Comments on Wang Yong “Avoiding a US-China currency war: Need for rational calculation”, 11/04/2010, http://www.eastasiaforum.org/2010/04/11/avoiding-a-us-china-currency-war-need-for-rational-calculation/
Wang Yong assumes that the US will gain moderately from a trade and currency war between the US and China. It is puzzling how that would be the case.
Exports benefit an economy, so doe imports.
What will the US gain from a reduction in the availability of cheap goods?
What gains will Americans have if they have to pay higher prices for the same goods?
What if China also takes retaliatory measures to restrict exports from the US to China?
So it is difficult to understand the rationale of a possible US gain from a potential trade and currency war.
Wang Yong's presumption may have been based on the wrong premise that leads to the wrong conclusion.
Of course, the US political circles have been used to threat other nations if they don't follow its tune.
One day it will wake up to the new reality that its past practice will not work any more.
That day may be very near now.
Showing posts with label trade protection. Show all posts
Showing posts with label trade protection. Show all posts
2010-04-12
2010-03-19
Threats of a trade war or wars
Comments on Alan Kohler “Trade war sabre-rattling”, 19/03/2010, http://www.businessspectator.com.au/bs.nsf/Article/Trade-war-sabre-rattling-pd20100319-3NRFS?OpenDocument&src=sph
The Americans and their allies are in full play to have possibly their last show of imperialism in their long and inevitable declines, this time not in the military sense but in economic sense.
All we have seen is some sort of threats, that is, how the surplus countries are more likely to lose or unlikely to be the winners, how a trade war can result in a rebalance of the world economy, etc.
Strategic gaming to show their desperation, or scare tactics to scare non-full grown children?
Who cares what they say and what they might do!
Let it happen and we will see another 1930s for some countries.
Yes, undoubtedly there will be a rebalance of the world economy, with acceleration of the declines of some and faster ascendance of others.
Will be fascinating to see!
On Rudd’s public warning on the Stern Hu case, it indicates he has not learnt from his past failures, not just his lecture in China, but also his Copenhagen.
Be mature, and don't use that as a distraction from his domestic problems!
The Americans and their allies are in full play to have possibly their last show of imperialism in their long and inevitable declines, this time not in the military sense but in economic sense.
All we have seen is some sort of threats, that is, how the surplus countries are more likely to lose or unlikely to be the winners, how a trade war can result in a rebalance of the world economy, etc.
Strategic gaming to show their desperation, or scare tactics to scare non-full grown children?
Who cares what they say and what they might do!
Let it happen and we will see another 1930s for some countries.
Yes, undoubtedly there will be a rebalance of the world economy, with acceleration of the declines of some and faster ascendance of others.
Will be fascinating to see!
On Rudd’s public warning on the Stern Hu case, it indicates he has not learnt from his past failures, not just his lecture in China, but also his Copenhagen.
Be mature, and don't use that as a distraction from his domestic problems!
2010-03-17
Martin Wolf lacks common sense
Comments on Martin Wolf “Germany and China aren't making sense”, 17/03/2010, http://www.businessspectator.com.au/bs.nsf/Article/Germany-and-China-arent-making-sense-pd20100317-3M36P?OpenDocument&src=sph
I beg that Martin Wolf is neither a German nor a Chinese.
Further I beg he is emotionally and possibly intellectually closer to the US.
I am even not sure that his common sense is necessarily the common sense other people have or share.
For example, he talks about the potential consequences of the US resort to trad protections. But if one is neutral and is not afraid of the US economically and politically, then why it a common sense that the consequences of US protection would not be equally bad if not more worse for the US itself?
Certainly it does not make sense or is common sense to me! Rather, it lacks common sense!
In terms of possible penalties for fiscal irresponsibility of members in a monetary union like the euro zone, why should there not be a penalty to deter members from behave fiscally irresponsible? If there are no disincentives in place, how can a member be prevented or deterred from behave irresponsibly?
What common sense does Martin Wolf have in his argument?
I beg that Martin Wolf is neither a German nor a Chinese.
Further I beg he is emotionally and possibly intellectually closer to the US.
I am even not sure that his common sense is necessarily the common sense other people have or share.
For example, he talks about the potential consequences of the US resort to trad protections. But if one is neutral and is not afraid of the US economically and politically, then why it a common sense that the consequences of US protection would not be equally bad if not more worse for the US itself?
Certainly it does not make sense or is common sense to me! Rather, it lacks common sense!
In terms of possible penalties for fiscal irresponsibility of members in a monetary union like the euro zone, why should there not be a penalty to deter members from behave fiscally irresponsible? If there are no disincentives in place, how can a member be prevented or deterred from behave irresponsibly?
What common sense does Martin Wolf have in his argument?
2010-03-16
Krugman in actions of practice
Comments on Yiping Huang “Krugman’s Chinese renminbi fallacy”, 15/03/2010, http://www.eastasiaforum.org/2010/03/15/krugmans-chinese-renminbi-fallacy/
Krugman is good and famous at the so called strategic trade. Now he has found an occasion to apply his theories at the world scale.
