Of course, I am not talking about the asset price.
First at all, extra manufacturing capacity built up over the past decade.
Secondly, cheap labor.
Then, government can back up non profitable state owned companies to make jobs available, consequently get things done with little cost. Employment and the GDP are the primary concerns of the Chinese government. Sufficient employment and sustainable GDP justify what they did in 1989.
Money is consistently directed into real estate market, flowing in and out from that space on its own.
Export is not a big slice in the GDP. But maintaining healthy export is important for making jobs. Even though China is facing tremendous pressure from its own neighbors to appreciate RMB, no one dares to do so in the fear of triggerring social unrest. I don't expect RMB to appreciate till the end of 2010.
RMB is supposed to peg to a basket of currencies, even though over the past year, it was effectively pegged to the USD. As a matter of fact, RMB depreciated a lot against other major currencies. But real estate market hasn't been negatively affected by such depreciation, neither does PPI. So think twice before coming into conclusion that consequence of appreciation will ultimately be inflation.
Now, the entire world is experiencing moderate stagnation. This is exactly what central bankers wished when they collectively injected enormous liquidity into the world financial system.
Furthermore, China not necessarily wishes to maintain Chiamerica model. It can sign bilateral agreement with some countries, say Japan, to gain independence from the US. Of course, the US will make move too.
Just my 2 cents, don't want to confront with Master Miat.
First at all, extra manufacturing capacity built up over the past decade.
Secondly, cheap labor.
Then, government can back up non profitable state owned companies to make jobs available, consequently get things done with little cost. Employment and the GDP are the primary concerns of the Chinese government. Sufficient employment and sustainable GDP justify what they did in 1989.
Money is consistently directed into real estate market, flowing in and out from that space on its own.
Export is not a big slice in the GDP. But maintaining healthy export is important for making jobs. Even though China is facing tremendous pressure from its own neighbors to appreciate RMB, no one dares to do so in the fear of triggerring social unrest. I don't expect RMB to appreciate till the end of 2010.
RMB is supposed to peg to a basket of currencies, even though over the past year, it was effectively pegged to the USD. As a matter of fact, RMB depreciated a lot against other major currencies. But real estate market hasn't been negatively affected by such depreciation, neither does PPI. So think twice before coming into conclusion that consequence of appreciation will ultimately be inflation.
Now, the entire world is experiencing moderate stagnation. This is exactly what central bankers wished when they collectively injected enormous liquidity into the world financial system.
Furthermore, China not necessarily wishes to maintain Chiamerica model. It can sign bilateral agreement with some countries, say Japan, to gain independence from the US. Of course, the US will make move too.
Just my 2 cents, don't want to confront with Master Miat.
选择“Disable on www.wenxuecity.com”
选择“don't run on pages on this domain”
