BEIJING—Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a "product of the past" and highlighted moves to turn the yuan into a global currency.
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Associated Press
Chinese President Hu Jintao delivers a speech at a plenary session of the Communist Party of China Central Commission for Discipline Inspection in Beijing on Jan. 10. Mr. Hu's state visit to Washington begins Wednesday.
"We both stand to gain from a sound China-U.S. relationship, and lose from confrontation," Mr. Hu said in written answers to questions from The Wall Street Journal and the Washington Post.
Mr. Hu acknowledged "some differences and sensitive issues between us," but his tone was generally compromising, and he avoided specific mention of some of the controversial issues that have dogged relations with the U.S. over the past year or so—including U.S. arms sales to Taiwan that led to a freeze in military relations between the world's sole superpower and its rising Asian rival.
On the economic front, Mr. Hu played down one of the main U.S. arguments for why China should appreciate its currency—that it will help China tame inflation. That is likely to disappoint Washington, which accuses China of unfairly boosting its exports by undervaluing the yuan, making its products cheaper overseas. The topic is expected to be high on U.S. President Barack Obama's agenda when he meets Mr. Hu at the White House on Wednesday.
Mr. Hu also offered a veiled criticism of efforts by the U.S. Federal Reserve to stimulate growth through huge bond purchases to keep down long-term interest rates, a strategy that China has loudly complained about in the past as fueling inflation in emerging economies, including its own. He said that U.S. monetary policy "has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level."
More
Q&A With Hu Jintao
U.S. Presses China for Deals
Quick Biography: Hu Jintao
Hu Takes Confident Tone on Inflation
Hu Goes to Washington
See photos of past visits.
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Mr. Hu arrived in the U.S. Apriul 12, 2010.
Mr. Hu's responses reflect a China that has grown more confident in recent years—especially in the wake of the global financial crisis, from which it emerged relatively unscathed.
Mr. Hu reiterated China's belief that the crisis reflected "the absence of regulation in financial innovation" and the failure of international financial institutions "to fully reflect the changing status of developing countries in the world economy and finance." He called for an international financial system that is more "fair, just, inclusive and well-managed."
Mr. Hu, who also heads China's ruling Communist Party, rarely interacts with the international media. The Wall Street Journal submitted a series of questions to China's Foreign Ministry for Mr. Hu to answer. The Washington Post also submitted questions. The Foreign Ministry supplied Mr. Hu's responses to seven questions—but did not address questions about imprisoned Nobel Peace Prize winner Liu Xiaobo, China's growing naval power and complaints about alleged Chinese cyberattacks, among others.
Mr. Hu's veiled criticism of the Fed reflects widespread feelings among developing nations that U.S. interest-rate policy is devaluing the dollar, prompting flows of capital overseas and creating inflation elsewhere. China and other developing countries would like the Fed to factor in those consequences when it makes decisions. Fed officials counter that their mandate is to bolster the U.S. economy and that a stronger U.S. economy is in the interests of China and other countries, which depend heavily on trade and investment from the U.S.
This could be a major issue of contention between Messrs. Hu and Obama. The U.S. blames Chinese currency undervaluation—not Fed policy making—for worsening competitive and inflation problems overseas.
"This is a new ballgame in the first inning," says Eurasia Group's Ian Bremmer about China's rise. In an interview with WSJ's Rebecca Blumenstein, Bremmer discusses the growth of Chinese economic and military power and President Hu's U.S.visit.
Some of Mr. Hu's most significant comments dealt with the future of the dollar and currency exchange rates.
"The current international currency system is the product of the past," he said, noting the primacy of the U.S. dollar as a reserve currency and its use in international trade and investment.
The comment is the latest sign that the dollar's future continues to concern the most senior levels of the Chinese government. Beijing fears not only that loose U.S. monetary policy is fueling inflation, but that it will erode the value of China's holdings of dollars within its vast foreign-exchange reserves, which reached $2.85 trillion at the end of 2010.
China's central bank governor, Zhou Xiaochuan, created an international stir in March 2009 by calling for the creation of a new synthetic reserve currency as an alternative to the dollar. Mr. Hu's comments add to the sense that China intends to challenge the post-World War II financial order largely created by the U.S. and dominated by the dollar.
Mr. Hu called attention to China's accelerating effort to expand the role of its own currency, describing recent moves to allow greater use of the yuan in cross-border trade and investment—while acknowledging that making it a fully fledged international currency "will be a fairly long process."
China's moves already have spawned a thriving market for offshore trading of yuan in Hong Kong, and are widely seen as first steps toward making the yuan an international currency in line with China's new prominence as the world's second largest economy. Mr. Hu offered an enthusiastic endorsement of what are officially described as currency "pilot programs." They "fit in well with market demand as evidenced by the rapidly expanding scale of these transactions," he said.