When I heard or read about Krugman's talking about the Chinese currency versus the $US, I have always been reminded by a remark by Frank Milne (hope it is correct) once at his lecture of microeconomics at the graduate/masters level: economic policies can kill at a mass scale - look at what happened in China during the great leap forward and how many people died as a consequence!
Now Krugman, a winner of the Nobel Prize in Economics, is making his prescriptions to real economic problems and doing his economic advices to the US and possibly to some others.
It will be interesting to anticipate what his advices will result in, even for the Americans whom he tries or intends or has said or is said to help.
A few points to consider in teh context of US external deficits:
1. The US external deficit, is the US having external trade deficit with China? Or is China the largest and for how long it has been as the largest?
2. If China is currency manipulator then it must have devalued its currency against the $US which its currency pegs into. Has China devalued its currency in recent years? Against the $US?
3. Isn't the US a currency manipulator? Haven’t we often heard the US authorities say or have said that they want or wanted strong or weak $US? What do they mean or have they meant? Not a currency manipulator?
4. PPP and currency valuation: it is a general knowledge that most developing countries' GDP is higher in PPP, as opposed to their market currency. Does it mean their currency is undervalued in market terms?
5. The US has been blaming others for its external deficits, that is because they trade with others. Who should it blame for its out of control budget deficits?
6. Why balances, as opposed to imbalances should be the norm? Just think about savings and borrowings, consumptions and investments, why should any unit except the world as a whole be always balanced at all time? Is that good or bad for the living standards and welfares of the world?
7. Why does the US argues for free trade sometimes and say a different thing some other times? Isn't it political economy at the world scale?
8. Why has the US had the lowest and sometimes negative saving rate? Did any other countries force it to do that? Whose fault is it?
Krugman is good and famous at the so called strategic trade. Now he has found an occasion to apply his theories at the world scale.
When I heard or read about Krugman's talking about the Chinese currency versus the $US, I have always been reminded by a remark by Frank Milne (hope it is correct) once at his lecture of microeconomics at the graduate/masters level: economic policies can kill at a mass scale - look at what happened in China during the great leap forward and how many people died as a consequence!
Now Krugman, a winner of the Nobel Prize in Economics, is making his prescriptions to real economic problems and doing his economic advices to the US and possibly to some others.
It will be interesting to anticipate what his advices will result in, even for the Americans whom he tries or intends or has said or is said to help.
A few points to consider in teh context of US external deficits:
1. The US external deficit, is the US having external trade deficit with China? Or is China the largest and for how long it has been as the largest?
2. If China is currency manipulator then it must have devalued its currency against the $US which its currency pegs into. Has China devalued its currency in recent years? Against the $US?
3. Isn't the US a currency manipulator? Haven’t we often heard the US authorities say or have said that they want or wanted strong or weak $US? What do they mean or have they meant? Not a currency manipulator?
4. PPP and currency valuation: it is a general knowledge that most developing countries' GDP is higher in PPP, as opposed to their market currency. Does it mean their currency is undervalued in market terms?
5. The US has been blaming others for its external deficits, that is because they trade with others. Who should it blame for its out of control budget deficits?
6. Why balances, as opposed to imbalances should be the norm? Just think about savings and borrowings, consumptions and investments, why should any unit except the world as a whole be always balanced at all time? Is that good or bad for the living standards and welfares of the world?
7. Why does the US argues for free trade sometimes and say a different thing some other times? Isn't it political economy at the world scale?
8. Why has the US had the lowest and sometimes negative saving rate? Did any other countries force it to do that? Whose fault is it?
2009-09-15
Does WTO have any tooth?
Comments on Alan Kohler “Obama's perilous protectionism”, 15/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/China-America-marraige-hits-the-rocks-pd20090915-VVSFV?OpenDocument&src=sph
It would be interesting to see what the WTO should say on the US new tariff on Chinese Tyers.
Does the WTO have any tooth to enforce its own rules, especially when it deals with world most powerful economies like the US?
It would be interesting to see what the WTO should say on the US new tariff on Chinese Tyers.
Does the WTO have any tooth to enforce its own rules, especially when it deals with world most powerful economies like the US?
2009-07-26
Wake up to reality, union leaders
Comments on Janet Albrechtsen “Buy Australia sells us short”, 26/07/2009, http://blogs.theaustralian.news.com.au/janetalbrechtsen/index.php/theaustralian/comments/buy_australia_sells_us_short/
The intelligence of union leaders have not advanced much from the old days in the long past. Their less interest in keeping up with the changed reality means increasing irrelevance to modern Australians. Less relevance means falling memberships.
They need to wake up to the reality of the 21st century to be relevant and to best represent the interests of their members. The world is increasingly integrated and trade plays a very important role in improving the well beings of all nations including Australia.
Some recent studies have shown that trade with China increased Australians’ real income by thousands dollars. Australia is the only advanced countries that has avoided technical recession so far, largely due to China’s imports of minerals like iron ore from Australia.
What the unions want to do is to undermine those benefits. If they continue to push their silly ideas, they will be left completely behind by Australians.
Grow up, union leaders.
