Revaluing the yuan helps no one

last SG · 2005-12-16T09:36:10+00:00

No, that's naive... It will move to the next low labour cost country likely Vietnam. Our govt has infact lay basic foundation there. China has also a huge c...

Gazelle SG

If China let the Yuan appreciate by 20%, is the labour cost still cheaper than Singaporeans or the Americans?

Most job are created before Yuan was perceived as under valued. what makes your think that when yuan appreciate FDI will stop? What is your theory?

Do you have reason to believe that a company will actually investment in China just because of China's YUAN policy? I think Forex is the last thing that any company will want to bet on and thats why company do hedging.

You might be too green to know that Singapore MAS also interven the S$ because they have to make sure that singapore maintain its competitive edge over countries like Korea, Taiwan, Japan etc.

Salman SG

If China let the Yuan appreciate by 20%, is the labour cost still cheaper than Singaporeans or the Americans?

But it would be comparatively less cheap and less jobs and investmenst would go there. Singapore products would also be more competitive against Chinese product.

Most job are created before Yuan was perceived as under valued. what makes your think that when yuan appreciate FDI will stop? What is your theory?

FDI may not stop, but more FDI would certainly come to this region and less jobs be lost.

Of course they will, the value of the yuan directly affects cost of operations!

You might be too green to know that Singapore MAS also interven the S$ because they have to make sure that singapore maintain its competitive edge over countries like Korea, Taiwan, Japan etc.

But Singapore dollar isn't under valued like Yuan.
Plus, any intervention that is excessive will cost us, unlike the yuan for the Chinese govt.
Seems like you are playing my points well for me already.

Gazelle SG

Salman, maybe you dont really know what is the cost gap between China and Singapore. There is no way Singapore will be able to compete on Cost with chinese, regardless if they float their currency. The only thing singapore can compete is IP copyright laws, tax holiday, port efficiency, banking system, security, that is why singapore is focusing more on R&D rather than low cost manfucturing for people like you.

Why should they choose Singapore? Why not Taiwan, Indonesia, Phillippines, Malaysia? What makes you think that Singapore is the de facto no.2 choice?

If that is the case, why companies didnt rush to invest in Indonesia when the currecy collapse during 1998?

How can you tell which currecy is undervalue and which is not? Undervalue against which denomination? What do you mean by excessive? At which level will you say that it is consider unfair?

You have no points, just full of assumption.

boy in blues SG

yes.
the peg can be a devalued one.
but that doesn't prove the yuan is devalued

Salman SG

What about Indonesia? What about Thailand?
And its not true that we cannot compete at all with China on manufacturing.
Had there not been a devalued yuan, we would have kept more jobs in this region. Same for the USA, they can compete with China on many products had there not been an undervalued yuan.

Why should they choose Singapore? Why not Taiwan, Indonesia, Phillippines, Malaysia? What makes you think that Singapore is the de facto no.2 choice?

Did I say Singapore is the no.2 choice? Where did I say or imply that? Did you read my posts? Go reread them again.

If that is the case, why companies didnt rush to invest in Indonesia when the currecy collapse during 1998?

Some did. Others didn't because of political considerations.

How can you tell which currecy is undervalue and which is not? Undervalue against which denomination? What do you mean by excessive? At which level will you say that it is consider unfair?

Its simple. The yuan isn't on float and China refuse to float it inspite of a massive bond reserve.

You have no points, just full of assumption.

No amt of ranting can win you debate my friend. The more you post the more you show up ignorant on basic monetary economics.

boy in blues SG

Sino-US trade 'win-win'

Chinese Commerce Minister, Bo Xilai said trade between China and the US was complementary rather than competitive. "Some people in the United States are complaining that China's exports have resulted in the loss of jobs there. However, as far as I know, thanks to growing China-US trade, the jobs lost in the manufacturing sector have been more than offset with new jobs in the [shipping, logistics and trade] field," Bo said.

"On the whole, trade between China and the United States is balanced, and China is importing an increasing number of US products," Bo said, adding that China became the fourth biggest export market of the United States this year.

http://www.atimes.com/atimes/China_Business/GL13Cb05.html

Salman SG

Of course China will say that you dummy! What do you expect them to say?

boy in blues SG

i expect him to say that,
and i agree with what he said.
do you also agree or not?

Salman SG

Whats wrong with believing that the yuan is under valued?

sgdiehard SG

whats wrong with believing that the world is not a globe?

Gazelle SG

Nothing wrong, just that we believe a stable china is more important that a "FAIR" value Yuan.

Gazelle SG

Your argument seems to contradict what most people believe. I would like to know why you say that USA and Singapore can compete will China in terms of manufacturing cost if they float the Yuan.

You mentioned that if yuan is not under value, jobs will come back to THIS region. (I have reason to believe that you are from Singapore right?)

now you are saying that political considerations is a factor in deciding your investment. Would China political system be more stable if they float the Yuan? Will china political system be more stable if the economy colllapse?

