No one can predict exactly how or when it will end, but it is very easy to see that it cannot be sustained.
My educated guess is that inflation in China will be the trigger, as opposed to the accumulated American trade deficits with the rest of the world. It is a lot easier for the efficient currency markets to make gradual adjustments in the value of the dollar, than it would be for the Chinese command economy to deal with exploding inflation. Also, the American economy seems to be benefiting, on net, from cheap goods and services from China, whereas it is hard to see how the building inflation in China can end peaceably.
My way-out guess is that runaway inflation in China will lead to massive social unrest in the years to come, and that unrest will outpace any movement toward a liberal democracy. Therefore, China will eventually break up into smaller, more manageable pieces (countries).
Tuesday, October 16, 2007
China Tantrums
It seems that super-sensitive China is taking another tantrum. This time it is because President Bush is meeting with the Dalai Lama and because the Dalai Lama is scheduled to receive the Congressional Gold Medal on Wednesday. (See today's NY Times article China Warns U.S. on Dalai Lama Trip By JOSEPH KAHN.) Not only did Tibet’s Communist Party boss say he is furious, but four fifteen year old Tibetan boys are being tortured with electric prods "after they were accused of scribbling slogans on walls calling for the Dalai Lama’s return".
I am "furious" with China's leaders and demand that they renounce their stupid ideology and join the grown-up, civilized nations of the twenty-first century.
Perhaps China should be expelled from the World Trade Organization. If the WTO does not expel China, perhaps the US should leave the WTO and make separate, fair trade deals with nations which are more civilized than China.
I am "furious" with China's leaders and demand that they renounce their stupid ideology and join the grown-up, civilized nations of the twenty-first century.
Perhaps China should be expelled from the World Trade Organization. If the WTO does not expel China, perhaps the US should leave the WTO and make separate, fair trade deals with nations which are more civilized than China.
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