Even If China Changes Currency Policy, U.S. Jobs Are Gone for Good
As Treasury Secretary Timothy F. Geithner and Chinese leaders waltzed delicately around the subject of the low valuation of the Chinese yuan at talks in Beijing Monday, a number of things became clear. First, China isn’t going to increase the value of its currency sharply, despite demands from the U.S. Congress to let the yuan float upwards and allow the market to set its exchange rate against the U.S. dollar.
More importantly, even if China does increase the value of the yuan marginally, it won’t bring back all those American manufacturing jobs that have been offshored to China over the past decade and a half.
“China right now has a labor cost advantage,” says Mark J. Perry, a visiting economist at the American Enterprise Institute in Washington, D.C. “Revaluation would make them less competitive. What then might happen is things like clothing and manufacturing would shift outside China over into other, newer low-cost countries like Vietnam, India and Bangladesh, not back to the U.S. I don’t think we can expect manufacturing jobs to come back to the United States. That’s just unrealistic.”
The yuan has been fixed against the dollar since the summer of 2008. A number of leading economists maintain that this level grossly undervalues the Chinese currency and gives it an unfair advantage in exports. C. Fred Bergsten, a distinguished scholar at the Washington, D.C.-based Petersen International Institute of Economics, argues that the yuan is undervalued about 25% on a trade-weighted basis and 40% against the dollar.
Bergsten maintains that if the yuan were to appreciate by 25% to 40%, this would reduce the U.S. current account deficit, a measure of trade plus financial flows, by $100 billion to $150 billion and create 600,000 to 1.2 million U.S. jobs.
Change Comes Slowly — If At All
That kind of dramatic currency change is just not going to happen. In Beijing on Monday, President Hu Jintao opened two days of talks with the Obama administration by repeating his country’s past position that the exchange rate of the yuan, which is also called the renminbi, will be changed only slowly.
“China will continue to steadily push forward reform of the renminbi exchange rate formation mechanism in an self initiated, controllable and gradual manner,” he said. In other words: No change.
Geithner was surprisingly upbeat considering that his gentle pressure to revalue the yuan had been more or less rebuffed.
“We welcome the fact that China’s leaders have recognized that reform of the exchange rate is an important part of their broader reform agenda,” Geithner said. “Allowing the exchange rate to reflect market forces is important not just to give China the flexibility to sustain economic growth with low inflation, but also to reinforce incentives for China’s private sector to shift resources to more productive, higher value-added activities.”
Bad for Manufacturers = Good for Consumers?
Perry and a number of other economists maintain that the fact that China undervalues the yuan against the dollar is really a huge benefit to the U.S. “It’s like giving us a discount on their products,” Perry says. “There is some loss to American manufacturers, but it’s a huge gain to American consumers and American companies that are buying inputs from China.”
He points out that while we often think of Chinese exports largely as such things as cheap toys and clothes, the fact is that more than half of imports are used by American manufacturers to make finished goods that are then re-exported to the world.
Perry also points out that it is Chinese labor costs, not the exchange rate, that make China so attractive to American manufacturers. The average daily wage of U.S. workers is $135 when all benefits are counted, which is the average monthly income of Chinese workers.
“It’s the low-cost labor in relation to their productivity that is attractive to American companies,” Perry says. “Even if there was a 5% or 10% adjustment, which is all we could expect to get out of renegotiating their currency rates, that wouldn’t be enough to really have any meaningful effect on trade flows. It would still be a bargain to U.S. consumers and U.S. buyers.”
PHOENIX Suns
PHOENIX — After the Lakers fell to the Suns in Game 3 behind a dominant 42-point performance from Amar’e Stoudemire, I asked Kobe Bryant if he thought that Phoenix needed to get a game like that out of someone to beat the Lakers, who most consider to be the more talented team. I thought so, but Bryant didn’t. He felt the Suns had enough weapons to get a more collaborative effort and still come out on top.
As it turned out, Bryant was right. The Suns got 54 points out of their bench and had six players finish in double figures as Phoenix evened the series with L.A. at two games apiece with a 115-106 victory on Tuesday.
Bryant was masterful, entering the final quarter with 31 points, seven rebounds and seven assists. But he didn’t get involved in the fourth until it was too late, failing to score his first points of the final period until making a free throw with 2:37 to play with his team down by eight.
Hero Of The Day
Channing Frye couldn’t hit a shot through the first three games of the series and was 1 of 20 from the field heading into Game 4. But he finally got going in the second quarter, hitting a three-pointer with 7:00 left in the period that extended the Suns’ lead to 41-34. This obviously excited the rest of his teammates, who followed Frye’s three with bombs from Jared Dudley, Leandro Barbosa and Steve Nash — and then two more from Frye — on five of the Suns’ following six possessions.
