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Sign up with Google Sign up with FacebookQ: How do you see the outcome of this new currency war between China and the USA
12 years 24 weeks ago in Relationships - China
china yuan will go higher against american dollar, dollar is dropping USA is having 4.5M population jobless how can they recover it easily......
its all game for power nothing else keeping it under valued keep it rocketing price nothing happens to elite class or big wig they run the law and rules so what the problem for them i know they did earn the money hard way as well but now only the poor suffers every where...
China has much more to lose than the US. American factories are already in the process of moving back to the states or going to other countries because they recognize the trend of the rising RMB and know that soon it won't be worth it to make stuff in China. This trade war is just speeding things up. I'm from a kind of rural area in South Carolina, USA and 5 factories have been built around here after moving operations from China.
The rest of the world hates China's unfair trade policies and if they see the US ratcheting up the pressure then they are likely to follow. China is trying to push into the European market, using their debt problems as leverage and offering loans in return for business opportunities. Europe will push back, and India is trying to become the new China in terms of economic output. China seems to overestimate it's strategic position when it comes to the world economy.
Fair is fair. China slaps a huge amount of taxes on US imports, and if the US simply does the same it will make about $2 trillion in profits for the US government. Why does China do this? To make local brands competitive. But the US does this and China cries foul and and it will start a trade war.
Good.
China needs to stop acting like a baby when things don't go it's way. China has no lost the ability to play the "we're a third world economy" card and start playing by the big boy rules. You want to tax the hell out of American goods? Then it's only fair the US does the same back. Tough cookies.
Don't any of you guys know that China is valuating their currency as a result of pressure from the United States? The yuan will continue to rise thru 2012, in my guestimation. probably to around 6.1 or 6.0:1
beaufortninja:
If it was free floating then it would like be between 3-4 rmb per 1 USD. That's a huge trade advantage. The rmb has risen 30% in value in recent years and it's still incredibly unfair. That should give you some perspective on why they got so much investment.
MrTibbles:
China gets 20% of it's revenue from taxing imports. Any product from the US is automatically hit with a 17.5% tax. This is why a $3 box of cereal from the US costs 70rmb here. The US only taxes imports 1.4%. Under the new US law, if it passes, the US will be allowed to tax Chinese goods the same way China taxes US goods. This is fair, no matter what China wants to say. Simply "returning the favor" will make the US a ton of money, give more incentive to produce items in the US, and make US companies more competitive, at least in local US markets. Will it hurt China? Of course. THAT'S THE POINT. China exports to the US for basically free, but taxes the crap out of US products. Of course China likes this deal and doesn't want to see anything change. I love how they keep playing the victim card though.
America got used to get bribe from other countries for a century , those time is over, what they going to do with the cost of war they are involved or they started? what about 4.5M population jobless ? China coming from long poverty history they know the value of 1 RMB i mean they are not going to start a war for helping their economy , China's economy depends on produce and export.
what happened in africa just manslaughter , Chinese helped them to improve their farming and produce food thats what they need, do you think this policy is going to fail?
beaufortninja:
China doesn't help Africa. They pay a few elites and exploit the land. What will China do when the resources are gone? Leave Africa just as bad as before.
Njord:
China is helping Africans? You must watch CCTV... China helps the African dictators and despots by selling arms to them and propping their governments so they can extort their population, China doesn't give a rats ass about Africa, they just want the goods... Christ the Chinese don't even help the Chinese, why the hell would they help anyone else?!
China wont leave Africa, Africa will still need products from here.
beaufortninja:
China will sell stuff in Africa, for a while longer at least, because Africa can't afford to buy from anywhere else. What I was saying was that once the natural resources that China wants have been exhausted they'll pull out. There is no long term investment plan to build up local infrastructure and industries. Many African leaders are recognizing that and some have even won their political offices recently by campaigning on an anti-China stance. Zambia, Lesotho, South Africa, and a few others.
usa downfall has started now, it is time that china will rule.
beaufortninja:
too bad China's economy is already going down the toilet.
Njord:
If the U.S. downfall has started then China is going to be royally phucked!
MrTibbles:
Considering that the US economy still is 3-4 times that of China and it has the most advanced military capability in the world, I'm not sure how a "downfall" is the right term to use here.
Its about time something was done sending all their shit to usa and europe thats break in a year or so when usa and europe have to make and should make good quality products,europe and usa should start to say no and give our producers a fair try
your producers?? They can never supply the demand and not at the prices of the Chinese. If you pay shit for something you get shit, China has many decent goods just open your wallet.
@Fritz. Many decent goods? Yeah. Right. What planet are you living on? Any Chinese citizen will tell you that their own country makes junk.
The only things the Chinese make right are the things they make with borrowed technology, and it still breaks down!
Fritze:
i suppose you shopping only in the markets and on the streets, HTC, TCL, Lenovo, Higger, (and some other motorcars, not those for under 30,000rmb) Lots more to mention. Just for the record; from the moment an American (85% if them. In some other countries it more like 95%) wake up until he goes back to sleep touch or use something made in China.
Wow, lots of different issues going on here. Currency valuations, African policies, trade policies, consumer good quality, etc...
Let me start with the main subject: Currency wars.
Until about 5 years ago, China had been pegging the value of the RMB to the American dollar at a constant rate of 8.0265 to 1. Since then, under pressure from the WTC that China desprately wanted to be part of, they partially released the RMB to the global float and the valuation is now around 6.3 to 1. That is a swing of about 22% in 5 years.
Now, in order to become a WTC member, China promissed to completely release the RMB on the global float. They haven't done that and for good reason. The RMB would probably settle down around 5 to 1. That would represent about a 40% swing in valuation.
How much cheaper do you think it is to produce goods here in China? When you take into account the current 22% valuation of the RMB, the nearly 100-300% increase in base salaries, the massive swings in export costs due to taxes, fuel costs, etc... Then suddenly China is no longer a profit center, but a source of liability.
China's officials can read the writing on the wall. Why do you think there has been a mass exodus of officers and their cash? How many high up people do you know that have citizenship in another country like the US or NZ or Aus? Personally, I know a lot. It is actually harder to find a leader type that doesn't have a foreign citizenship (or very close members of their family like sons, daughters, wives, etc..).
There are lots of ways that China is trying to combat the inevitable currency valuation. But this post has gone on far enough for now.
If America wins, it might smart for a little while. However, since American companies can just move their factories elsewhere, if they haven't done so already, it's not so horrible. China is dependent on exports. If the factories leave, their economy slows down. What can China do? They can't go back now, only forward. This is what would happen anyway, the US is just trying to speed it up.
I'm pretty sure I said that China needs the USA more than the USA needs China. And that if a trade war happens China, who have spent all their money on noucea riche BS will be screwed...
I guess it was harmonized by the supposed "Canadian and American" editors on Echina
This reminds of the 80's, Japan buying everything, and then trying to unload it for debt payments for half price a decade later. de je vu.