Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

China Reports Huge Trade Surplus With U.S. Signaling More Currency Tensions

Currencies / China Currency Yuan Aug 12, 2010 - 06:27 AM GMT

By: Pravda

Currencies

Despite forecasts of a cooling demand for Chinese products in the USA and EU, Beijing has reported a huge trade surplus figure after exports soared to 145.5 billion USD in July, a year-on-year increase of 38.1%. In the pipeline: tensions between Washington and Beijing over the valuation of the Renmimbi?


The People’s Republic of China has reported a record trade surplus of 28.73 billion USD for July, with exports growing by 38.1% and imports reducing from 34.1% in June to 22.7% in July, an increase of 22.7% over the twelve months from July 2009. The question is now whether Washington will exert pressure on Beijing to revalue the Renmimbi (China’s currency) and provoke the reply that China’s trade surplus is not the result of its exchange rate policy.

The Chinese economy is staggeringly resilient and awesomely powerful, as per the new trade figures released. From the 1980s onwards, the PR China has posted an average GDP growth rate of around 8% per annum, while over the last three decades the economy has grown tenfold, translated in concrete terms into 3.42 trillion USD.

While there is a vast difference between the global GDP and the GDP per capita (the Purchasing Power Parity GDP of the PR China is second only to that of the USA, while Purchasing Power Parity per capita is some 2,000 USD, or 107th out of 179 countries).

The latest figures contradict previous forecasts of a cooling in demand in the main markets for Chinese products, namely the USA and European Union.

China’s vast economic growth-rate is the result of the economic reforms which were begun in the 1970s and 1980s. These started with a shifting of the sectorial balance from the tertiary to the secondary sector as farming gave way to manufacturing, continued with a steady liberalization of prices and followed with a policy of fiscal decentralization.

State-owned businesses started to gain more autonomy in their spheres of actions and began to behave like public-private ventures and government regulation was altered, again decentralizing and affording more manoeuvrability at the regional and local level.

These policies in turn created internal demand (a fundamental part of Michael Porters’ theory of competitiveness of nations) and gave rise to the appearance of private companies in the services and light manufacturing areas.

As a result, the banking system was also deregulated at the national level and was able to adapt, producing products for the local markets, strengthening the economy and creating the conditions for a steady growth of the stock market, while an opening of the economy gave rise to foreign direct investment.

The People’s Republic of China is a very good example of how a transition can be made between economic systems without the hiccoughs which accompanied other countries during the tumultuous decade of the 1990s.

Timothy BANCROFT-HINCHEY

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in