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Showing posts with label china. Show all posts
Showing posts with label china. Show all posts
Newest Fox News Piece: The China Currency Bill Will Make Americans Poorer, Not Richer

Newest Fox News Piece: The China Currency Bill Will Make Americans Poorer, Not Richer

My newest piece starts this way:

We seem determined to repeat the policy mistakes that made the 1930s Great Depression so deep. Already we have seen the massive increases in government spending and regulation. Today's vote on the China currency bill by the Senate adds another mistake. It resembles the infamous 1930 Smoot-Hawley tariff law.

True, China is manipulating its currency to lower the value of the Yuan relative to the US dollar. This manipulation makes it cheaper for Americans to buy their exports, be it toys, furniture, or manufactured goods. It also makes it cheaper for us to purchase whole companies or shares in Chinese companies. It also means that the Chinese have to pay “too” much for American bonds and American products.

If passed, the Currency Exchange Rate Oversight Reform Act of 2011 would force China to raise the value of the Yuan. And if they refuse to comply, we will increase the tariffs on what we buy from them, equivalent to putting a special tax on the goods we buy.

China’s currency manipulation is a mistake. Yet, their mistake doesn’t mean we should make one also. If Chinese leaders are stupid enough to subsidize Americans by selling their goods and assets too cheaply, why should we stop them? . . .
The China currency mess

The China currency mess

If China wants to subsidize our purchases of their goods, that is fine with me. Where China is getting its wealth is from stealing our intellectual property, not from selling us their products at below cost. The Obama administration isn't doing what is right and oppose the new law being debated this week in the Senate. Unfortunately, the initial vote yesterday only had 16 Republicans and 3 Democrats opposing penalties on China for a low exchange rate. From the Financial Times:

The chairman of the US Federal Reserve has accused China of damaging prospects for a global economic recovery through its deliberate intervention in the currency market to hold down the value of the renminbi.
Speaking just hours after the Chinese government sharply criticised a US congressional bill that would punish Beijing for alleged currency manipulation, Ben Bernanke told a congressional committee that an undervalued renminbi was preventing the rebalancing of global demand towards emerging market economies.
“Right now, our concern is that the Chinese currency policy is blocking what might be a more normal recovery process in the global economy,” he said. “It is to some extent hurting the recovery”.
The US Senate voted overwhelmingly on Monday to open debate on a bill, clearly aimed at China, that would impose tariffs on imports from countries with undervalued currencies. On Tuesday, the Chinese government blasted the bill in three statements released simultaneously by the foreign ministry, the central bank and the ministry of commerce, saying the legislation could spark a “trade war”. . . .
So how well has China's economic planning worked?: Ask the Chinese

So how well has China's economic planning worked?: Ask the Chinese

The WSJ has this:

. . . One speaker from South Africa breathlessly described the Chinese economic system of state-capitalism as “crisis-proof,” and said it was shifting the debate over economic models on the African continent. A French corporate executive was overheard lauding the merits of China’s Five-Year plans. Not perfect, he conceded, “but better than no plan at all – which is what we have in France.”

It took a Chinese speaker to bring the gathered ranks . . . down to earth at Summer Davos.

At a panel discussion on China’s latest Five-Year plan on Thursday, Zhang Weiying, an economics professor at Peking University, first noted that China routinely misses the important economic targets set out in its Five-Year plans by a wide margin (usually on the upside). Then he took a swing at the bureaucrats at the National Development and Reform Commission who devote vast amounts of time to producing the country’s economic blueprints. They are, he said, “a bunch of smart people doing something really stupid.”

Prof. Zhang went on to dismiss the massive stimulus spending that powered China through the global recession, also coordinated by the NDRC. Stimulus money can’t buy development, he said: that takes a commitment to markets, competition and entrepreneurship, which won’t happen while the NDRC calls the shots in the economy. In short, Prof. Zhang argued, China needs reform.

Prof. Zhang was undaunted by the fact that sitting on his panel was one of China’s top planning mandarin . . . who it’s safe to say is more used to dishing out criticism than taking it.

Zhang Xiaoqiang offered a spirited defense of the most powerful economic agency in China, but the audience seemed to be with Prof. Zhang as he warmed to his theme. Since the NDRC was established, he said, the pace of reform “has seriously slowed down.” . . .
Is China's economy growing so quickly because it is willing to steal intellectual capital from others?

Is China's economy growing so quickly because it is willing to steal intellectual capital from others?

This story from Fox News shows just how far Chinese companies are willing to go. How long do you think that this would be allowed to occur in the US, Canada, Japan, or the EU?

At first, it looks like a sleek Apple store. Sales assistants in blue T-shirts with the company's logo chat to customers. Signs advertising the iPad 2 hang from the white walls. Outside, the famous logo sits next to the words "Apple Store."
And that's the clue it's fake.
China, long known for producing counterfeit consumer gadgets, software and brand name clothing, has reached a new piracy milestone -- fake Apple stores.
An American who lives in Kunming in southern Yunnan province said Thursday that she and her husband stumbled on three shops masquerading as bona fide Apple stores in the city a few days ago. She took photos and posted them on her BirdAbroad blog.
The three stores are not among the authorized resellers listed on Apple Inc.'s website. The maker of the iPhone and other hit gadgets has four company stores in China -- two in Beijing and two in Shanghai -- and various official resellers. Apple's Beijing office declined to comment.
The proliferation of the fake stores underlines the slow progress that China's government is making in countering a culture of a rampant piracy and widespread production of bogus goods that is a major irritant in relations with trading partners.
China's Commerce Minister promised American executives earlier this year that the latest in a string of crackdowns on product piracy would deliver lasting results.
The 27-year-old blogger, who spoke on condition of anonymity, said the set-up of the stores was so convincing that the employees themselves seemed to believe they worked for Apple.
"It looked like an Apple store. It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue T-shirts with the chunky Apple name tags around their necks," she wrote on her blog.
"But some things were just not right: the stairs were poorly made. The walls hadn't been painted properly. Apple never writes 'Apple Store' on its signs -- it just puts up the glowing, iconic fruit."
A worker at the fake Apple store on Zhengyi Road in Kunming, which most of the photos of the BirdAbroad blog show, told The Associated Press that they are an "Apple store" before hanging up. . . .

My newest Fox News piece: "Playing Chicken With China, why huge increases in the money supply didn't increase inflation"

My newest Fox News piece starts this way:

The Federal Reserve has already injected hundreds of billions of new dollars into the economy since the recession started. Normally, when the government prints up more money, dollars are worth less and that is what we call inflation. But inflation has been surprisingly low.

One measure of the money supply, M1, which includes currency as well as checking accounts, soared by 26 percent between August 2008 and September this year. The amount of currency more than doubled. But prices barely changed.

As Fed Chairman Ben Bernanke goes forward with plans to print up another $880 billion, someone has to ask why the past increases didn't produce the inflation that everyone thought they would.

So where did all that new money go? Many blame businesses for hoarding cash. Obama recently said: “corporate profits are doing just fine. [But] they're holding onto a whole bunch of cash -- they're kind of sitting on it.” . . .


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