Posted on 04/28/2005 12:13:33 PM PDT by TigerLikesRooster
http://asia.news.yahoo.com/050422/3/1ztbu.html
BEIJING, April 22 (Reuters) - China's capital account surplus in 2004 more than doubled over the previous year to nearly $110.7 billion, the government said on Friday, in another indication of speculative "hot money" entering the country.
The surplus was partly due to the $61 billion in foreign investment that China drew in 2004, along with another $19.7 billion in net securities investment, the State Administration of Foreign Exchange said on its Web site (http://www.safe.gov.cn).
The administration did not mention hot money, a term for capital that has entered China as speculators hope to profit from an anticipated revaluation of the yuan currency.
But it said the "errors and omissions" category showed a balance of $27 billion. That was up about 50 percent from the year before.
Analysts say the "errors and omissions" item points to flows of speculative money.
Such funds have complicated the government's attempts to control the money supply, and have irritated officials who say they are determined not to let speculators benefit from any change in the currency.
The yuan is pegged near 8.28 to the dollar, but critics such as the United States have urged China to make the currency more flexible, saying that level is too low.
The capital inflows had been reflected in foreign exchange reserve data for 2004 that showed the country added more than $200 billion to reserves.
After hitting $610 billion at the end of the year, reserves climbed further in the first quarter to $659 billion.
The forex administration also said China's current account surplus rose 50 percent to $68.7 billion in 2004 thanks in part to strong exports, which grew more than 30 percent last year.
That rise in the current accout surplus was all the more impressive since the surplus had narrowed in the first half of last year to $7.5 billion, meaning that the surplus in the second half was more than $60 billion.
Ping!
Per plan - seizing the means of production .... and the capital, and the intellectual property as well ... now all that's left, is seizing land (and women).
Well, at least they have plenty of money to buy our debt. It does seem like they are also using a lot of it buy friends and win influence around the world.
The Kiplinger newsletter is usually very accurate in their forecast. They said we have not yet seen the amount of companies that will be heading to china as we will in the coming years. Lots of companies were holding off to see what their competition was going to do. Now that the competition has done so they will be forced to so do.
Wait until china starts manufacturing cars to export to the US via chery car co. and Chysler who is making plans to do so.
It occurs to me that we can't compete with China's cheap labor, so for strategic reasons we should encourage other developing nations to increase their ability to produce the stuff China sells us. Spread it around to deny some capital to China, and make us less dependent.
IMHO, only a fool would put their money in Communist China.
What investors don't consider (or refuse to think about) is that if there were a sudden regime change for the WORSE in Beijing (for example, if the PLA were to determine that the leadership of the Communist Party was seeking to liberalize Chinese society or even worse: limit or curtail the power of the army, they would not hesitate to seize power and you can bet that in order to consolidate their position, a state of martial law and emergency would be declared, ALL financial assets would be frozen and/or seize, and *oops* - there goes all that foreign capital that was poured into China by investors, speculators and their friends.
There are two issues facing Beijing which could lead to such unreset, the first (and least likely to cause an unexpected regime change in Beijing) is Menta Lee ILL next door in North Korea, the second is the issue of Taiwan.
The Far East is far from stable, and money poured into that region may (or may not) ever return to the investors who go chasing after profits in such a fashion.
Just my .02, your mileage may vary.
Yep, money is pouring into mercantilist China and flowing out of free-trade America. Go figure.
but that will jumpstart a chinese middle class who will want american goods versus their own.
You know the chinese,unlike americans who only care about their country first and other countries economy second, the chinese only care about the bottom dollar and want the cheapest goods.
Starting in 2006 from the last I heard.
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