September 15, 2010
CURRENCY MANIPULATORS
Twenty-five years ago the USA forced Japan to appreciate its currency in order to correct its own bad books by fixing (temporarily) America's current account deficit. The Plaza Accord of 1985 led to rampant speculation in the Yen and a financial crisis and depression from which the Japanese have yet to recover. From the sidelines, having secured the return of Hong Kong and its capital, Beijing watched and learned.
Since the dotcom bubble popped and jobless recoveries, booms, and busts have America stalled, certain political factions believe that if Uncle Sam can force a similar appreciation of the Yuan on Beijing the American Dream can be saved. Chief among the politicians is Chuck Schumer (D-NY) and his chorus of taxpayer funded think tank reports and leading talking heads. One of the biggest proponents of the China tariff clique is Nobel Prize winning economist Paul Krugman. Krugman used his NY Times column again today to call for tariffs on Chinese goods deciding that one lesson from the Great Depression - the Smoot-Hawley Act - is not worth heeding.
I've written many posts and Sinomania! Show episodes on the futility of trying to force Beijing's hand on Yuan. Do a search here and on the Sinomania! website and you'll come up with the same conclusion. America cannot fix its problems by manipulating international forex markets. Beijing unlike Japan is not America's satellite and cannot be told what to do and is not afraid of Washington. And the biggest reason why people like Krugman and Schumer know that the issue is just hot air is not the "threat" of a "nuke option" - Beijing selling its holdings of US Treasury securities - but because the average American mired in a deep recession can't afford to pay two and three times for all the stuff they buy from WalMart, Target, IKEA, and everywhere else!
Further the accusation that Beijing manipulates the Chinese currency is complete hypocrisy when Washington and Tokyo both do the same. Just yesterday Tokyo intervened in forex markets for the first time in years to stop Yen appreciating. And Washington deliberately devalues the dollar (what W called the "strong dollar" policy) to support American exports and reduce the value of its debts.
Labels: currencies, financial crisis, forex, free trade, japan, schumer, yuan
September 14, 2010
Lawson to Open Nearly 100 Stores in Chongqing
Japan's second biggest convenience store operator Lawson plans to open another 130 stores in China by end 2011 - 97 of them in Chongqing alone (the remainder in Shanghai). Lawson is a poster child of multinationalism starting as an outlet for an Ohio dairy farmer, being known for decades as Dairy Mart, Circle K, and owned by American, Canadian, and Japanese conglomerates. Lawson is making a big push into Chongqing municipality -- China's fastest growing big urban market...
Labels: foreign investment, foreign trade, japan, spending
March 08, 2010
China Gets North Korean Port on Sea of Japan
The provincial government of Jilin Province in Manchuria told the National People's Congress today that the North Korean government agreed to lease the port of Rajin on the northeastern coast of the Sea of Japan to China for 10 years. Use of the port will give sea access to the landlocked hinterlands of Manchuria for the first time since the collapse of the Qing Dynasty. Rajin is included in economic and trade zones originally created as part of the UN sponsored Tumen River Area Development Programme between Russia, China, and North Korea. Russia is upgrading a railway from the border to Rajin in what may be competing investment. Chinese development of Rajin port could jump start the Tumen River region. This development has important implications for the economy and navy balance in the region....
Labels: exports, japan, russia, shipping, strategic
October 09, 2009
China-Korea-Japan Summit
East Asia's 'big three' renew a push for greater regional collaboration this weekend with a tri-partite summit in Beijing hosted by Chinese PM Wen Jiabao. Already Japanese PM Hatoyama and (South) Korean President Lee met in Seoul today. On the table for Saturday will be new talks on the concept of creating an EU style economic unit with perhaps someday a united currency....
Labels: foreign relations, japan
September 22, 2009
Greater Chinese Prosperity Zones
New York is the scene for a blizzard of China pow wows as President Hu Jintao met with the new Japanese Prime Minister Hatoyama and President Obama. Hatoyama waxed eloquently about turning the East China Sea into a "sea of fraternity" and proposing the creation of an East Asian Community based on the EU model. Hu invited Hatoyama to Beijing for a regional summit in December.
Meanwhile Obama and Hu met again on the sidelines of the UN and made no mention of recent trade disputes. Both reiterated with little enthusiasm the desire for cooperation. Obama will visit China in November.....
