If our Congress continues on its course to force a rise in their currency, the yuan.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml

8/7/2007 4:08:28 PM

its all good...i just hope we keep recalling products WEEKLY

8/7/2007 4:09:02 PM

they are also pissed at the last few centuries and have threatened to un-invent gunpowder

8/7/2007 4:14:52 PM

yea.. let them do that. It would completely devastate their economy.

8/7/2007 5:25:51 PM

Fuck them. I can't wait for the 2008 Olympics when 1 of 2 things happen

1) They are unable/unwilling to control the foreign press and their population's exposure to it and everyone (including their population) sees how controlling, manipulative, and undemocratic they are and they get shit on their face from countless pro-democracy protests

or

2) They do try to control the foreign press, the free world cries foul, and everyone takes turns shitting on China.

Either way I see it, they come out covered in shit.

8/7/2007 6:12:29 PM

it would be awesome if they tried to liquidate it and we immediately seized all funds

8/7/2007 8:54:32 PM

I suppose they could, but like real nuclear war, it would also be the kiss of death for the Chinese economy and perhaps the global economy as well. Destroying the American economy would undermine the entire global economy, and while it would certainly suck for us, it would likely be a disaster for the Chinese. After all, who's going to make up over two hundred billion dollars in imports when we go down the tank? No one else has both the economy that could make up such a number AND the political will to absorb so many imports.

My two cents.

8/7/2007 9:10:32 PM

Quote :

""The whole point of the Doomsday Machine is lost if you keep it a secret! The Doomsday Machine only does its job if people know about it!""

[Edited on August 7, 2007 at 9:24 PM. Reason : ]

8/7/2007 9:23:49 PM

Quote :

"it would likely be a disaster for the Chinese. After all, who's going to make up over two hundred billion dollars in imports when we go down the tank? No one else has both the economy that could make up such a number AND the political will to absorb so many imports. "

Nope. See we have been paying to build China's internal economy now for almost 20 years. If they cut out the US, it just means they can turn all that manufacturing and production capability internal and their own economy and infrastructure will rapidly grow. Its the same asia effect that happened in korea, taiwan and japan. goods there sell for more than they do as exports to the US.

what would happen is we would be fuuuuuccccked. china is a communist state, so they have many more options than we do. it would decimate our economy and cause an immediate shift back into manufacturing and raw material sourcing. which would mean America entering the material race in Africa.

8/7/2007 10:11:17 PM

^ Well, the value of the dollar will fall a good bit, meaning we pay more for anything imported (like oil or goods from China).

I think the scarier part is the fact they are threatening. It's not like they just shoot their mouths off without thinking about it first. It shows their government in the future does not see much use for us. Our Secretary of the Treasury has been sent over a couple times and was on hands and knees pleading for them to continue buying our treasuries a few months ago. It would be nice to say whatever the Chinese do is irrelevant in regards to us, but that's no longer the case when they could singlehandedly destroy the value of our currency if they so desired.

And by the way, do these idiot congressmen and senators realize that if the value of the yuan rises, that means consumers (in our consumption-based economy currently) could not buy as much with their money as everything from China (which is a lot of goods here and pretty much everything at Wal-Mart) would cost more if the yuan-to-dollar ratio decreased?

8/7/2007 10:57:53 PM

Quote :

"Fuck them. I can't wait for the 2008 Olympics when 1 of 2 things happen 1) They are unable/unwilling to control the foreign press and their population's exposure to it and everyone (including their population) sees how controlling, manipulative, and undemocratic they are and they get shit on their face from countless pro-democracy protests or 2) They do try to control the foreign press, the free world cries foul, and everyone takes turns shitting on China. Either way I see it, they come out covered in shit."

LOL

^ and thats what I thought when I read that link. Our ecomonic debt related problems, to not just China, but more or less the entire world, is not a stable on US spending habits. The fact China is threatening anything shows that they know ( and probably have for a while) that now the ball is in their court.

