Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

U.S. Designates China as Currency Manipulator

wsj.com

Post reply on HN
Print view View original

271–280 of 356 posts

Re: U.S. Designates China as Currency Manipulator

#271

Post by AstralStorm »

JPKab wrote: post #241
chiefalchemist wrote: post #148

Earlier quoted context omitted.

> "...but only one of them would see its financial system collapse." Unless that is an absolute certainty then and this is a game of high stakes chicken, then I would say the USA has more to lose. While China has certainly developed in the last couple decades they are still relatively used to living with less. On the other hand, Ameicans lose their minds when Facebook goes down for an hour. That is, there would be be…

Really? Seems obvious to me that its the opposite. The US can always find other countries that manufacture things for cheap. China can't find other customers. The domestic demand isn't remotely high enough to propel their mercantilist economy, ironically due to the fact that the currency manipulation of the yuan has suppressed the wealth of Chinese citizens by devaluing their savings. The idea that Americans are too…

China already has other customers and a big and growing internal market. Of course, USA is one of the bigger customers but not the only.

On the other hand, USA cannot import enough copper, aluminium and iron... (It's mined in China and Chinese controlled territories...) And create and staff factories out of thin air.

Re: U.S. Designates China as Currency Manipulator

#272

Post by whoevercares »

seanmcdirmid wrote: post #192
prawn wrote: post #174

Earlier quoted context omitted.

I visited in 1991 for three months as a 14 year old. I don't recall a dual system (unless it was voucher based?), but I remember the friendship department stores and loads of other interesting things - Russian-styled hotels in Xian, Pudong being basically farmland, snakeboats on the Huangpu, etc. It had changed a lot by the time I next visited in late 2003. I don't think they yet had a McDonalds, but there was a thre…

McDonald’s has been in China since the late 90s, there was even a couple of Starbucks when I visited in late 1999! 94 is sort of what I see as the cutoff between old and new China.

What’s funny is Starbucks in China is considered high end coffee shop (it literally cost $8 for an ice latte). So you can even see “influencers” bragging themselves there

Re: U.S. Designates China as Currency Manipulator

#274

Post by oblio »

ptah wrote: post #267

>Treasury uses three criteria to apply the designation: actively intervening in their currency markets, having large trade surpluses with the U.S., and having large overall current-account surpluses. Monday’s action by Treasury is mostly symbolic, requiring the U.S. administration to consult with the International Monetary Fund to try to eliminate the unfair advantage the currency measures have given a country. Does…

Is there a country of comparable heft that is allowed? Do you remember when Japan was rising? There was definitely a lot of anxiety on the American side.

Re: U.S. Designates China as Currency Manipulator

#275

Post by thaumasiotes »

whoevercares wrote: post #272
seanmcdirmid wrote: post #192

Earlier quoted context omitted.

McDonald’s has been in China since the late 90s, there was even a couple of Starbucks when I visited in late 1999! 94 is sort of what I see as the cutoff between old and new China.

What’s funny is Starbucks in China is considered high end coffee shop (it literally cost $8 for an ice latte). So you can even see “influencers” bragging themselves there

If you think that's funny, you should see the Pizza Huts.

Re: U.S. Designates China as Currency Manipulator

#276

Post by makomk »

jchb wrote: post #179
Phil_Latio wrote: post #97

Earlier quoted context omitted.

> Okay, no, Germany can't manipulate its currency as they don't have their own, they use the Euro. But they use the Euro as an umbrella that doesn't behave like a single currency for Germany would. While implementing the Euro they put massive pressure on wages while other EU countries kept increasing wages. Germany is violating export-surplus rules of the EU, but no one seems to care. https://upload.wikimedia.org/wik…

Actually the German surplus has been brought up for discussion many times in the EU parliament. A trade surplus of over 6% triggers a so called IDR, one EU acronym among many, which means (Macroeconomic) In-Depth Review. If the review shows an excessive balance, that triggers the EIP. Excessive Imbalance Procedure!. If a country fails to follow the recommendations coming out of the EIP, that can in theory lead to san…

Given the amount of control Germany has over who becomes part of the European Commission, I think it's unlikely Germany would ever be sanctioned for this. The European Parliament have no say here so it doesn't particularly matter what they think.

Re: U.S. Designates China as Currency Manipulator

#277

Post by epiphanitus »

rossdavidh wrote: post #67

So, really, is there any doubt that this is true? China's currency exchange rate has been abnormally stable for a long time, and the Obama, Bush, Clinton, Bush, and Reagan administrations all knew it was the result of currency manipuliation. They just found it politically unpalatable to admit it out loud. The real question would be, why is the U.S. finally admitting this out loud? 1) amping up a trade war 2) decoupli…

1) and 3) to a lesser extent.

China's currency has been pegged to the USD for some time now. This is actually a common arrangement. A currency peg is basically a commitment by a government to keep its exchange rate with another country at a certain value, mostly to aid exports. It does this by buying and selling currencies, usually leveraging very large reserves.

There are several reasons why the past few Admin. have tolerated the currency peg. A cheaper Yuan means that US consumers get better prices. Also, China buys a lot of Treasuries as part of their sovereign wealth fund. It's still a bitter pill to swallow if you're a US manufacturer or exporter, though. The currency peg also puts downward pressure on real wages for Chinese workers, since it devalues the currency in which they get paid.

What happened in the past few days was that the Chinese central bank decided to push the value of the currency down even further, prompting a symbolic US response.

Re: U.S. Designates China as Currency Manipulator

#278

Post by makomk »

simonh wrote: post #82
aianus wrote: post #61

Earlier quoted context omitted.

There are plenty of good reasons why China deserves tariffs, why not start there as the root cause? Protectionism, IP theft, banning or heavily restricting US tech firms from operating in (aka exporting to) China, the list goes on.

And if that was the real reason, you’d expect the US to be coordinating with other countries that have the same beef with China. Instead, the US is antagonising them as well. Trump has been very clear the tariffs are mainly about boosting US manufacturing. It’s not going to work, but that’s what he keeps saying. If it really was about the issues you list, there are plenty of ways to address them in a much more coordi…

The main countries that the US would want to coordinate this with are the EU ones, and that's pretty much a hopeless cause. EU rules mean that any action has to be taken by the EU as a whole and they just can't agree on this because the different countries' interests diverge too much.

Re: U.S. Designates China as Currency Manipulator

#279

Post by simula67 »

China burned through almost $1 trillion in US treasuries defending the peg when the Yuan depreciated last time[1]. They were "manipulating" the currency to make it stronger.

This time they did nothing, and they are being accused of being a currency manipulator. It is insane.

[1] https://www.scmp.com/business/banking-finance/article/207131...

Re: U.S. Designates China as Currency Manipulator

#280

Post by wocram »

markvdb wrote: post #107

3% stock market movements set in motion by the US president alone. "Great" insider trading potential. Have someone set up the right derivatives strategy and bam: instant millions. I couldn't convince myself to immediately write that idea off as utter nonsense. Anyone with more relevant financial experience? Can you reassure me this would be difficult to pull off? Or would you have to confirm this would be difficult t…

If you know the market is going to move in either direction, you can get at least 20x leverage to SPX using futures.

You could get substantially more leverage using options, but that is more sensitive to knowing how large and fast the reaction will be.

Post reply on HN