Labels: foreign relations, hu jintao, japan, obama, un
August 31, 2009
Japan Ends One Party Rule - DPJ to Focus on China Ties
The landslide victory of the Democratic Party of Japan (DPJ) over the Liberal Democratic Party (LDP) cannot be overlooked. One party rule has ended in Japan. The LDP has run Japan since 1955 not long after the USA ended its occupation. The DPJ has a long history of relations with China. The man most likely to be the new Japanese Prime Minister, Yukio Hatoyama, said on the campaign trail he would not honor Japan's World War II dead (considered war criminals by many Asian nations) at the Yasukuni Shrine, long a point of contention with Beijing. And Hatoyama has said he wants to emphasize Sino-Japan ties and views the future as a multi-polar world. Are the days of the reliable Japanese satellite waning for the USA....?
Labels: democracy, foreign relations, japan
May 27, 2009
Japan Improves on China Trade
China is key to recovery in the Japanese economy as it is Japan's number 1 export market. Indications are the dramatic drop in exports to China (not nearly as dire as the near 50% drop in exports to USA in April) has slowed. The data is mixed and far from a definite up trend. But signals are the bottom may have been reached at least in terms of Japan-China trade....
Labels: chinese trade, exports, japan
April 29, 2009
China-Japan Bilateral Talks Urge Currency Swaps
PMs Wen Jiabao (China) and Taro Aso (Japan) are meeting in Beijing and both nations are pressing for closer economic cooperation. China is Japan's number 1 trading partner now and hard hit by the decline in Chinese imports. Wen urged greater expansion of the Chiang Mai Initiative of bi-lateral currency swaps originally devised during the so-called Asian Flu of 1997-98 and its aftermath. This is further evidence of Beijing's desire to solidify capital flows based on the declining US dollar....
Labels: currencies, foreign exchange, foreign trade, japan
February 17, 2009
Energy Security: Russia China Oil Deal On
When first announced last October by PM Wen Jiabao $25 billion in loans was proposed from China National Petroleum Corp. to Roseneft for a pipeline directly from the emerging eastern Siberia oil fields to connect with China's oil pipeline and refinery centers. As announced today Roseneft will get $15 billion (US dollars) and Transneft - Russia's pipeline monopoly - $10 billion. When complete, China will get a steady supply of crude oil for 20 years. This is a major blow to the Japanese government which tried for years to prevent a pipeline direct to China...
Labels: asian energy security grid, energy security, japan, oil, peak oil, russia
May 08, 2008
China, Japan Announce "Common Strategic Interests"
The first state visit by a Chinese President in a decade has led to a joint agreeement for "Consolidating Exchange and Cooperation Between Japan and China" including a possible end to disputes over the gas and oil riches under the East China Sea. Discussions between Hu Jintao and Japanese Prime Minister Yasuo Fukuda today reveal the two sides may agree to jointly develop the gas and oil of Shirikaba gas field and other disupted areas.
Labels: china, fukuda, global security, hu jintao, japan, oil
February 15, 2008
Japan Forex Reserves Growing "Suspiciously Fast"
Morgan Stanley believes the net result is not stealthy intervention but skillful day trading of Yen/Euro positions and that the data reveals Japan is diversifying away from the US Dollar to over 20% Euro composition in its foreign exchange reserves."Japan’s reserves are growing suspiciously fast. Japan’s foreign reserves expanded from US$946 billion in September 2007 to US$996 billion in November, an increase of US$50 billion in four months. Assuming a 2.5-3.0% return on the underlying assets, Japan should only be enjoying US$25-30 billion in annual investment earnings, or US$6-8 billion a quarter. Further, it is widely assumed that Japan has the bulk (90%) of its reserves in USD, and the MoF never diversified away from USD. With such low holdings of EUR, valuation changes – from the rise in EUR/USD – should not have been a major factor generating gains in reserves. Indeed, what is embedded in our reserve tracker file assumes 90% USD holdings. Our presumptive calculations identified a US$13.7 billion gain during September-January due to the returns on the underlying assets, and another US$18 billion from valuation changes, leaving US$18 billion of the reserve increases unexplained by our metric. Could the MoF have conducted secretive interventions worth US$18 billion? "
If true, this raises another interesting question: Is America's loyal Asian satellite dumping the Dollar?
Labels: currencies, euro, foreign exchange, forex, globalization, japan
February 08, 2008
Japan's Scientific Killing Spree
Japanese whaling is about as "scientific" as the experiments on Chinese in Manchuria in the '30s and '40s.
It's time to end the Japanese genocide on whales.
Labels: genocide, japan, whales, whaling
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