Beijing Stuck With a Fistful of Dollars

choi

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Satyajit Das, Beijing stuck with a fistful of dollars. Sudney Morning Herald
, Dec. 29, 2009.
http://www.smh.com.au/business/beijing-stuck-with-a-fistful-of-dollars-20091228-lh74.html

My comment:
(a) The first half is for general audience, which a smart person like you
can from mid-section: the paragraph that contains "Derek Scissors." Mr.
Scissors' statement was reported before, at paragraph 10 of Chinese (as well
as English) edition of Financial Times.

Jamil Anderlini, 中国今年上半年经济数据出现差异. FTChinese, Aug. 15, 2009.
http://www.360doc.com/content/09/0805/09/199_4678931.shtml

(b) This analysis states, "Almost 40 years ago, John Connally, then the US
treasury secretary, accurately identified China's problem: 'It may be our
currency, but it's your problem.'"

What does this mean?

There is a draft to this analysis, titled "Dragon's easy credit inflates
bubble" of the same day and in the web site of the same newspaper.
http://www.smh.com.au/business/dragons-easy-credit-inflates-bubble-20091228-lhc5.html

The draft is similar, but expanded on this in the last paragraph: "Every
lender knows Keynes' famous observation: 'If I owe you a pound, I have a
problem; but if I owe you a million, the problem is yours.' Almost 40 years
ago, John Connally, then US Treasury secretary, accurately identified China'
s problem: 'It may be our currency, but it's your problem.'"

(c)
(i) Bretton Woods system
http://en.wikipedia.org/wiki/Bretton_Woods_system#Nixon_Shock

Quote:

"Preparing to rebuild the international economic system as World War II was
still raging, 730 delegates from all 44 Allied nations gathered at the Mount
Washington Hotel in Bretton Woods, New Hampshire, United States, for the
United Nations Monetary and Financial Conference. The delegates deliberated
upon and signed the Bretton Woods Agreements during the first three weeks of
July 1944.

"By 1968, the attempt to defend the dollar at a fixed peg of $35/ounce, the
policy of the Eisenhower, Kennedy and Johnson administrations, had become
increasingly untenable. Gold outflows from the U.S. accelerated."

(ii) After the meeting at Breton Woods, the world was on gold standard: the
dollar was pegged at $35 per ounce of gold, and European and Japanese
currencies pegged against dollar. Mr. Connaly, Secretary of Finance under
Pres. Nixon basically said US did not give a damn (about debt, dollar
depreciation , tariff to be unilaterally imposed by US, and so on), and
forced the other currencies appreciate in two weeks.


--------------Separately
(1) 大陆台商调查预期 2010 年业绩好转. VOA Chinese, Dec. 28, 2009.
http://www1.voanews.com/chinese/news/china/Taiwan_20091228-80216312.html

Quote:

"研究中国大陆台商经营环境有多年经验的台北经营管理研究院院长陈明璋，今年7至9
月率领研究团队到中国调查台商经营环境的转变，针对广东、福建和天津的 128家台商
进行问卷调查，最近发表《2009大陆投资环境变动对台商经营之影响与对策调查》，主
要探讨2008年底爆发的国际金融海啸对大陆台商的冲击，以及对未来经营环境的展望。

"调查结果显示，2009年台商受国际金融海啸影响，经营情况很不理想，高达7成8受访
台商表示获利较2008年减少，获利增加者只占受访台商的3％，另外19％获利维持不变
。以地区看，广东台商获利减少者占76％，福建为84％，天津则为78％。

My comment: 春江水曖鴨先知. (China has reported within the past two days
that garment and toy export from Guangdong has decreased by about 12% each
in the first eleven months of this year. I am not posting them (the news)
now, for in a few weeks, China will publish the yearly outcome for 2009.)

(2) Pradnya Joshi, Late to Export Arena, Vietnam Is Refining Its Role on the
Global Stage. New York Times, Dec. 27, 2009.
http://www.nytimes.com/2009/12/25/business/global/25export.html?scp=1&sq=vietnam%20export&st=cse
("In order to square off against China, many manufacturers try to rely on
niche industries and specialties rather than competing solely on price or
low labor costs.")

My comment: "Vietnamese inflation accelerated to the fastest pace since
April as higher rice prices pushed up food costs while an accelerating
economy fueled domestic demand. Consumer prices in Vietnam rose 6.52 percent
this month [December] from a year earlier."
Jason Folkmanis, Vietnam’s Inflation Accelerates to Eight-Month High (
Update1). Bloomberg, Dec. 24, 2009.
http://www.bloomberg.com/apps/news?pid=20601080&sid=a_KGe_qw4ePs

(3) 中国明年更严格控制信贷规模. VOA Chinese, Dec. 23, 2009.
http://www1.voanews.com/chinese/news/Chinalendingcontrol-20091223-80018797.html

Quote:

"美国智库传统基金会高级研究员、中国经济问题专家史剑道(Derek Scissors)认为，
中国央行的声明历来多是空谈。

"'我不相信这个声明几乎所有的计划。第一，每当中国央行谈论一套宏伟计划时，就意
味着你们不要太认真。他们有9项计划或者10项计划，其实没有一件是重点。第二，他
们谈论把资金从不受欢迎企业引导到受欢迎的企业，谈论了6、7年，却没有发生。因此
，这些行业的产能过剩更加恶化。'

"史剑道有这样的疑问，在中国适度宽松的货币政策指导下的银行贷款尚且导致广义货
币供应量增幅达到30%，那么宽松的货币政策又会是什么样的增幅？

My comment: Other than the quotation, there is no need to read the rest.

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