Why are 'things' from China so cheap?

[Michaelangelica]

I think the Chinese currency is undervalued.

It is 'pegged' by the Chinese government.

It does not "float" on the world market

This makes it cheaper to buy Chinese goods, But imported raw materials are dearer.

 

If China let her currency float she would loose that amount (%) of her foreign exchange reserves. Which is in the Billions

She seems to be between a rock and a hard place.

Perhaps she needs to let her currency slowly rise in value.

(Or buy O.S. resource companies -which she may be doing in Africa)

 

I note her CO2 emissions now rival the USA.

Not really bad for a country of some billions Vrs. one of some 280 million

[Michaelangelica]

Sunday 01 July 2007

 

Listen Now - 01072007 | Download Audio - 01072007

Will Hutton on The Chinese Bubble

 

China's titanic rise is the biggest news since the Industrial Revolution. Developed nations are in awe. Some, like the United States, are in fear. However, according to writer and long time China-observer Will Hutton Western anxieties are misplaced. Hutton sees China sitting on the edge of a very deep precipice. He cites endemic corruption, environmental depredation, widening inequality, and insufficent job creation as just some of the challenges threatening to bring China undone. Join us for a spirited naysaying of the Chinese revolution, with Will Hutton at a business breakfast in Sydney.

Sunday 01 July 2007

 

Big Ideas

Sunday 5pm, repeated Saturday 7pm

Big Ideas brings you lectures, conversations, features and special series from Australia and around the world.

http://www.abc.net.au/rn/bigideas/

[Boerseun]

Ironical, too, is that even with China's economy growing like a monkey on 'roids, the Chinese economy must be five to six times that of the US' economy for it to be the same as the US per capita, simply because there's one hell of a lot of people in China!

 

So, don't let the reports confuse you. For a long time yet, China will be a country of poor people, regardless of it's GDP being bigger than the US.

[Michaelangelica]

Ironical, too, is that even with China's economy growing like a monkey on 'roids, the Chinese economy must be five to six times that of the US' economy for it to be the same as the US per capita, simply because there's one hell of a lot of people in China!

 

So, don't let the reports confuse you. For a long time yet, China will be a country of poor people, regardless of it's GDP being bigger than the US.

 

Still a while to go eg:-

#1 United States: $11,667,515,000,000.00

#2 Japan: $4,623,398,000,000.00

#3 Germany: $2,714,418,000,000.00

#4 United Kingdom: $2,140,898,000,000.00

#5 France: $2,002,582,000,000.00

#6 Italy: $1,672,302,000,000.00

#7 China: $1,649,329,000,000.00

#8 Spain: $991,442,000,000.00

#9 Canada: $979,764,000,000.00

#10 India: $691,876,000,000.00

#11 Korea, South: $679,674,000,000.00

 

China has only just caught up with USA pollution levels

NationMaster - Statistics > GDP > Nominal by country

 

• China’s GDP equals that of California, Oregon, Washington State and Nevada – oh, and Alaska and Hawaii

135 - Update On the GDP Map of the USA « strange maps

 

The wealth gap in China between its urban and rural citizens is now one of the largest in the world. Farmers pay their own health care and education costs, meaning their real incomes are a sixth of China’s urban residents. Democracy remains the last priority for the Chinese Government.

 

Some believe that China’s continuing focus on economic reform, without a democratic system

. . . .

Democracy is not a concept inherent in Chinese culture or political philosophy.

The goal of 'democracy with Chinese characteristics' - On Line Opinion - 5/7/2007

[Boerseun]

I read the last link in your previous post, and I must say that I agree fully on the point that democracy will only work in China provided it's a "Chinese-flavoured" Democracy. Too often the idea of "Democracy" have been imposed on a country either not ready for it, or culturally alienated to the concept, ending up in the disasters you see around Africa today.

 

Not all countries are alike, not all societies are alike, and not all political systems are all good or all bad. A mix might be just what the doctor ordered.

[Racoon]

I read the last link in your previous post, and I must say that I agree fully on the point that democracy will only work in China provided it's a "Chinese-flavoured" Democracy. Too often the idea of "Democracy" have been imposed on a country either not ready for it, or culturally alienated to the concept, ending up in the disasters you see around Africa today.

 

Not all countries are alike, not all societies are alike, and not all political systems are all good or all bad. A mix might be just what the doctor ordered.