8/7/2007 11:09:46 PM

^^re-valuing the yuan would dramatically slow the chinese economy and even our trade deficit which would be a HUGE boom for the US markets. It would mean we would begin exporting finished good TO china and as a result increase the strength of the dollar. The same thing would happen in Europe and other parts of asia.

The one thing China doesnt want to do is finally admit that they have been fixing currency inflation (which they have) because it would decimate their burgeoning economy right now. Hence why they said this, because it would be better to lose US trade and cripple the US economy while only slightly altering theirs, than to cripple their own growth and increase ours.

8/7/2007 11:20:20 PM

Quote :

"re-valuing the yuan would dramatically slow the chinese economy"

Why? You seem to have skipped a few steps in your reasoning.

Quote :

"Well, the value of the dollar will fall a good bit"

This is true, at least in the short term. The psychological effect would be all there was, afterall, since the Chinese do not have large stores of dollars on-hand to dump. It is all tied up in securities. If China tried to liquidate all U.S. holdings, it is here that the impact will be felt strongest, as the T-Bill market collapsed, making all the treasury bills china owns worthless. Sure, they have a trillion dollars in securities, but if they ever tried to dump even a fraction of that, that trillion dollars would quickly become merely a few tens of billions; not a lot of money available for someone trying to destabilize the world's reserve currency. It's not a matter of the bonds themselves becoming worthless, it is just that China would quickly exchaust the supply of ready buyers, as everyone would be waiting to find the floor before buying.

[Edited on August 8, 2007 at 12:18 AM. Reason : .,.]

8/8/2007 12:13:40 AM

Quote :

"Nope. See we have been paying to build China's internal economy now for almost 20 years. If they cut out the US, it just means they can turn all that manufacturing and production capability internal and their own economy and infrastructure will rapidly grow. Its the same asia effect that happened in korea, taiwan and japan. goods there sell for more than they do as exports to the US. what would happen is we would be fuuuuuccccked. china is a communist state, so they have many more options than we do. it would decimate our economy and cause an immediate shift back into manufacturing and raw material sourcing. which would mean America entering the material race in Africa. "

Are you joking? If the US economy goes boom, so does the world economy. Especially China's.
They are communist so they doesn't have to worry about economic reality? Awesome, that worked so well for them before, and the Russians too.

Their economy is completely focused on exports... over a billion of their people still live in what we would consider poverty. Who is gonna buy their shitty products? No one.

This shows China's biggest weakness, they think they can manipulate markets to their advantage. It's going to blow up in their face if they don't realize they can't do that.

8/8/2007 12:42:08 AM

^no, they dont go boom.

Their infrastructure has SKYROCKETED in the past ten years. Internal chinese markets are skyrocketing MUCH faster than their exports are. The demand for consumers good IN China is vastly outpacing the demand for exports.

Look at the trends for the major luxury expendatures over the past 5-7 years, namely automobiles, computers, cell phones within China. It's insane.

If they lose the exports to the US, they can shift development internally. Because of the communist control they can impose policy that will fuel the growth to continue without causing a socialist collapse like Russia or North Korea. China isn't the same type of nation, they have a really pretty interesting hybrid between industry and government.

Granted it would probably mean a lot of impoverished people are going to die or get killed/displaced, but there isn't shit we can do about that right now.

8/8/2007 1:29:44 AM

Quote :

"Nope. See we have been paying to build China's internal economy now for almost 20 years. If they cut out the US, it just means they can turn all that manufacturing and production capability internal and their own economy and infrastructure will rapidly grow. Its the same asia effect that happened in korea, taiwan and japan. goods there sell for more than they do as exports to the US. "

While I don't disagree that this could be the case in another ten or so years, I don't think China has yet to achieve the critical mass it needs to be able to sustain their economy on their own internal markets. They are still heavily dependent on the American export market to bring in the capital they required, and I'm pretty sure that other economic entities like the European Union pr the Japanese could make up that gap (or even if they could, would lack the political will to do so). No, China's fate is still tied in with us for a little while longer. Still, if we don't remedy this situation soon, they may well decide to pull the plug on us in the near future.

