All posts by TGS - 96. page

Huanqiu published an article titled “If the Chinese RMB Were to Appreciate Significantly, the United States Would Be Reduced to a Second Class Country.” The author, Tang Chunfeng, is a research fellow at the Chinese Academy of International Trade and Economic Cooperation under China’s Ministry of Commerce. Tang stated that the following would happen if the RMB exchange rate with the U.S. dollar were 1:1. China’s GDP would be close to three times that of the U.S. thus making it the No. 1 power in the world. The Chinese RMB would become the major currency for international trade settlement and for foreign exchange reserves. As the currency of the largest debt holder, the supply of RMB would be greater than domestic demand and China would become the “central bank” of the world. The value of overseas assets that Chinese owned would surpass that of Japan. China would finance its overseas investments with a zero interest rate. Today’s employees working for foreign bosses would be business owners bossing around their foreign employees. As the United States lost its economic power, humiliation and blows would ensue. Its Empire State Building and key industries might have to be sold. Even the Capitol and the White House might possibly be used to obtain mortgages to pay for its debts.

Source: Huanqiu, October 3, 2011
http://finance.huanqiu.com/roll/2011-10/2080072.html

The State media Guangming Daily published an article on its website urging the U.S. to focus on its own interests, rather than on ideology, when dealing with China. It observed that the U.S. would like to see other economies in a strong recovery so as to lead the world economy out of recession. “China is exactly such an economy, and is probably the only economy that can do the job.” It warned that the U.S. is playing with a boomerang with the Chinese currency exchange issue and could end up harming its own economy if it is not careful. “The Sino-US relationship is not based on ideology but respective self-interest. … The normal approach to expanding the bilateral relationship is not to allow ideology to hinder our views, but to play the game based on the different interests of each party.”

Source: Guangming, October 3, 2011
http://view.gmw.cn/2011-10/03/content_2733020.htm

Guo Xiangang, the Deputy Director of China’s Institute of International Studies, commented on the bill on China’s currency that is before the U.S. Senate, the Currency Exchange Rate Oversight Reform Act of 2011. He observed that, in addition to political motivation because of the upcoming election year, the move occurred because the U.S. has its own problems. In particular, in recent years, China has surpassed Japan and become the No. 2 economy in the world. “The United States of course is No. 1. From the U.S. perspective, it has a sense of crisis, worrying that China will surpass the U.S. and become No. 1 in a few years. Therefore, it has been trying various approaches. One is to find fault with and attack China. A second is to reduce China’s growth rate, or even to contain China, believing that will slow down China’s growth.

Source: China National Radio, October 3, 2011
http://china.cnr.cn/qqhygbw/201110/t20111003_508576092_1.shtml

Study Times published an article stating that the recent U.S. arms sale to Taiwan was motivated by four factors. The first one is the core strategic interest of the U.S. to contain China by leveraging Taiwan. The U.S. conservatives consistently view China as its major strategic competitor, not a partner. The second factor is the significant U.S. economic interest in the arms sale. This new agreement to sell arms brings the entire amount of arms sales during the Obama administration to US$12.252 billion, topping previous administrations since the severance of the U.S. – Taiwan diplomatic relationship. The third factor is the domestic politics associated with the upcoming election. The economy and jobs are the most important issues in the election. The arms sale will allegedly result in over 80,000 jobs in the U.S. The fourth factor is the interplay of the domestic political forces in Taiwan.

Source: Study Times, October 3, 2011
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2011/10/03/02/02_38.htm

Huanqiu published an editorial advocating that China should take substantive actions to retaliate against the U.S. for its arms sale to Taiwan. “This would involve some risk. The worst result would be that the U.S. brings in China’s neighboring countries and reacts. The best result would be China taking action on one issue but having an overall impact throughout.” According to Huanqiu, the U.S. arms sale is the right issue. “China can retaliate in many ways. China can announce that it suspends all military exchanges with the U.S. In addition, China can announce that it launches investigations into the U.S. companies that participate in the arms sale and can sanction those companies. China can also reduce imports from the U.S. so that the number of the jobs lost would offset the number of the jobs gained in the arms sale. … What we need to do is to share the pain with the U.S, instead of China bearing the pain by itself. Let us believe: we can do it.”

Source: Huanqiu, September 24, 2011
http://opinion.huanqiu.com/roll/2011-09/2032110.html