Center
http://news.xinhuanet.com/english/2004-11/21/content_2244314.htmSANTIAGO, Nov. 21 (Xinhuanet) -- China will set up an Asia-PacificFinance and Development Center, providing a platform for Asia-Pacific economies to step up exchanges and capacity-building, Chinese President Hu Jintao announced here Sunday.
Speaking at Retreat II of the 12th Economic Leaders' Meeting ofthe Asia-Pacific Economic Cooperation (APEC), the Chinese president urged the APEC member economies to deepen their mutually-beneficial cooperation in the promotion of an Asia-Pacific Community.
The Chinese president said Chile, the host, chose this year's theme of APEC Economic Leaders' Meeting as "One Community, Our Future", thus well reflected the wishes of the APEC members.
"Common interests and common future require us to shoulder common responsibility and exert joint efforts." Hu said. "We should grasp the opportunities brought about by economic globalization and regional integration process, take full advantages of the APEC platform to learn from each other, push forward closer and mutually beneficial economic and trade cooperation, for the sake of laying a solid foundation for achieving sustainable common development."
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Tie that in with the fact that they pretty much resist Western capitalistic ways...
The Rotten Fruits Of America's Strong Dollar Policy
http://www.nationalinvestor.com/rotten_fruits_of_america.htmsnip>
In this cycle, one of the most noteworthy features has been the rise in the real value of the dollar against the emerging world undefined particularly emerging Asia. This is in sharp contrast with the past, when higher domestic inflation plus a fixed real exchange rate caused these countries to experience an ongoing real appreciation of their currencies against the dollar. This real appreciation partially offset their rapidly improving abilities to compete with the U.S. in more and more markets.
By contrast, in this cycle, despite continued productivity increases in tradables relative to the U.S., these countries have undergone massive devaluations against the dollar. Even with the strong economic recoveries from the crisis-induced lows of 1998, these countries' currencies still linger well below levels sustained throughout most of the early 1990s. We have always believed that this huge departure from the trend path of these currencies would create the potential for quantum increases in competitiveness at the expense of the U.S. Such gains in potential competitiveness extend even to countries like China; even though there has been no devaluation of the Chinese currency, the combination of significant domestic price deflation in tradables and expanding export subsidies have reduced prices of manufactured exports relative to the cost of their production in the U.S.
All this has occurred during a time of incredible vulnerability for the U.S. economy. For two and a half decades the dollar has eroded amidst repeated balance of payment crises. This time conditions are far worse. The dollar's ascent since 1995 started with a current account deficit to GDP ratio that was higher than it was prior to the dollar bubble of 1984-85. We are now looking to an all-time record in the current account deficit relative to GDP. But in the past, in the case of each previous dollar crisis, the U.S. was a net creditor nation. This time it is a huge debtor nation to the tune of 27-28% of GDP. Its room to maneuver is limited, yet the Asian economic export juggernaut continues unabated.
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The only real beneficiary of such inept and short-sighted policy making has been Asia, which has recovered faster than anybody thought possible a few years ago. Despite some short-term compromise, Asia did not fundamentally reform "Western style" as some arrogant market commentators and institutions such as the IMF advocated so strongly back in 1998 at the height of the region's financial crisis. Its governments are increasingly dominated again, not by Western, IMF-approved technocrats, but policy makers who recognize that Asia's "Alliance capitalism" is simply not compatible with volatile international capital flows and Hobbesian Western market behavior.
Above all, China has proved resistant to Western ways. Its relatively closed borders to volatile Western leveraged capital (notwithstanding the pleas of Wall Street) enabled it to emerge from the regional crisis of 1997/98 relatively unscathed. As the recent data suggests, it is now well prepared for growth on its own terms (which is why one should not expect imminent capital account liberalization and a corresponding revaluation of the currency). It will be the economic leader in the global recovery. Asian development strategies will continue to deepen further as China's regional economic dominance expands. China is not the source of the world's current problems; it is not, as is commonly argued, "exporting deflation." Rather, it has been the persistent refusal of the American government to conduct economic policy with an eye toward preventing a loss of U.S. competitiveness, and a corresponding rise in huge external imbalances, that has caused the relative shift in economic fortunes in regard to America and Asia. The source of potential U.S. deflation, and today's quandary for American monetary and financial officials, is very much home-grown.
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