Fwd: Macroperu Las Políticas de China

del escritorio de bruno seminario

---------- Forwarded message ----------
From: Bruno Seminario <lbseminario@yahoo.com>
Date: 2008/12/8
Subject: Macroperu Las Políticas de China
To: macroperu <macroperu@yahoogroups.com>

China plays beggar thy neighbor En este artículo pueden encontrar una buena descripción de la política economica  de las autoridades chinas.  By Peter Navarro  The latest summit between the United States and Chinese officials graphically illustrates that China has learned to play two games from the West: hardball and beggar thy neighbor.  China's hardball approach is evident in the announcement by its major sovereign wealth fund that it will no longer invest in the US financial sector.  The stated reason for this provocative announcement, which was issued on the very eve of the economic summit, is that any suchinvestments would be too risky.  "I don't dare to invest in financial institutions now," Lou Jiwei, chairman of China Investment Corp, said at a conference in Hong      Kong. "The policies of the developed nations on these institutions are not clear. Until they are clear, I don't dare to invest in them. What if they go bust? I will lose everything."  In fact, China's new policy represents both retaliation and a bargaining chip. The retaliatory part of the hardball message has been aimed directly at US Treasury Secretary Henry Paulson, who, much to the displeasure of the Chinese, continues to repeat his demand for Chinese currency reform. The bargaining-chip part is designed to reinforce just how weak the US position is in negotiations while leaving open the door to future investments by China's sovereign wealth fund if the US behaves itself.  As for the beggar thy neighbor, it has become clear over the past week that Chinese government officials intend to export their way out of the global economic crisis. This is all too readily apparent in the recent downward movements of the Chinese yuan relative to the dollar. Stripped of any rhetoric, this movement represents a "competitive devaluation" designed to boost Chinese exports to the US at the expense of both domestic US manufacturers and competing countries such as South Korea and Japan.  In fact, Chinese currency manipulation represents "beggar thy neighbor" on a grand scale. By grossly undervaluing the Chinese yuan relative to the US dollar over the past five years, China has grown its economy on the backs of American workers and helped to decimate the American manufacturing base. Today, it is almost impossible for American manufacturers to compete against their Chinese counterparts when the yuan is undervalued by 30% or more. Add to this an extensive array of illegal Chinese export subsidies, and it becomes easy to understand how China has been able to offshore so many American jobs to its own factories.  Under political pressure, China allowed the yuan to modestly appreciate relative to the dollar over the past year. However, despite this appreciation, the yuan still fell relative to the euro and other major currencies - in the process, significantly exacerbating China's trade imbalance with Europe.  It's not just the United States and Europe that China's currency manipulation hurts. Japan, South Korea and others of China's erstwhile competitors in Asia for export markets likewise lose competitive advantage. That's why China's latest devaluation of its currency could not come at a worse time for its Asian neighbors.  South Korea is experiencing an horrific currency crisis of its own, one that is in large part driven by the steep decline in its exports and a collateral slowing of its economy. The last thing South Korea needs right now is a competitive devaluation by China that further negatively impacts South Korean exports and puts more downward pressure on the won.  Japan is in exactly the same boat. This is a country that just a year ago finally got its head above the economic waters but now is sinking back into the recessionary, deflationary morass. China's devaluation likewise strikes hard at the ability of Japan to bounce back.  The ultimate big picture here is that China could play a very constructive role in the rebuilding of the global economy. With its huge foreign reserves, it could assist Asian neighbors like South Korea in their time of need. China could also use this time as a transition point for moving from an export-driven economy to one fueled by domestic consumption.  It is all too clear, however, that China has chosen to move in the opposite direction. This will not only further destabilize the global economy. It will also significantly strain relations with the United States. This is particularly true given the campaign promise of president-elect Barack Obama to crack down on Chinese mercantilism.  Peter Navarro is a professor at the Paul Merage School of Business, University of California-Irvine, a CNBC contributor, and author ofThe Coming China Wars. www.peternavarro.com

---

¡Todo sobre Amor y Sexo!
La guía completa para tu vida en Mujer de Hoy:
http://mujerdehoy.telemundo.yahoo.com/

__._,_.___

Messages in this topic (1) Reply (via web post) | Start a new topic

Messages | Links | Polls | Members | Calendar

MARKETPLACE

---

From kitchen basics to easy recipes - join the Group from Kraft Foods

Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe

Recent Activity

•  1
  New Members

Visit Your Group

Yahoo! Groups

w/ John McEnroe

Join the All-Bran

Day 10 Club.

Yahoo! Groups

Cat Owners Group

Connect and share with

others who love their cats

Moderator Central

Get answers to

your questions about

running Y! Groups.

.

__,_._,___