Sticking with China: Local firms -- shrugging off criticism of China's currency, acquisition moves -- press on with plans to expand in world's most populous country Sticking with China: Local firms -- shrugging off criticism of China's currency, acquisition moves -- press on with plans to expand in world's most populous country
Sunday, July 03, 2005
By Jim McKay, Pittsburgh Post-Gazette
While the takeover bids by Chinese companies for Unocal Corp. and Maytag are grabbing headlines and roiling public opinion, Bayer, Alcoa and other companies with ties to Pittsburgh are quietly marching forward with large projects in China.
The other story is of interest too.
Critics say China's currency policy gives it unfair advantage: "Critics say China's currency policy gives it unfair advantage
Sunday, July 03, 2005
By Jim McKay, Pittsburgh Post-Gazette
From Dave Frengel's perspective, there's not a lot of good to say about China these days.
The government affairs director for Penn United Technology, a tool, die and spare parts manufacturer in Cranberry, says he's all for global trade but believes China is being given too much of a free hand.
Let's talk about some miss-information a bit. The Yuan, the casual name for China's currency (RMB is its more formal name), has a rate of exchange that is hooked directly to the U.S.A.'s Dollar. The excange rate for the YUAN and Dollar is always at 8.1. They don't change. That's the policy set up by those in power now in Beijing.
There is nothing unfair about that policy. Zippo. What's unfair is all the crying that it's unfair. The Beijing policy means that the American politicians can't pull a fast-one on the world and deflate the value of the dollar -- or increase its value. The magic of the economic wizards -- or at least the wizards like to think of themselves as such -- is only a wish that can't be obtained nor controlled via DC's power brokers.
There is no 60% tax on US exports to China unless one thinks that there is a 100% tax on US goods to Japan because its dollar exchange is more like 1 to 100 (close enough for this blog) and not 1 to 8.1. It's just math. The US Dollar to Thai currency is 1 to 40 (or so).
That's taxing on small minds. It's called math. But, it isn't a "tax." It's called an exchange rate. Remember the lesson apples to apples and not to oranges.
I don't think it is wise for US Senators to force CHINA to revalue China's currency.
Funny then how the PG paper talks about Greenspan's meeting. The PG news is more than a month old. It is stale. China's policy was pondered. They did a double-clutch. They were going to set up a new export tax in China, but it was pulled a couple of days later and was never put into effect.
The PG must have run an old AP story. It is bad news.
Bristle onward Frengel, you protectionist who knows what is careless and reckless. Yeah right.