The intelligence of union leaders have not advanced much from the old days in the long past. Their less interest in keeping up with the changed reality means increasing irrelevance to modern Australians. Less relevance means falling memberships.
They need to wake up to the reality of the 21st century to be relevant and to best represent the interests of their members. The world is increasingly integrated and trade plays a very important role in improving the well beings of all nations including Australia.
Some recent studies have shown that trade with China increased Australians’ real income by thousands dollars. Australia is the only advanced countries that has avoided technical recession so far, largely due to China’s imports of minerals like iron ore from Australia.
What the unions want to do is to undermine those benefits. If they continue to push their silly ideas, they will be left completely behind by Australians.
Grow up, union leaders.
2009-07-25
Trade and politics
Comments on Philippa Dee “Can the global financial crisis actually deliver Doha?” 23/07/2009, http://www.eastasiaforum.org/2009/07/23/can-the-global-financial-crisis-actually-deliver-doha/
It is true that trade improves the well beings of all trading nations. It is also true that when an economic hard time or crisis hits, the pressure becomes higher to sacrifice trade for domestic political purposes. So Jagdish Bhagwati has a point to make.
It, however, does not mean that it is less important for world leaders to make greater efforts to bring the Doha round to a successful conclusion. They need to show true and greater and stronger leadership, especially in this harder economic environment. Although politically less popular, improved international trade is good for more speedy recovery from the crisis.
What puzzles me is why trade has been affected much more severely by the financial and economic crisis. Trade in some quarters in some countries declined by 40 or even 50 per cent. Surely their economies would not have fallen by that much in those quarters.
Dee has argued the role of finance. Maybe that is the case that finance plays a greater role in international trade than in domestic trade, so when finance becomes difficult, international trade is hit harder.
I would appreciate that someone can explain the relationships between finance and trade, both external and internal.
It is true that trade improves the well beings of all trading nations. It is also true that when an economic hard time or crisis hits, the pressure becomes higher to sacrifice trade for domestic political purposes. So Jagdish Bhagwati has a point to make.
It, however, does not mean that it is less important for world leaders to make greater efforts to bring the Doha round to a successful conclusion. They need to show true and greater and stronger leadership, especially in this harder economic environment. Although politically less popular, improved international trade is good for more speedy recovery from the crisis.
What puzzles me is why trade has been affected much more severely by the financial and economic crisis. Trade in some quarters in some countries declined by 40 or even 50 per cent. Surely their economies would not have fallen by that much in those quarters.
Dee has argued the role of finance. Maybe that is the case that finance plays a greater role in international trade than in domestic trade, so when finance becomes difficult, international trade is hit harder.
I would appreciate that someone can explain the relationships between finance and trade, both external and internal.
2009-07-24
The unions should be smarter to survive
Comments on ABC report “Unions bury hatchet for 'Buy Australian' push” by Alexandra Kirk, 24/07/2009, http://www.abc.net.au/news/stories/2009/07/24/2634983.htm?section=justin
It is reported that “The nation's two biggest blue collar unions have not always got along, but they are burying the hatchet in a bid to save jobs in Australia's manufacturing industry, which has lost more than 70,000 positions in the past year.”
“The unions - one from the right, the other from the left - have bridged their ideological divide and will appear as a united front at next week's ALP national conference to maximise pressure on the Government to back their manufacturing strategy and to give priority to locally produced goods.”
The unions have done good and bad things over its history to date. But they should learn or evolve fast in the 21st century. They should embrace globalisation and improve and maximise the well beings of Australians through specialisation and trade according to Australian's comparative advantages. They should not live in the past and ignore the modern reality.
They say 76,000 jobs have lost out of industry over the past 12 months. But why don't they say how many have been saved due to higher than expected demand from China? Why Australia is having a much lower unemployment rate than most other OECD countries?
If Australian governments do what the unions ask, then other countries will retaliate. What will be the consequences of those actions and interactions? Did they say anything count that?
They should reasonable and rational.
If they want to last, they'd better be strategic and truly smarter than they are.
It is reported that “The nation's two biggest blue collar unions have not always got along, but they are burying the hatchet in a bid to save jobs in Australia's manufacturing industry, which has lost more than 70,000 positions in the past year.”
“The unions - one from the right, the other from the left - have bridged their ideological divide and will appear as a united front at next week's ALP national conference to maximise pressure on the Government to back their manufacturing strategy and to give priority to locally produced goods.”
The unions have done good and bad things over its history to date. But they should learn or evolve fast in the 21st century. They should embrace globalisation and improve and maximise the well beings of Australians through specialisation and trade according to Australian's comparative advantages. They should not live in the past and ignore the modern reality.
They say 76,000 jobs have lost out of industry over the past 12 months. But why don't they say how many have been saved due to higher than expected demand from China? Why Australia is having a much lower unemployment rate than most other OECD countries?
If Australian governments do what the unions ask, then other countries will retaliate. What will be the consequences of those actions and interactions? Did they say anything count that?
They should reasonable and rational.
If they want to last, they'd better be strategic and truly smarter than they are.
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