Posted on 10/15/2004 1:56:01 PM PDT by Ernest_at_the_Beach
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NEWS
October 15, 2004
Posted to the web October 15, 2004
By Ayanda Shezi
Johannesburg
SA STOOD to benefit from the "bonanza" that China's appetite for raw materials would bring to the world's resource-rich nations in the next two decades, Investec Asset Management strategist Michael Power said yesterday.
"China is offering SA either a shovel or a machete," Power said.
The "shovel" meant that China would be prepared to buy virtually all the resources SA could dig up. The "machete" implied that if SA wanted to compete in the field of manufacturing, it would have to cut its exchange rate to at least R24 a dollar , said Power.
"SA is deluding itself if it believes it can begin to compete with China and its Asian cohorts in the field of manufacturing," Power said.
Power said many middle-ranking nations would be sideswiped by the rise of China, as they were unable to keep up with China's lowcost labour force and the economies of scale that would stem from the concentration of productive capacity in China and east Asia at large.
Currently the wage differential was eight to one in favour of China. A semiskilled worker in China was paid an hourly wage of 60 US cents, in SA $3 and in the US $20,32.
"China's ultracompetitive wage rates mean that virtually every manufacturing industry worldwide will continue heading for China," Power said.
China's population was 1,3-billion, or 20% of humanity. For 25 years its economy had grown at close to a compound rate of 10% a year. "At these rates, even in nominal terms, China will overtake Japan within the next decade to become the world's second-largest economy," Power said.
"In China's eyes the west, and especially the US, must be seen as the answer to its prayers, as it is both the source of its jobs and the destination of much of its output."
Last year China was the largest receiver of foreign direct investment, overtaking the US.
China and the other central banks of Asia have more than 80% of the world's foreign-exchange reserves, including nearly half of the US treasury bills in issue.
In 1990 China's gross domestic product (GDP) was $383bn, and by last year this had risen to $1400bn.
China's steel output has doubled in six years. Last year it accounted for 90% of global output growth.
Power said China was almost certain to reinforce its position over the next decade as the workshop of the world. "However this is not a one-way bet. There will be some spectacular crashes in China."
China and the other central banks of Asia have more than 80% of the world's foreign-exchange reserves, including nearly half of the US treasury bills in issue.
Willie, want do you plan to do about this????
Nuts.
ping
I'm gonna write-in William Hawkins and Alan Tonnelson as MY choice for POTUS and VP this year.
Whatever the question.
(Chuckle) Quite possibly. Interestingly enough, the Chinese are very smart, very hard working, and respect scholarship.
The manufacturing base of the world has gone to China.
How long before the center of science and research does likewise? What happens when U.S. students that want to go to a top-notch university need to go to Beijing - and listen to lectures in Mandarin Chinese?
Our children and grandchildren will curse us for squandering their birthright on cheap consumer goods.
About the only good thing I can say about that is that this is one hell of a disincentive for them to ever attack us.
And one hell of an incentive for us to attack them once NMD is in place.
Please explain.
I agree, it should temper their warmongering.
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