Turning Point
The Lakers briefly took the lead at the start of the fourth quarter, but after a layup from Louis Amundson put the Suns back up by two, Frye hit his fourth three-pointer of the game with just over eight minutes to play as the shot clock expired. That was the beginning of a 10-2 Phoenix run that pushed the Suns’ lead into double digits, and L.A. wasn’t able to get any closer than six the rest of the way.
Key Coaching Decision
The Suns were winning this game on the strength of their bench play, and with the team leading 103-94 with roughly three minutes remaining, a timeout was called, presumably to let the starters finish the job. But Gentry let the bench ride it out for another minute or so with Nash and then Stoudemire playing with the second unit against the Lakers’ starters, and they held their ground to seal the victory.
Outside the Box
Common sense would dictate that the Lakers would probably do well not to get into a three-point shooting contest with the Suns, but that’s exactly what they ended up doing, thanks once again to Phoenix going with a zone defense at times. Phil Jackson said after Game 3 that shooting 32 three-pointers isn’t how they want to play basketball, but the Lakers shot 28 in this one, and made only nine.
You Had to Be There
The crowd was on its feet with the game in hand and under a minute remaining, just waiting for anyone to score to put the finishing touches on the win so that they could explode. Grant Hill provided them with what they were looking for when he hit a 15-foot turnaround jumper to push the lead to 110-99, and the noise became deafening as the home fans cheered not only that shot, but the fact that their team had just come back from an 0-2 deficit to tie up the series with the defending world champs.
China-some good places for travel
China has 960 million square kilometers of land area. Most parts of China in the temperate and subtropical, southern part of the region is tropical, while the northern part of the region near the cold.
1. West Lake, Hangzhou City, Zhejiang Province, China.
West Lake, known as a paradise on earth. There are 30 sites worth viewing. Its beauty, it is almost impossible to describe with pen and ink. The best thing to do is to enjoy. Perhaps you might have doubts on this. Next, I will show you some beautiful pictures. I am sure you will be deeply attracted.
2. The National Palace Museum, Tiananmen Square and The great wall in Beijing
Beijing is the capital of China. Almost all of the major events are held here. In ancient times, there are many dynasties build the capital here. After thousands of years history, Beijing is a long history city. You can learn much about Chinese history and culture here.
3. Sanya City, Hainan Province
Sanya is located in tropical. Beach scenery of Sanya is known as “Oriental Hawaii”, which has one of the most beautiful beach on Hainan Island scenery.
4. Wuzhen, Zhejiang Province.
Wuzhen is a 6000 years long history of town.
Well, now I will just introduce you these four places. In the future, I will show you more places.
World food, Seasonal food
How many times you travel every year? Which country you would like to? China, Japanese, American, Canada, England, Thailand or some other places. When you get some places, what’s your first thing to do? Shopping, eating, sightseeing, taking photos…. I like trying different places food. Really, it’s very delicious.
This is one picture for China ‘Bean Sauce Tofu’
This is the picture for Japanese sushi
This is for Salad
This is picture for Pasta:
This is picture for Pizza
New season Ed Hardy
Printing, tattoo, embroidery, washing, ink… It’s the special use for Ed Hardy Brand. Some people said: “Skull, which is a symbol of death, unlucky”. Wo, Mybe, but I still like the designs of Ed. Rebellious, eccentric, I don’t care.
Rock songs, singers, which is your best lovers
I am crazy about Rock music. It’s so passionate, madly… The Beatles, Nirvana, Madonna, Michael Jackson. I know, all of you love him so much and regret for his leave. I like all of his songs. Although I am not good at singing, I am willing to sing his songs when i am alone. Wings Of My Love, You Are There, Dangerous, You Are Not Alone, Heal The World….. I want to say: you are the best one to me!
I love you Juicy Couture
Luxury? Oh, they are so expensive. But I really love you so much!
Juicy Coutuer is a fashion brand of California, American. It’s color so cut, brightly. Handbag, clothes, jewelry. This season it has many new stylers. when you see it, I think maybe you will also like them. Don’t you think? Well, let’s us watch some beautiful pictures.
Emm….You like them. I know, they are a little expensive. However, I have a good news to tell you. I can get them from one place in cheap price, but in high quality. It’s almost the same as the real bags. If you also have interests to them like me, then you can remember this website: http://www.b2b-times.com It won’t let you down!
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