Posted on 02/15/2005 9:35:35 PM PST by maui_hawaii
A trade conference in Washington Tuesday focused on the U.S. China trade relationship, in which China has a huge and growing surplus.
Experts say traditional bipartisan support in Congress of free trade is being eroded by China's unwillingness to take measures to redress the trade imbalance. "Our trade agenda is going to be a captive of discontent with our trade relationship with China, Including their currency manipulation, their failure to honor intellectual property rights, their discriminatory tax and subsidy structures," said Phil English, a key congressional Republican on trade policy in the House of Representatives.
Mr. English says members of Congress are increasingly frustrated by what they see as a continuing loss of manufacturing and now service jobs to China. His counterpart among Democrats, Sandy Levin, accuses the Bush administration of failing to enforce U.S. trade law in dealing with China. "So, essentially we've had a once over lightly approach by this administration. Secretaries go over and come back. They say they've said this or that, usually privately. And nothing really happens," he noted.
Much of the discontent relates to China's refusal to adjust its fixed rate currency link to the dollar that has been unchanged for 10 years. "I think China will be a target and should be a target as far as the exchange rate is concerned because this policy really is contributing to trade disequilibrium," said Mac Destler, an economist at the University of Maryland, who is among the many experts who believe the currency peg keeps the yuan undervalued and gives an advantage to Chinese products in the U.S market.
But banker Robert Rubin, treasury secretary from 1995 to 1999, said if China's revalues the yuan the country may cut back on its purchases of U.S. government bonds. That, he said, could send the dollar even lower and interest rates higher.
China is, after Japan, the biggest purchaser of US bonds and currently holds treasury securities worth $194 billion. Mr. Rubin called on the Bush administration to reduce the U.S. fiscal deficit. And concerning the yuan, cautioned the administration to be careful what it wishes for.
It is about time -- China's value of thier currency and the U.S.'s constant desire to bend over and grab its ankles is DESTROYING OUR TRADE situation. The US had better start demanding parity in trade. (about ten years ago actually)
Now that we are deeply in debt to the Chicoms the only painful answer is to take away MFN status from them and hit them with the same tarriffs they sock us with. A lot of us saw it coming when we gave it to them, but no one would listen.
Somehow, "I told you so" doesn't quite say it.
Well the Chinese just ordered 60 Boeing 787s. That should help the balance of payments some.
Thank you for mentioning the IP disaster with China! They have no regard for copyrights or patents whatsoever. Free trade is one of those things that looks reasonable in theory, but these inconvenient little facts keep getting in the way. Until the time come when China a) observes the treaties it has signed; b) stops using slave labor; and c) conducts business affairs in a reasonably open and honest manner, there should be stiff tariffs on all imports from China. MFN should be repealed. It'll never happen, though, because there are way too many crony capitalists in this country who want it this way.
This shows an approximate outstanding marketable securities at 3.97 trillion currently outstanding as of Jan. 31.
Keep in mind this is only a portion of our federal debt.
Grand total including non marketables we owe 7.627 trillion.
If China owns $194 billion, odds are its being held in marketables. That means they hold approximately 4.8% of that segment of [marketable] securities.
Of the grand total they hold 2.5% of our debt.
This offers a brief explaination.
If they decided to dump those securities (the marketables) then they would have to sell them on the open market...
Some people think that the world will end if China doesn't buy our debt. I don't believe it one bit. Most people are not buying this form of debt, not because there are not buyers, but because the yeilds are not enough.
In a worst case scenario if China doesn't buy ANY the yeild rises for the rest of us...
1) THE BASICS
1.1) What are Treasury bills, notes, bonds, and TIPS? Treasury bills, notes, bonds, and TIPS are marketable securities the U.S. government sells in order to pay off maturing debt and raise the cash needed to run the federal government. When you buy one of these securities, you are lending your money to the U.S. government.
1.2) What distinguishes bills, notes, bonds, and TIPS from one another?