Would appreciate if you could do some reading about the risk of floating the currency. its not as easy as what you think.

Clue : Do you know why Chinese government is selling their stake in state owned banks?

stop firing blanks, all you make are noise and you will never hit the target.

Salman SG

Why more important?

what about a stable, Africa, Indonesia, stable, Thailand and stable Singapore?
less important? What about us?

Salman SG

whats wrong with believing that the sun is a cube?

Salman SG

Your argument seems to contradict what most people believe. I would like to know why you say that USA and Singapore can compete will China in terms of manufacturing cost if they float the Yuan.

The rest of the world would indeed be more competitive against China if they do not undervalue their yuan. Don't you know? Why do you think they under value in the first place? Why do you think they restrict their currency while buying massive bond in reserves? What for?

You mentioned that if yuan is not under value, jobs will come back to THIS region. (I have reason to believe that you are from Singapore right?)

This region is more than Singapore right? You see, you put words into my mouth.

The economy will not collpase, indeed, it may even thrive as domestic demand increase with valauation of the yuan.
The Chinese on the one hand says that imports created more jobs in the US but won't that apply to them too? Surely what is good for others must be good for china too right? Why the double logic? Please explain the hypocrisy.

Would appreciate if you could do some reading about the risk of floating the currency. its not as easy as what you think.

Why is it most countries float their currencies? Don't they face risk too?
The whole idea is the undervaluation of the yuan, not necessarily the non float.

Clue : Do you know why Chinese government is selling their stake in state owned banks?

Good for them, privatisation.

stop firing blanks, all you make are noise and you will never hit the target.

Thats right mister, stop firing blanks. You don't even know you have been firing blanks. I suggest you read up on monetary economics and put real understanding and ammo in your posts. Then we can have reason and logic on this forum.

Gazelle SG

you are insulting yourself by asking this question.

http://www.singstat.gov.sg/keystats/mqstats/ess/essa67.pdf

Gazelle SG

Why would the world want to compete with China? The world is now thinking of how they are going to take advantage of China booming economy not competing for job.

FYI, china booming economy is not just because of YUAN. Let me ask you how many country is this world is actively lobbying against China's Yuan? beside USA, there is Salman.

Originally posted by Salman:
[b]The economy will not collpase, indeed, it may even thrive as domestic demand increase with valauation of the yuan.
The Chinese on the one hand says that imports created more jobs in the US but won't that apply to them too? Surely what is good for others must be good for china too right? Why the double logic? Please explain the hypocrisy.

You mentioned that chinese gov is holding US bonds. ask yourself, what will happen to China's reserve if Yuan appreciate by 20%? Please go do some reading before shouting and screaming abuot YUAN.

So simply huh? I thought you are going to say china government need money to give ang pao during chinese new year.

When you finish your economic and finance 101, please come back here and read your own post.

sgdiehard SG

no common sense, general knowledge poor, Laughing

sgdiehard SG

For every one manufacturing worker hired in Singapore, a company can hire 3 in Malaysia, 8 in Thailand, 13 in China or 18 in India, tell me, how much should yuan be revalued to make labour costs equal????

how much do you think yuan is devalued? answer this question and you will not need to further show your ignorance and stupidity.

Salman SG

Why would the world want to compete with China? The world is now thinking of how they are going to take advantage of China booming economy not competing for job.

Why? Everybody want jobs, need jobs.
How do you have jobs unless you are competitive?

FYI, china booming economy is not just because of YUAN. Let me ask you how many country is this world is actively lobbying against China's Yuan? beside USA, there is Salman..

A large part of it is due to the Yuan. Otherwise they would not have kept it undervalued.

You have limited knowledge abuot what keep the world spinning so, please just stick to Singapore and answer the simple questions that everybody is asking you...

Aha! I just exposed you pants down putting words where they were not.

Do you know how many people are holding YUAN right now? Just like you, they are hoping that Yuan will appreciate by 20% or more. Once that happen, everybody will sell and Yuan will collapse. Do you know why Dr M peg the riggit against the dollar? For fun? devaluing the riggit so that they can compete with Singapore?

Aha! so you do agree that the Yuan is devalued.
BTW, how do you sell Yuan when it isn't floated?
Do you know the difference between undervaluation and float? Do you know you can revalue or appreciate w/o a float?
Do you understand monetary policies in economics?

You mentioned that chinese gov is holding US bonds. ask yourself, what will happen to China's reserve if Yuan appreciate by 20%? Please go do some reading before shouting and screaming abuot YUAN.

The reserve won't get hurt cos its in USD.
I think you dunno what you are talking about.
What indeed will happen if you appreciate the Yuan is increased domestic consumption and imports and this will boost Chinese economy and regional economy.

So simply huh? I thought you are going to say china government need money to give ang pao during chinese new year.

So why do you think they are privatising banks? Pls explain.

When you finish your economic and finance 101, please come back here and read your own post.

I excelled in economics and finance in school. Thats why I'm running circles around you people and having a lot of fun doing it a little at a time.
Don't you already realise what is happening?

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