8/8/2007 1:35:52 AM

i think they flood the us market with cheap shit because they can, not because they have to. I've seen the quality of products that CAN come out of China. The only thing keeping them from competing on a different level in other countries and areas like the EU, middle east and southeast asia is that there are higher ROI currently in the US.

8/8/2007 2:33:26 AM

Quote :

"Because of the communist control they can impose policy that will fuel the growth to continue without causing a socialist collapse like Russia or North Korea. China isn't the same type of nation, they have a really pretty interesting hybrid between industry and government."

That makes no sense, the reason they have been able to succeed, as you point out, is that they have adopted some free market practices, but if they resume communist control then it would follow that they would lose the productivity they have gained by opening up their markets. You can't have it both ways.

I'm no economic whiz, but it seems reverting to economic isolation and state controlled industry, which you are saying they could do, would completely fuck them over in the long run. They have grown because they opened up, so I don't follow the logic that they can continue to grow if internalize.

They just don't have the internal markets. What, 50%, of the population is still devoted to agriculture... in the US it's less than 1%. Yeah.... again... yet them fuck around with something they think they understand, but really have no clue about.

8/8/2007 4:32:44 AM

Quote :

"^^re-valuing the yuan would dramatically slow the chinese economy and even our trade deficit which would be a HUGE boom for the US markets. It would mean we would begin exporting finished good TO china and as a result increase the strength of the dollar. The same thing would happen in Europe and other parts of asia."

What would we export to China that would make economic sense to a CEO compared to being built there? Raise the value of the yuan and drop the value of the dollar and that still doesn't do anything of significance long-term. That would be like instead of the peso being worth $0.10 to the dollar it goes up to $0.25. That's a big change, but not enough to cause corporations to stop moving operations to Mexico.

Quote :

"The one thing China doesnt want to do is finally admit that they have been fixing currency inflation (which they have) because it would decimate their burgeoning economy right now."

Everyone knows they are, so them admitting doesn't mean anything. Heck, Japan have been doing the same exact thing for a number of years. I work with Japanese customers of the company I work for and they have been busy getting everything imported into the country built domestically cause the Bank of Japan has kept the value of the yen so low, and the customers openly admitted it to me when I inquired into it.

8/8/2007 8:28:33 AM

Quote :

"Their infrastructure has SKYROCKETED in the past ten years. Internal chinese markets are skyrocketing MUCH faster than their exports are. The demand for consumers good IN China is vastly outpacing the demand for exports."

Link, plz

8/8/2007 9:25:02 AM

Quote :

"Their infrastructure has SKYROCKETED in the past ten years. Internal chinese markets are skyrocketing MUCH faster than their exports are. The demand for consumers good IN China is vastly outpacing the demand for exports. If they lose the exports to the US, they can shift development internally. Because of the communist control they can impose policy that will fuel the growth to continue without causing a socialist collapse like Russia or North Korea. China isn't the same type of nation, they have a really pretty interesting hybrid between industry and government."

You seem to not understand exactly what it is that China has been doing for the past 30 years. China is not industrializing itself, all its pretty factories were built by foreigners using foreign capital goods. This is because China has modernized through trade. As such, Chinese firms are utterly dependent on foreign firms for parts, expertise, and markets. If that trade is cut off, many Chinese firms will be unable to continue operating.

And this is not a China only scenario. America too has become addicted to trade for parts, expertise, and markets. American firms have divided up their production chains internationaly; an I-Pod may be assembled in China, but the hard drive is from Japan, the plastic is from America, the electronics are from Korea, designed in Canada, etc.

