Working Together

•April 11, 2007 • 1 Comment

On Wensday, the results of a conference between Japanese Prime Minister Shinzo Abe and Chinese Premier Wen Jiabao were released. The conference seems to be move toward both countries working to create stability and peace within their region. China and Japan see the need to insure that North Korea maintains the terms found in the agreement made February 13, 2007. The two countries also feel it would beneficial to work more closely together on issues concerning the UN and both countries discussed the issues of giving aid to other countries.

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I feel I’ve Read this Before

•April 10, 2007 • 1 Comment

An Article appearing on The Washington Post’s website stated that the Bush Administration will seek to pressure China to crack down on its rampant black market of US copyrighted material via the WTO. The Bush administration claims that the illegal sale of these copyrighted goods, such as movies and books, have lead to the loss of 2.3 Billion dollars for US Companies. I took notice to this article mainly because as I was conducting research for my wiki project I cam across an article that stated the United States and other countries are attempting to “liberalize” China by means of major international organizations like the WTO. I suppose this could be interpreted as an act on the part of the Bush administration to create a “better” government in China by forcing the Chinese government to crack down on these illegal dealings.

Stuck

•March 25, 2007 • 1 Comment

As of last Thursday nuclear disarmament talks concerning North Korea came to a screeching halt. In 2005 the United States made moves against Banco Delta Asia, which the US claimed was laundering money for North Korea. Until recently North Korea’s holdings in foreign banks have been frozen. This week the United States attempted to deposit an amount of the holdings into the Bank of China. To this the Chinese governments responded very negatively and have so far stifled the transaction from occurring, after this China has also stopped the six way disarmament talks. Both the United States and other participating countries hope that this dispute can be settled quickly and hope that the talks will resume shortly.

I Guess Lardy Was Right.

•March 3, 2007 • Leave a Comment

I’m not an economist but I do understand that this week saw a plunge in stocks world wide, and of course there are those who would like to know why this occurred. Well and article posted on Bloomberg’s website, Asian Stocks Add to Global Rout After China’s Slump; BHP Drops, at least puts some of the blame on China. The article claims that China’s government has taken measures to stop illegal purchase of stocks, to stop banks from loaning money to those who wish to buy stocks, and has called for banks to call in outstanding loans. Lardy predicted a similar event to occur in the article that I commented on in my last blog. In his article his said that the Chinese government should have taken the above measures years ago or else a plunge in the market world market would happen. So I guess Lardy was right.

Nicholas Lardy’s Opinion

•February 27, 2007 • 1 Comment

As I was doing some research for my wiki project, I came across an interesting article. The article Exchange Rate and Monetary Policy in China examines and criticizes China’s policy of controlling the value of its currency, the yuan. As Lardy explains China for the past thirty or so years has systematically devalued its own currency, but Lardy also points out that China’s current value that it gives its yuan is skewed and no where near the value that it should be at. Simular to the conclusions of the recent G-7 summit, Lardy feels that China should revalue its currency and allow it to come under the influences of market forces. Lardy also explains that China’s economic growth is directly tied to China’s valuing of the yuan, and because of this China’s credit growth was able to grow tremendously in 2003. The article states that China is able grow at the rate that it is because of the relatively new trend of credit growth and investment that China is now famous for. Lardy concludes that China refuses to allow its currency to fall under market forces in order to continue its current rate of growth. Ultimately though he feels this will lead to a massive undermining of China’s goals to continuously grow and develop. He suggests that China revalues its currency and draws measures against its credit trends. I thought the article was interesting enough and just thought I’d share what I found.   

The Winds of Change?

•February 21, 2007 • Leave a Comment

As China continues to grow economically, the world wonders if the country’s government will also change. After all, how can a communist government properly foster a rapidly expanding capitalist economy? Well soon the world will get to see how China will deal with its new place in the world. Starting March 5 China’s legislative body will again convene and the body will address privatization of old nationally owned businesses. Recently a debate has sprung up over whether the government should protect its growing private sector or not. Many feel that the developing companies have and will only widen the gap between rich and poor. Those who disagree with that view feel that those who would support anti-privatization legislation are of the “old” communist party. But an online petition to stop privatizing business, which was recently censored, was reported to have three million signatures. So the question is will China’s government change to fit its new economic position, or will it make the position fit China. This seems be the story of China’s recent economic history.    

Complaints

•February 11, 2007 • 1 Comment

Newsvine’s article G-7 Presses China on Yuan Flexibility discusses the conclusions made be a recent meeting of G-7. The G-7 group consisted of Britain, Canada, France, Germany, Italy, Japan, and the United States; and the major conclusion of their meeting was that China must lessen its control over its currency and allow for “market forces” to influence it value. As it stands now China is able to manipulate the value it currency, the Yuan, in a number of different ways, most notable of these methods is the purchasing of US dollars. G-7 feels that China’s continued practice is not good for global growth and that there must a balance of growth. It seems that whenever China makes a new trade agreement or is doing well there are always a group or a council or summit meeting that attempts to curve it gain or stop it altogether. From the articles that I have read it seems that China is growing into the world class superpower and the world, well the west, doesn’t want that to happen.