Posted on 06/12/2020 2:57:44 PM PDT by SeekAndFind
Maybe they shouldn’t have tried to take down the rest of the world.
True, but we aren't going to do that.
What American consumers are going to do is buy more Chinese goods because they'll be even cheaper.
The Chinese economy at its core depends on the export of consumer goods made at a competitive advantage due to its huge relatively inexpensive but efficient labor force. The world demand for those goods is shrinking due to economic contraction especially in Europe and the United States. China has a narrow margin between basic needs and miserable poverty. How do you feed , house, clothe etc millions of Chinese who are suddenly non productive? China’s political and social structure is under strain in a way not previously seen.
Then make them more expensive. Slap a 250 percent tariff on them. Make them prohibitive, while at the same time working to crash the yuan.
I disagree, because a depressed currency makes Chinese exports cheaper and even more competitive.
I give up
what is the current exchange rate?
thanks
There is no such thing as a net exporter, or importer far that matter, if you look at the total exchange of goods and money. When China sells to us they get dollars. They can only use dollars to buy stuff with dollars. And they do that by buying US goods and or US assets. They have used much of the surplus dollars to buy US Treasuries.
The books always balance. A weak currency makes imports expensive and absent competition from imports, domestic goods get more expensive. So China will not be able to afford the pacify the masses with jobs or cheap goods.
If your competitor sells goods below costs you should hope the sell a lot because bankruptcy Isnt far behind.
Your argument is based on a free traitor mindset.
It may seem counter-intuitive, but a strong currency is not necessarily in a nation’s best interests. A weak domestic currency renders a nation’s exports more competitive in global markets, and simultaneously makes imports more expensive. Higher export volumes spur economic growth, while pricey imports also have a similar effect because consumers opt for local alternatives to imported products. This improvement in the terms of trade generally translates into a lower current account deficit (or a greater current account surplus), higher employment, and faster GDP growth. The stimulative monetary policies that usually result in a weak currency also have a positive impact on the nation’s capital and housing markets, which in turn boosts domestic consumption through the wealth effect.
Sounds like a simple plan but not realistic. Since China dominated the market in manufacturing every widget imaginable a significant amount of western production either evaporated or shifted to something else.
The lead time and costs to get a western world production line up and running would drive a lot of manufacturers out of biz.
If anyone here is a PC builder or hobbyist you know quite well what has happened to parts and components this year. Power supplies especially are either in shortage or jacked up in price. Pre-built PCs are running on 4-6 week production delays and this time of year its going to lead to problematic inventory clearance of previous generation CPUs (Intel 10th gen just came out. AMD coming soon.) and graphics cards (3000 series NVidia cards and AMD Big Navi incoming.). If youre sitting on a bigger supply of one or the other, youre going to be discounting big.
Bicycles are 95% sourced from China and Taiwan and my LBS is down to dozens of bikes instead of hundreds or a thousand plus spread out over 5 stores. Their repair business in insane as people cant buy new inventory in their sized. Manufacturers sites are showing sold out/unavailable.
Add those two categories where were SOL when it comes to being dependent on China.
We haven't even started - because credible replacements in many product categories simply do not exist.
And we have to put an end to that.
But it raises the costs of imports especially oil and raw materials.
So solly.
If the currency of a nation declines meaningfully over a sustained period, it creates significant problems for that nation’s economy. Inflation increases. There is pressure on interest rates to rise. Resources must be diverted from economic development and put into financial payments much of which could be sent overseas.
The foreign debt of China, by June 2015, stood at around US$ 1.68 trillion, according to data from the country’s State Administration of Foreign Exchange as quoted by the State Council. The figure excludes the Special Administrative Regions of Hong Kong and Macau. Chinese foreign debt denominated in the U.S. dollar was 80 percent of the total, euros 6 percent, and Japanese yen 4 percent.
BOYCOTT CHINA!!!!
Singing “I don’t have a Yen/Yuan for you”>>>>>
“poverty. How do you feed , house, clothe etc millions of Chinese who are suddenly non productive? “
Military invasion, India.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.