FT.com / Home UK – China tells US to put its house in order — Meanwhile a few years ago you could buy one Euro for 80-cents. Now one Euro costs $1.30! Rumors that we will devalue our currency abound too. I expect more lectures from the Chinese and we’ll have zero sympathizers since we alienated everyone.
China’s central bank has signalled the country’s growing economic confidence by offering blunt advice to Washington about its ballooning trade deficit and saying China would not be rushed into revaluing its currency.
In an interview with the Financial Times, Li Ruogu, the deputy governor of the People’s Bank of China, warned the US not to blame other countries for its economic difficulties.
“China’s custom is that we never blame others for our own problem,” said Mr Li. “For the past 26 years, we never put pressure or problems on to the world. The US has the reverse attitude; whenever they have a problem, they blame others.”
> “Few people even in the banks know derivatives and how to use them,” he said.
This is hilarious and ridiculous. Their bankers don’t even know how to bank! It’s totally true, they don’t even know what risk is. Their was a Special Report in the Economist on Chinese banking reform in the last month.
They’re a Communist country that’s artificially controlling the currency — and everything else about the economy — through fiat. Perhaps when markets in China make decisions about the cost of capital, the cost of labor, the cost of raw materials, Mr. Li can lecture us. If they floated their currency like everyone else, then it would balance itself, and we wouldn’t have anything to complain about.
On the other hand, I just saw the FRONTLINE “Is Wal-Mart good for America?”. Look at the $120 Billion we buy from China per year, and they buy $3 Billion from us. Why? Because of the specific strategies of retailers setting up shop in China and training Chinese businessmen/sweatershop-owners how to pay their people $0.50 an hour and make products for the American market. Then on the 3 Billion side: what are the Chinese going to buy from us? 110 Billion dollars worth of 747s? They don’t have any money. I mean the Chinese people, not the Chinese government. Maybe they could give each of the party officials a personal jet. (Then they would inefficiently guzzle even more oil!)
We should not artificially stem the tide. Let the market work, but in its normal, gradual way. Wal-Mart should be called out on the mat for enormously accelerating the movement of manufacturing to China. Of Wal-Marts’ 6000 suppliers, 80% are in China. Mom-and-pop shops or not, that is ridiculous.
BTW, John, the Euro opened at $1.15 in 1999, so it’s not that big a difference. Unless you’re travelling there or buying German appliances for your new kitchen, it mostly favors the US.
Isn’t our debt in dollars? Doesn’t that mean that effectively we owe less to other nations, hah hah hah.
Poor countries don’t have the coin to buy things so China isn’t going be importing much for years to come.
[I used the word “coin” to be trendy and cool, that is the “in” word that cool people use for money … LOL]
We should trade with China as much as they are willing to. What China doesn’t realize that is that with their arcane language and their “China is the center of universe” quasi-religion [they believe there are “Han People” and everyone else is barbarians], they will never be deeply integrated with the rest of the world like the West is.
China can talk smack, but they can’t walk the walk.
Btw … China is the dead opposite of the West and the Middle East and always has been. Convert to Islam or convert to Christianity and you are one of us, said the great empires of the Middle East and of Europe respectively. This flexibility allowed the West and the Middle East to culturally permeate large portions of the world. The West’s message evolved in the last 50 years to “Convert to Democracy”. The United States exports Americanized foreign nationals to generate a large network of foreign market penetration. China will never be able to do this, they don’t value diversity. This is obvious as China wears it’s ego on it’s sleeve, always so desperate to appear important, but never actually being so. The cheap shoes can be made in any 3rd world country.
China’s mentality will forever prohibit scientific discovery or being bleeding edge in anything. The fact that they have the growing capacity to create products up to the quality standards that the rest of the world would want to buy them is something that China should be quite proud of. They have finally caught up to where Taiwan and Japan were in the 1970’s.
As far as agriculture goes and China saying that the US shouldn’t be in agriculture … isn’t China the country where 20 million people starved in the 1950’s because they couldn’t grow enough food to feed themselves.
Until China develops the safety standards to keep SARS out of the food — no thanks! China should work on their sanitation issues (children with split crotch pants, men hocking SARS loogies everywhere) before setting sights on getting in on the food industry.
Hmm..so I can assume from this post that you’ve never been to China to see what’s really going on and actually have no clue. Good to know.
Don’t worry too much about a week dollar John. I’ve been earing complaints against a strong Euro here in “Europe”.
“Don’t worry too much about a week dollar John. I’ve been earing complaints against a strong Euro here in “Europe”.”
sorry! I’ve misspelled “weak” and “hearing”… 🙂