If any country becomes severed from the world-trading system, it does not matter how much control the government exerts: factories are going to be idled, workers are going to be unemployed, shortages will develop, and both product and capital markets will malfunction. Even a completely free economy will take more than a year to stabilize and resume growth (assuming the year of instability did not break the money supply as occured in the American Great Depression following the Smoot-Hawley Tariff Act).

8/8/2007 9:51:32 AM

Quote :

"1) They are unable/unwilling to control the foreign press and their population's exposure to it and everyone (including their population) sees how controlling, manipulative, and undemocratic they are and they get shit on their face from countless pro-democracy protests or 2) They do try to control the foreign press, the free world cries foul, and everyone takes turns shitting on China."

You have far more faith in the media than I. They're not interested in freedom, they're interested in selling articles. China is no amateur at press manipulation, they won't fuck this one up.

[Edited on August 8, 2007 at 5:06 PM. Reason : t]

8/8/2007 5:06:32 PM

Quote :

"You seem to not understand exactly what it is that China has been doing for the past 30 years. China is not industrializing itself, all its pretty factories were built by foreigners using foreign capital goods. This is because China has modernized through trade. As such, Chinese firms are utterly dependent on foreign firms for parts, expertise, and markets. If that trade is cut off, many Chinese firms will be unable to continue operating. And this is not a China only scenario. America too has become addicted to trade for parts, expertise, and markets. American firms have divided up their production chains internationaly; an I-Pod may be assembled in China, but the hard drive is from Japan, the plastic is from America, the electronics are from Korea, designed in Canada, etc. "

You don't seem to understand that it is industrializing itself. All those factories built with foreign investments are still under the control and watchful eye of the government. Every bit of commerce, foriegn or domestic is extremely heavily watched and should this nuclear option happen, these factories aren't going to close and go into dis-repair. China has the infrastructure to build this stuff themselves. They have been milking the west for technology and knowledge for a long time and they are damn near our levels as it is now.

And losing the US is not losing the world. We absolutely are a huge amount of China's trade, but by no means all of it.

And yes america is heavily dependent on outsourced global trade. china is heavily dependent on import trade regulations. I can buy damn near ANY piece of industrial equipment made COMPLETELY in China that is a carbon copy of western machines. But they don't sell because they don't meet import UL regulations, or FDA regulations or sometimes CE regulations.

I really don't think you realize the scope of their manufacturing power now, especially in light of the non-existant IP laws over there. Nearly any common electronic good can be entirely produced point to point (and are) in china. We don't see them much in the US again, because of import restrictions (namely IP laws). The only thing China RELIES on the rest of the world for in it's own economy right now is raw material aquisition, a pretty good part of which is coming from the US, but mostly from other 3rd world countries.

Quote :

"If any country becomes severed from the world-trading system, it does not matter how much control the government exerts: factories are going to be idled, workers are going to be unemployed, shortages will develop, and both product and capital markets will malfunction. Even a completely free economy will take more than a year to stabilize and resume growth (assuming the year of instability did not break the money supply as occured in the American Great Depression following the Smoot-Hawley Tariff Act)."

It would only be China severing ties with the US. We would lose massive cheap imports. China would lose a portion of its exports. Factories would be able to shift production, though I do agree it would slow growth to a crawl compared to today. Workers won't so much go unemployed as the massive urban migration would slow to a crawl because new jobs would not be continually opening.

China isn't going to isolate itself a-la Japan or North Korea.

8/8/2007 6:58:30 PM

Quote :

"I really don't think you realize the scope of their manufacturing power now"

No more powerful than any other industrialized country. And just like any industrialized country, all its internal economic systems are integrated with all other foreign industrialized countries. Being cut off from one or all of these foreign countries forces a re-organization, and it is these re-organizations that commoners know of as recessions. Some investors are hampered with factories that are no longer relevant and will need to be closed; and every other investor is running around not know exactly what the future economic system is going to look like (in other-words, prices are still fluxuating, so there is no telling what it will be profitable to produce in the new economic system sans trade), so they refuse to invest in anything until things settle down.

8/8/2007 10:15:25 PM