9/18    http://www.economist.com/displaystory.cfm?story_id=2050678
        The world economy is screwed.  Frightening.
        Perhaps it's time for the Greater China (PRC, ROC, HK, SG)
        region to allow its currency to appreciate slightly, and to
        spend its trade surplus on developing its own countries and
        people, but the region is not big or powerful enough to solve
        the world's problem by itself.  Also, US probably
        shouldn't have gone to Iraq, but saved the money, which
        would've helped a little too.  And Japan and Germany need
        to get their act together.  Otherwise it's Great Depression 2.
        \_ Its all the white imperialist protorapist fault!!!
           \_ Huh?  I am suggesting ways that would help lessen the
              burden on the US.  Blame goes all around.  Did you
              bother to read the article?
        \_ Err... read the article please.  The Economist consistantly
           point out that China's economy, despite media hype, is not
           that big of an economy (in the article about 1 month back,
           it said that China's economy is about the size of Italy,
           or 3% of Global GDP).  Further, China is not competing with
           USA in all front.  Those manufacture jobs will moved to
           somehwere else, Mexico, Indonesia, or some odd ex-Soviet
           block nation if it's not moved in China.   China is not
           running a high trade surplus in general (it has huge trade
           plus with USA, but trade deficit with virtually all its
           neighboring country, so in effect, China is the tiny
           lawn-mower engine of Asia... compare with USA being the
           jet engine of the world).
           Lastly, what would you think GM, Coke Cola, Motorolla think
           about rising RMB while big chunk of THEIR plant is in
           China?  These US firms are the benefisories of cheap Chinese
           currency.
           \_ I don't disagree with you.  A few points though.
              Motorola, Coca-Cola, GM probably would not mind a slight
              controlled increase in the value of the Renminbi.
              They don't just have factories in China, an important
              and growing part of their market is very much there too.
              A pure export driven model like that of TW, SG, SK is not
              feasible for PRC because of its size.  It needs to be
              driven by internal demand.  Buying US dollars and debt
              forever is a no win game.  While US uses the money
              to invest and improve productivity (and spend on good
              life), China's local companies remain short of credit.
              And once US dollar devalues, you essentially threw
              away a big chunk of your dollars.  Instead, the money
              could be better invested in PRC, and help it innovate
              and move up the chain.  As for China's trade deficit
              ex-USA, a big part of it is raw materials and
              commodities from SE Asia, Australia, etc. needed for
              China's manufactures.  The trade deficit vis-a-vis Japan
              is more worrisome perhaps due to Japan's protectionism?
              As for manufacturing jobs moving to other countries,
              I am not too worried because I think China has a
              significant and growing margin (cost + productivity)
              versus those countries.  No one wants a sudden drastic
              increase in the value of the Yuan, but a slight,
              controlled increase may be a good idea.  This Econmist
              article pretty much sums it up:
              http://www.economist.com/displayStory.cfm?Story_id=2050783
        \_ Just a note. The Economist also uses every opportunity to point out
           that Russia's GDP is "slightly larger than Belgium's". Whoever at
           Economist who's making those ridiculous GDP comparisons between
           different countries, obviously hasn't gasped the concept of the
           purchasing power parity adjusted GDP.  They just compare the nominal
                      \- you know the e'ist is the magazine that invented
                         the BigMac index, right?
                         \_ An excellent point, but I should point out that
                            the Economist was merely the first publication
                            to popularize the BigMac Index.  It's been a
                            standard conversation topic among expats and
                            backpackers for much longer than it's been a
                            stay of the Economist.
                            \- topic of conversation != having a model and
                               computing it and correlating to FX futures,
                               comparing to PPP, UIP, RIP etc.
           GDPs as measured using US dollars using some exchange rate which is
           not saying much. In USA, dollar has a very low purchasing parity
           power compared to all poor counties and possibly most rich
           countries. Therefore, the non-purchasing power parity adjusted GDP
           does not convey much information about the size of economy. If you
           look at the PP adjusted GDP, then China is suddenly world's second
           largest economy. Of course, GDP still doesn't say much about how
           well off people are in a country. You'll have to look at the
           per capita GDP figures, and even then the per capita GDP can be a
           very rough measure depending on how equally on unequally the income
           is distributed.
           \_ And when you revalue the Yuan, PRC's GDP would go up immediately.