Seems like you are still quite in-confident, are you?
What makes you confused? You are not confident about the quality of the Chinese product, or the mechanism of the inflexibility of China currency, or you are just doubting the consiparacy behind the USD?
I will say, keeping pace to gradually increase (70% of the annual growth minus the inflation rate) the value of RMB will adequately promote the best interest of China...
I don't think I have used the term "rapid" in my previous post. Instead, "gradual" should be my meaning...
Anyway, here is what I think...
1) No country will allow long term trading deficit (negative money flow) to the other country. China government manually/artifically setting the exchange rate that low will ultimately hurt other countries.
2) At such low exchange rate, Chinese exporters will benefit from the price advantages. However, at the same time, some of the products are over produced. I think keeping those low end and excessive products down the production chain is worthless (and harmful), that's why 溫總理 insist the importance of increasing the quality portion of GDP instead of the quantity of GDP. A gradual increase in RMB will increase the rate for those overproduction to transform. The consolidation of production is unavoidable, and should be faster, otherwise there is a chance of 尾大不掉.
3) The increase of RMB will lower the inflation rate, and it will ignite the internal demand.
發表於 2011-4-19 14:04
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