 

Have you ever taken the Communist Party Oath?

 

China is as rife with corruption, unscrupulous practices, and pollution as any "Superpower" there ever was..

 

Thinking an exponentially rising China is a good thing to offset American Power is ridiculous. Its more of the same and usually worse!

Worse labor practices. worse product and environmental control..

They don't benefit humanity by their International policies.

 

What is China's contributions to philanthropical endevours across the world??

I'd be very curious.

You can complain, Boerseun, about Bill Gates giving billions to Africa, but I don't see the Chinese reallly trying to help out around the world..

 

Its in the Globalists hands at this point already . :hihi:

[LaurieAG]

Not all countries are alike, not all societies are alike, and not all political systems are all good or all bad. A mix might be just what the doctor ordered.

 

A good point Boerseun.

 

In Afghanistan, East Timor and Iraq recently (to name a few) the people have voted at referendums to change their sovereignty status and introduce democracy.

 

In Australia we have a democracy but our people never got the opportunity to vote at a referendum to change our sovereignty status.

 

Despite the differences in the treatment of 'democracy' and sovereignty status in such vastly different countries as Australia and Iraq, a high proportion of citizens in both countries think that the occupation of Iraq should stop (and troops should be withdrawn), but our 'democratic' politicians think otherwise.

[Buffy]

China is as rife with corruption, unscrupulous practices, and pollution as any "Superpower" there ever was..

Yah, but I love what they do with their corrupt politicians... Wish they'd do that here, but it would be considered "excessive" unless they were Democrats....

 

Obstruction of Justice,

Buffy

[Boerseun]

Have you ever taken the Communist Party Oath?

...yada yada yada...

Its in the Globalists hands at this point already . :)

I don't completely follow you there, Rac. China is today prolly one of the biggest investors and employers in Africa. You might not agree to their labour practices in China itself, but all member states of the African Union are bound to minimum wage laws and fair labour practices. Whether it's consistently applied across the board is not guaranteed, obviously, similar to every in every other country in the world, the US included.

 

Methinks the Racoon doth protest too much.;)

[C1ay]

They're cheap according to your standard of living in your country. The value to them is higher than what you've paid...

[Michaelangelica]

China is as rife with corruption, unscrupulous practices, and pollution as any "Superpower" there ever was..

 

Thinking an exponentially rising China is a good thing to offset American Power is ridiculous. Its more of the same and usually worse!

Worse labor practices. worse product and environmental control..

They don't benefit humanity by their International policies.

 

I tend to agree with you but they are changing especially on the environment front, possibly faster than the USA

I like to live in a society which has some modicum of free speech; although I see that being eroded daily by Corporate media takeovers, government paranoia and excessive secrecy and restrictive "anti-terror" laws.

So I would not like to live in China, whose "free speech" and human rights record is slightly worse than ours.

 

What is China's contributions to philanthropical endevours across the world??

I'd be very curious.

You can complain, Boerseun, about Bill Gates giving billions to Africa, but I don't see the Chinese reallly trying to help out around the world.. :doh:

Just saw a TV show about Chinese buying up copper in Zambia? Pretty terrible conditions but a lot of that the fault of the local Governments inability to enforce labor laws

 

On philanthropy, they have a lot of ground to make up as many Chinese live in appalling,abject poverty.

BUT

Jonathan Watts in Beijing

Wednesday December 15, 2004

The Guardian

 

China is set to complete the transition from aid recipient to international donor in the next year,

China has been a significant contributor to relief operations in other countries over the last few years. Mostly the aid has come in the form of materials and medical care, but also in cash. According to the article published on the web site of Papua New Guinea's Embassy to the Americas, China's aid policy is one that fosters equality and mutually-beneficial development.

 

This year, China has again generously offered a helping hand to those in need. The Calibre writes that is has donated almost 40,000 euros to flood ravaged Uruguay. In March, China gave about 6 million euros in aid to Jordan for upgrading a local water supply network, CRI Nordic reports. China.org reveals that in the first 11 months of 2006, Chinese foreign aid extended to a total of 86 developing countries.

 

China takes up civic work in Africa

It's sending 1,809 UN peacekeepers and 300 volunteers in a new Chinese 'peace corps' program.

By Danna Harman | Correspondent of The Christian Science Monitor

The number of Chinese peacekeepers worldwide is much smaller than the number that Pakistan supplies the UN – currently 10,173 according to UN statistics – or India, which has sent 9,471 of its nationals to participate in most of the UN's 15 current missions worldwide.

