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U.S. Designates China as Currency Manipulator

wsj.com

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Re: U.S. Designates China as Currency Manipulator

#311

Post by joshuaissac »

vadym909 wrote: post #240
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…

The US can import stuff from any number of other countries at higher prices. Who is China going to send its manufactured goods to?

The US accounts for just under the 19% of Chinese exports. That is not trivial, but the domestic (and non-US international) market is growing fast enough that it can absorb that hit faster than it would take other countries to develop capacity to make those goods at the standard that American buyers demand.

Sure, it would mean lost economical potential for China, but by no means would it leave China with no place to send its manufactured goods.

Re: U.S. Designates China as Currency Manipulator

#312

Post by Symmetry »

qwerty456127 wrote: post #136

Isn't being able to manipulate their currencies exactly the reason countries maintain currencies of their own? Don't other countries like Japan and the USA manipulate their currencies routinely?

Generally by "currency manipulation" people don't mean manipulation of the value of the currency in general but manipulation of its value with respect to foreign currencies in particular. So if the US just prints money to combat deflation that isn't currency manipulation but if it used all the money it printed to buy Yuan that would be. But really the whole public discourse around the topic is pretty confused. In the long run trade balances are governed by savings rates and its hard to keep things out of equilibrium in the long run.

Re: U.S. Designates China as Currency Manipulator

#313

Post by Symmetry »

BowBun wrote: post #183
NicoJuicy wrote: post #169

China has started invading Europe through Tsjechie also. Just read a disturbing dutch article and Europe should join the US. I wasn't sure before, but I'm sure now. Here's a small report of the EU : https://www.europarl.europa.eu/thinktank/en/document.html?re... Yeah, it's disturbing and it doesn't even contain all the info...

Seems like FUD without a credible source, can you link something? Plenty of dutch readers on HN. The article linked is referencing the unfavorable economic terms of China's Silk Road project towards developing nations' economies, which has been written about and is plenty concerning on its own.

Honestly the whole belt and road thing has mostly just been a boondoggle for China.

Re: U.S. Designates China as Currency Manipulator

#314

Post by jefflombardjr »

codingslave wrote: post #113
tunesmith wrote: post #108

Earlier quoted context omitted.

From that perspective, what is arguably good about this trade war continuing?

Its a battle for who is the world economic power in 20 or 30 years. The american public doesn't understand what is at stake here. Unfortunately the media is calling Trump a buffoon, when the trade war, and possible subsequent economic hit to the USA, is vital to our long term economic future.

If it is indeed a battle, like you say, infrastructure investment in wind + solar, reliable public transportation, a public health system, and free public education would do us 100x more than playing silly games with China.

Re: U.S. Designates China as Currency Manipulator

#315

Post by AstralStorm »

mobilefriendly wrote: post #309
AstralStorm wrote: post #268

Earlier quoted context omitted.

That is presuming private ownership effects won't be big. And they will be. China owns more corporate debt in the US than anywhere else and it is a high percentage.

Not necessarily. If the Chinese yuan is devaluing, Chinese investors want very much to hold US dollar denominated debt.

Yes, and so they would want to hold the federal debt. And also find ways to increase it. The GP post relates to China selling the debt to disentangle from USD.

Re: U.S. Designates China as Currency Manipulator

#316

Post by AstralStorm »

mymythisisthis wrote: post #282
AstralStorm wrote: post #271

Earlier quoted context omitted.

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.

I'm sure those minerals are mined elsewhere.

In copper, top 3 are: Chile, (one fifth) China, Peru (similar to China).

In iron: Australia, Brazil (half of former), China (similar to Brazil).

In aluminium: China, Russia (similar to China), Canada (tenth of former).

So except for aluminium, this would be very problematic but not insurmountable. I bet Russians won't sell their aluminium to US without many strings attached.

Re: U.S. Designates China as Currency Manipulator

#317

Post by formercoder »

AstralStorm wrote: post #268
nradov wrote: post #262

Earlier quoted context omitted.

China holds only 5% of US federal government debt, down from a peak of 11%. If they stop buying it won't cause interest rates to skyrocket. The impact would be a few basis points at most.

That is presuming private ownership effects won't be big. And they will be. China owns more corporate debt in the US than anywhere else and it is a high percentage.

Luckily there is massive domestic demand for US corporate debt.

Re: U.S. Designates China as Currency Manipulator

#318

Post by ideasRgood »

xster wrote: post #131

The entire premise of the post-Bretton Woods neoliberal world US currency is based on an agreement with the Saudis to sell oil in US dollars for military support and on threats to bomb countries who sell oil in non-US denominations. And China is the currency manipulator.

And this is why we have Bitcoin.

Or if you don't like that, pick a different non government asset.

Re: U.S. Designates China as Currency Manipulator

#319

Post by coupdejarnac »

thaumasiotes wrote: post #275
whoevercares wrote: post #272

Earlier quoted context omitted.

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.

Is Pizza Hut still considered fine dining these days?

Re: U.S. Designates China as Currency Manipulator

#320

Post by wtdata »

mieseratte wrote: post #297
epiphanitus wrote: post #277

Earlier quoted context omitted.

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…

> prompting a symbolic US response. What makes it symbolic?

Well, so far the US only designated China as a currency manipulator. No actual action followed about that designation.

My take is that is just a way to pressure China to accept other measures (like increased tariffs) for now.

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