China’s Attempt to Avoid Second Plaza Accord
An article in Asian Wall Street Journal titled "Beijing’s Plaza Accord?" yesterday by Hugo Restall sheds on me a new light on China’s currency revaluation. I was preoccupied with the current happenings, totally forget about China being a fast learner, especially of the Japanese experience. I had never related or seen this currency issue in the light of Plaza Accord signed 20 years ago by the then G5 nations.
The main idea of the editorial: Recognising that American pressure will sooner or later force a yuan appreciation, China would rather embark on a gradual appreciation of its currency now when its economy has a full head of steam, than to force its export sector to endure the kind of "yen shock" that Japanese companies faced after the infamous 1985 Plaza Accord, which when combined with deflationary pressure, loose monetary policy, inflows of foreign speculative capital, soar in asset prices, bad loans, and finally the burst of bubble economy produced the decade-long slump.
China has been drawing lessons extensively from Japan’s past - selectively emulate tried-and-tested policies while avoiding its mistakes. It can be seen from China’s efforts in industrial policies, to befriend Latin America and African countries, acquisition of energy sources, pattern of overseas investments, reliance on borrowed technology, clearing banks’ bad loans etc.
I am keen to learn what the Chinese policy makers have in mind from others’ experiences. Enlighten me please if anyone has any sources.
October 28th, 2006 at 3:24 am
Yap,all of chinese r fast learners. But all of chinese leader have a very typical ambition,—> to own the whole world. How could i say so?
Just hav a brief look at The History of QinShi Huang. N now it’s obvious that China is on the way to reach their ambition,step by step.
But all of chinese also have a similar personality,—> can not co-orporate each other.Some of us said,–> One Chinese can be unbeatable power but if you r facing more than one,maybe they r nothing.
Chinese is the most selfish creature in the world,they only looking for own benefit.
Every chinese only want to beat others,to become the first,become the most powerful,even just among chinese themselves.
Look at the relation between Taiwan and China,don’t they realize that they are “sibling”? Why they should be enemy to each other? Why can’t just sit together to solve their “family affair”? Why Taiwan need America to back up every policy they’ve took for China? So embarassing
Sorry for laussy English.
This is a chinese’ weakness,i know it because i’m also chinese.But anyway,i feel proud of China coz they can be so powerful now. I love China
December 18th, 2006 at 11:13 pm
China has always been an imperialistic entity for more than 3500 years, especially with their culture and economy.
Their culture are just unique, and they will always run the nation with their own culture, no matter what the West want to say about it.
Drastic changes in politics and economy can lead to dissolution of the entire China. Look at what happen with the Soviet Union after such drastic change.
China won’t follow American wills to dominate its economy. Their culture taught that everything has to be done slowly, but certain.