 

But, it's more than South Africa (1,188 blue helmets) or Brazil (1,277) have in the field – and far more than the US, which, unlike 118 other countries, puts no boots on the ground. (The US does, however, provide the largest chunk of the funding for these missions – 26 percent of the total. China, in turn, provides 3 percent.)

Since 2000 China has canceled more than $10 billion in debt for 31 African countries and has given $5.5 billion in development aid, with a promise of a further $2.6 billion in 2007-08, according to estimates by the Economist Intelligence Unit.

 

Beijing has overtaken the World Bank in lending to Africa: In 2005, China committed $8 billion in lending to Nigeria, Angola, and Mozambique alone – the same year the World Bank spent $2.3 billion in all of Africa.

 

In 2006, lending by China's Exim Bank was $12.5 billion – and is set to rise by more than $5 billion in 2007, according to the EIU estimates.

 

The loans China offered Africa in 2006 were three times the total development aid given by rich countries in the Organisation for Economic Co-operation and Development (OECD),

and nearly 25 times the total stock of loans and export credits approved by the US Export-Import Bank for sub-Saharan Africa

China takes up civic work in Africa | csmonitor.com

Times Select Content China Competes With West in Aid to Its Neighbors

By JANE PERLEZ

 

Eager for stable friends, China is making big loans for big projects in poor Asian countries, competing with the World Bank at its own game.

September 18, 2006 World News

Not a bad effort, in a few years really, maybe they remember what being poor feels like?

 

On the OATH

It sounds a bit like something I hear Americans reciting

Of course to take it in the USA would probably be illegal and would certainly reduce your job opportunities.

Article 20: Oath to the Proletariat and Party

 

Article 20.1 Upon joining all members must swear the following oath:

 

I, as a member of the International Communist Party, do hereby swear allegiance to the Socialist cause.

I pledge both myself and my nation in the fight against Capitalist and Imperialist oppression. The International Communist Party is the torch that shall spark the Revolution.

I shall defend the Party and its cause with all the resources at my disposal. I shall not take up arms against my brethren, nor will I disobey the mandates of the General Congress.

I will honour the rules laid out by the Constitution of our Alliance, and swear obedience to its Laws. I pledge my life and my honour to the good of the Proletariat, for it is through them that the Party is made strong. Let my comrades bare witness to this oath.

[Michaelangelica]

Sunday 01 July 2007

 

Listen Now - 01072007 | Download Audio - 01072007

Will Hutton on The Chinese Bubble

 

China's titanic rise is the biggest news since the Industrial Revolution. Developed nations are in awe. Some, like the United States, are in fear.

However, according to writer and long time China-observer Will Hutton Western anxieties are misplaced. Hutton sees China sitting on the edge of a very deep precipice. He cites endemic corruption, environmental depredation, widening inequality, and insufficent job creation as just some of the challenges threatening to bring China undone.

Join us for a spirited naysaying of the Chinese revolution, with Will Hutton at a business breakfast in Sydney.

Big Ideas

[Racoon]

I don't completely follow you there, Rac. China is today prolly one of the biggest investors and employers in Africa. You might not agree to their labour practices in China itself, but all member states of the African Union are bound to minimum wage laws and fair labour practices. Whether it's consistently applied across the board is not guaranteed, obviously, similar to every in every other country in the world, the US included.

 

Methinks the Racoon doth protest too much.:)

 

I've seen that investment as well.

Granted in documetaries and not in real life..

My apologies..

 

But lets just say Communism and Labor practices don't go hand in hand with beneficial prosperity for all concerned.

 

Conversely, with whats happened in Africa from the Western influence, it isn't a greater picture painted either. :hihi::doh:

 

I guess Africa is just doomed to being screwed and exploited. ;)

[InfiniteNow]

A good story on NPR Morning Edition today. An author and her family went an entire year without purchasing anything made in China, or anything which contained ingredients from China.

 

NPR : Life Without Goods Made in China a Challenge

 

A Year Without "Made in China": One Family's True Life Adventure in the Global Economy chronicles how Sara Bongiorni and her family tried to live without buying anything produced in China.

