This is yet another amazing example of Chinese protectionism, or way beyond protectionism, gosh darn brazen unfair trade practices.
The Hill is reporting Tech groups are trying to get something done on China requiring patents be developed and registered locally for all government purchases. This isn't the product, this is the advanced R&D behind the product!
Wondering now why so much U.S. advanced R&D has moved to China?
China has imposed new procurement rules there require government agencies to purchase equipment only from businesses that develop and register their intellectual property patents locally.
The TIC reports has some damning news on Foreigners dumping U.S. Treasuries, especially China.
Firstly, what is the TIC? TIC stands for Treasury International Capital Data and it is a monthly report on who has bought and sold all stocks and bonds coming in and out of the country.
The Treasury International Capital (TIC) reporting system collects data for the United States on cross-border portfolio investment flows and positions between U.S. residents (including U.S.-based branches of firms headquartered in other countries) and foreign residents (including offshore branches of U.S. firms)
Goldman Sachs is predicting China will raise by 5% it's currency. I think we've seen these reports before, but because China's currency manipulation is such a major factor in the U.S. trade deficit, this is worth a read.
Goldman Sachs Group Inc. Chief Economist Jim O’Neill said China may be poised to let its currency strengthen as much as 5 percent to slow the world’s fastest growing major economy.
“I have a strong opinion that they’re close to moving the exchange rate,” O’Neill said in a telephone interview from London after China’s central bank told lenders on Feb. 12 to set aside larger reserves. “Something’s brewing. It could happen anytime.”
It seems the MSM is finally catching on and reporting that Stimulus is actually stimulating other countries economies, including China. ABC News is reporting $2.1 billion of renewable energy stimulus funds have gone offshore.
While one might think this is better news for U.S. workers, in terms of global labor arbitrage, it's probably only good news for the Chinese. A Chinese province raises minimum wage 13% to a whopping $140 USD a month!
A decision by the province that is China’s second-biggest exporter to raise minimum wage rates has heightened expectations that other provinces and cities will soon follow, just as the central government’s attention is shifting from economic stimulus to rising inflation.
Eastern Jiangsu province, which exports more than Brazil and South Africa combined, raised its monthly minimum wage rate 13 per cent to Rmb960 ($140) last week. It was the first time the rate had been adjusted in two years.
The administration has told Chinese officials that currency policy will be high on its agenda this year for economic talks with China, a senior official said on Wednesday. The White House is also weighing whether to designate China as a country that manipulates its currency, when the Treasury Department issues its semiannual report on foreign currencies in April.
President Obama signaled the tougher line on Wednesday, telling Democratic senators that the United States needed “to make sure our goods are not artificially inflated in price and their goods are not artificially deflated in price; that puts us at a huge competitive disadvantage.”
The Chinese government may allow the yuan to have “a bigger one-off move than people talk about, at least 5 percent, maybe more,” O’Neill said in an interview today at the London School of Economics. “They may also consider having a wide band to let it move more frequently on the daily basis to stop speculative players.”
China’s economy rebounded stronger than anticipated in the fourth quarter, and the inflation rate accelerated to a 13-month high of 1.9 percent in December, igniting speculation the government will abandon the yuan peg to avoid the economy from overheating. China has kept a lid on its currency since July 2008 after it strengthened 21 percent against the dollar over the previous three years.
The Chinese authorities signaled Wednesday that bank lending would slow significantly this year and reportedly instructed some banks to curb loans — the latest in a series of moves designed to forestall inflation and stave off bubbles in the stock and property markets.
Liu Mingkang, chairman of the China Banking Regulatory Commission, said he expected Chinese banks to extend loans totaling about 7.5 trillion renminbi, or $1.1 trillion — down nearly 22 percent from the record 9.6 trillion renminbi lent last year.
China reports GDP Thursday and expect another blow out, estimates expect 10.8%.
China’s exports surged in December and imports rose to a record in a stronger-than-forecast trade rebound that may lessen the case for governments to sustain stimulus programs this year.
Exports climbed 17.7 percent from a year earlier, the first increase in 14 months, and imports jumped 55.9 percent, the customs bureau said on its Web site yesterday. Year-on-year comparisons are affected by declines from late 2008 as the global credit crisis deepened.
But what is hilarious is the assumption China would somehow re-evaluate their currency due to these figures.
Digging deeper, we see that China has increased imports 55.9%. Raw commodities are the thing that stands out on imports:
if we think of the United States as bearing a proportionate share, and also use the rule of thumb that one point of GDP = 1 million jobs, we’re looking at 1.4 million U.S. jobs lost due to Chinese mercantilism.
Bear in mind this is not a formal result, simply a very rough estimate put forth on his blog for discussion, not a formal research paper.
A couple of IMF researchers estimated China accounts for 0.9% of GWP (gross world product).
Since China's GDP is heavily export driven, Krugman asserts one can look at this as a negative impact on world exports., which in turn, negatively impacts purchases of goods and services from U.S. providers and this is a multiplier effect.
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