Treasury bills are short-term obligations issued with a term of one year or less. Treasury bills are sold at a discount from face value and don't pay interest before maturity. The interest is the difference between the purchase price of the bill and the amount that is paid to you either at maturity (this amount is the face value) or when you sell the bill prior to maturity.
Treasury notes and bonds bear a stated interest rate, and the owner receives semi-annual interest payments. Treasury notes have a term of more than one year, but not more than 10 years. Treasury bonds are long-term obligations with a term of more than 10 years.
TIPS, or Treasury Inflation-Protected Securities, are securities whose principal is tied to the inflation rate. They bear a stated interest rate, and the owner receives semi-annual interest payments. We issue TIPS in terms of 5, 10, and 20 years.
All of the above mentioned debt is issued at auction. If the note says $10,000 on the face of it you are trying to bid it down... you may pick one up at say $9,800...that applies to the initial offering as well as secondary transactions.
After they are purchased you can sell marketables in the secondary market. This is irrelevant to how much money the government actually gets. The government only 'borrows' from the intial purchase and will pay whoever the holder happens to be.
2.6) What is meant by "competitive bidding" and "noncompetitive bidding?" These are the two types of bidding for a Treasury security. When you bid for a Treasury bill, note, or TIPS, you must choose whether to bid competitively or noncompetitively. If you place a noncompetitive bid, we guarantee you will receive the security you desire. What's the catch? It's not a catch, really, but by bidding noncompetitively you agree to accept whatever rate or yield is determined at the auction. Investors who don't consider themselves expert securities traders usually bid noncompetitively. A competitive bid is one where you specify the rate or yield you will accept. We may reject a competitive bid, grant it in less than the amount you requested, or grant it in the full amount you requested.
Share your wisdom please?
How easy would it be for China to convert those into long range patrol craft? If I am not mistaken Boeing already has plans to do that for the US Military using some verion of a 7?7.
You got any numbers, and over what time frame?
I think that was 60 over 10 years...I don't know.
They would have to buy something like 200 of them per year to level things out...
Its more complicated than that though...
The planes have a list price of $120 million each, making the China sale worth $7.2 billion, but such orders typically come with heavy discounts.
.....
In 2004, the United States' trade deficit reached a whopping $617 billion a year, of which China compiled the largest surplus at $162 billion.
At that rate they would have to buy 1,350 jets in order to make up the difference. In one year.
too few think about America and its future.......
The CIA has reported in a public document that China's economy will exceed that of America's within 30 years.
The percentage of federal revenues obtained from individuals has skyrocketed, while the percentage obtained from imports has fallen drastically.
For the first time in over 50 years, America now imports more food than we export.
Yet the "free traders" and party whores will continue to insist that all is well.
The truth is that America (as we know it) is finished. 30 years from now, China will have her way with us, as if America was a drug-addicted prostitute, and we won't be able to do a damn thing about it.
But at least our corporate and political leaders will still be getting their bonuses. And the stock market will still be around, so fools can keep throwing money into it. And Bread & Circuses will still be available for the sheeple. Who knows, maybe they'll still be playing reruns of Seinfeld in 30 years?
I really don't see a way out of it, unless there is a rebirth of a culture of freedom and basic morality in this country; concurrent with an economic policy that raises tariffs and lowers internal taxes.
The likelihood of such happening is about the same as me winning the lottery twice tomorrow, without buying any tickets.
It's just not the rich.
Look at how many Americans will buy something made in China just to save 50 cents, or will continue pouring money into these big corporations via 401ks, while those same corporations are busy outsourcing their neighbors job.
There are a number of holes in your post.
Most Americans are obsessed with obtaining wealth (or even the appearance thereof), without having a clue what true wealth is.
It doesn't matter. Military dominance will follow economic dominance.
Your own government says China's economy will be bigger than ours in 30 years. (Personally, I think it will happen quicker than that).
So eventually, China's military will be more powerful than the American military.
post for reference
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