 

Listen here:

NPR Audio Player

 

 

 

 

 

The authors book:

Amazon.com: A Year Without "Made in China": One Family's True Life Adventure in the Global Economy: Books: Sara Bongiorni http://www.amazon.com/Year-Without-Made-China-Adventure/dp/0470116137

[Michaelangelica]

Keri Phillips: China's huge trade surplus, and the high levels of foreign investment, should, in theory, have pushed up the value of its currency, but because this would make China's exports more expensive, the Chinese government has tied the yuan to the US dollar, keeping it artificially low.

Nicholas Lardy: Just in the last three or four years, the Chinese currency has become very, very under-valued, and this has provided a significant boost for China's exports.

 

Now a lot of people make statements that China's been doing this for decades, it's the old East Asian pattern, but that's not really true.

China's currency for all of the 1980s and for much of the 1990s, was actually over-valued, which meant they were penalising exporters and subsidising importers.

 

Then they went to more of an equilibrium kind of exchange rate in the mid-1990s and that served them fairly well for a number of years.

But in the last three to four years, their currency, because it's been tied to the dollar, has become significantly under-valued.

 

Remember, the dollar has been declining since its peak of February 2002, and since China was tied to the US dollar it has gone down with the value of the dollar, and more recently, combine that with the very high growth of productivity, and that has meant that Chinese goods have become more and more competitive on global markets.

 

And as of last year, this is reflected in the fact that China has now the biggest global current account surplus, the current account is the most comprehensive measure of a country's trade and other non-financial transactions with the rest of the world; they had a current account surplus that was $250-billion last year; this year it will be more than $400-billion, and as the size, relative to the size of its economy, China's surplus now is about three times the all-time high the Japanese had in the mid-1980s before their currency began to appreciate.

 

So their currency has gone badly off the track, since really about 2002, and 2003, and so they now have a very, very large trade surplus and a global current account surplus.

 

And this sounds a little bit abstract, but the important thing is that eventually the currency will have to come back closer to its true value, and when that happens, a lot of the investments that were made when the currency was at a disequilibrium value, will not be economically viable.

In other words, today the currency vis-à-vis the dollar is about 7.5, but if it went to 5, a lot of exports that seem to be profitable today would not be profitable because the dollar that you earn from selling on the domestic market would only translate into 5 Chinese domestic currency units, whereas today it translates into 7.5.

And since you need to pay for your labour and your inputs and your electric bill and so forth in domestic currency, if you're only earning 5 instead of 7-1/2, that's a very significant difference.

 

Keri Phillips: Why has China tied its currency to the US dollar?

 

Nicholas Lardy: I think it's been probably the most significant policy error that has been made in the last 30 years.

What they really have failed to recognise is that when they're pegged to the dollar and they have very, very rapid productivity growth, as particularly has been true over the last decade, their goods will become more and more competitive, and they'll have a bigger and bigger global surplus.

And it is I think simply explained, as I said, the biggest policy error that they've made in the last 30 years.

Keri Phillips: What are the long-term implications of this relationship between these two economic and political giants?

 

Nicholas Lardy: I think the biggest long-term risk is that these global imbalances will not be sustainable.

RN Rear Vision - 18 November 2007 - Economic embrace: China and the US

 

Is the Chinese currency tied to the US dollar- or to a basket of currencies including the US $?

[Jet2]

It sounds like every product made in China is harm to the environment...

It looks like most cheap labour in China are children especially those work 15h a day...

It seems like China Gov is the worst guy in World economy...

 

China open policy is still in progress. But things are improving here.

It's really not what you think that bad.

And you just cannot expect things totally change overnight.

 

See it for yourself if happen you have chance to come visit China.

Don't be misleaded by media especially those prejudiced ones.

 

Reasons why China product is so cheap has many reason.

Cheap labour is definitely one of them but it just doesn't mean they are mostly children labour. Think about how big a population we have here and how many percentage of them are uneducated former farmers. And these days 'cheap labour' is no longer an advantage for China for many other Asain countries can supply cheaper ones. Like Vietnam, Laos and Cambodia to name just a few.

 

As a consumer I think no one would mind if China product (providing they are in good quality) is being cheap. And I can tell you not to worry, China products are getting uncheap everyday. Just remember don't blame it one day when they became 'expensive' for we may say you asked for it.

 

And yet more and more oversea famous brand high end products are [Made in China] today. But then of course you can think they are not [from China]...

[Michaelangelica]

I thought you were from Afghanistan, not China, jet2?