Mr. Hu didn't signal any changes on the most sensitive aspect of China's currency policy: the exchange rate.
Last week, U.S. Treasury Secretary Timothy Geithner reiterated the U.S. position that a stronger yuan is in China's own best interests, because it would help tame rising inflation that has become a key risk to China's rapid growth, which is underpinning the global economic recovery. A stronger yuan would reduce the price of imports in local-currency terms.
But Mr. Hu shrugged off the U.S. argument, saying that China is fighting inflation with a whole package of policies, including interest-rate increases, and "inflation can hardly be the main factor in determining the exchange rate policy."
Further, Mr. Hu suggested that inflation was not a big worry, saying prices were "on the whole moderate and controllable." He added: "We have the confidence, conditions and ability to stabilize the overall price level."
The U.S. argues that the yuan's real exchange rate—that is, the exchange rate as adjusted for the higher inflation level in China than the U.S.—is rising at a 10% annual rate. Treasury officials have argued to China that its policy options are limited—either it can boost the exchange rate to fight inflation, or inflation will effectively boost the value of China's currency.
While the U.S. says some Chinese economic officials buy that argument, it hasn't been widely adopted within China, as Mr. Hu's comments illustrate. But the U.S. feels that economics and time are on its side. Even so, the administration and Congress will continue to press China to boost the pace of its currency appreciation.
Mr. Hu renewed a Chinese pledge to offer a level playing field in China for U.S. companies, which have complained about aggressive Chinese moves to usurp their technology and shut them out of massive government-procurement contracts.
"All foreign companies registered in China are Chinese enterprises," Mr. Hu said, responding to concerns that China discriminates in government procurement against foreign businesses as part of its drive to encourage so-called indigenous innovation.
He added: "Their innovation, production and business operations in China enjoy the same treatment as Chinese enterprises."
The U.S. has been pressing China to revamp its plans for indigenous innovation, which foreign companies say put them at a disadvantage in competition with China's state-owned firms, which limits the types of government development projects and requires that companies get government approval to participate. China has pledged to join the World Trade Organization's government procurement agreement, which limits a country's ability to discriminate. But the U.S. and other countries say that so far China's WTO offer is inadequate because it exempts provinces, municipalities and state-owned enterprises. Last month China pledged to amend a buy-Chinese provision. During the Hu visit, the U.S. hopes to see some other commitments on this front from China.
Mr. Hu began his answers with a relatively upbeat assessment of China-U.S. relations, which he said had "on the whole enjoyed steady growth" since the start of this century.
From the WSJ:
He spoke of expanding cooperation from economy and trade into new areas like energy, infrastructure development and aviation and space. "We should abandon the zero-sum Cold War mentality," he said, and "respect each other's choice of development path."
On the diplomatic front, Mr. Hu entirely glossed over what has been one of the most dramatic developments of the past year—a series of disputes between a more assertive China and its neighbors that has given the U.S. an opening to shore up its relations with a part of the world that felt neglected by Washington while it fought wars in Iraq and Afghanistan.
In the past year, China has feuded with Japan over the seizure of a Chinese fishing boat and its crew off disputed islands; opened deep differences with South Korea because of its subdued response to military provocations by North Korea; and alarmed countries in Southeast Asia by declaring the South China Sea and its energy and mineral riches one of its "core interests."
"Mutual trust between China and other countries in this region has deepened in our common response to tough challenges, and our cooperation has continuously expanded in our pursuit of mutual benefit and win-win outcomes," Mr. Hu said, ignoring the regional turmoil.
Sunday, January 16, 2011
The Future Explained in Data for My 10 Year Old Daughter
My daughter asked me the following question today: (while I was mulling over the current taxes, muttering about responsible spending): "why do we pay taxes? And “why do they always want to raise them”?
I have a very strict policy with myself (never say I don't know and walk away) If I don't know, I admit it immediately and the research ensues TOGETHER so we BOTH learn something new.... Let the dialogue begin and research light up the atmosphere! "Ah another puzzle to solve" says my daughter. I wink and say, “Are you ready Detective Daughter"? Her reply "Let it ROCK"!
After both of us scouring the Internet and Wikipedia: I mulled over the data in my mind.... I told her, “I need a little quiet time to try to digest my pencil scribbles on my scratch piece of paper”...She said, "Mommy take a deep breath you are getting those lines between your eyebrows...relax".
An analogy of a Praying Mantis from PIMCO's William H. Gross really hit a disturbing cord in my being:
Little did I know how much our "puzzle solving expedition would upset me"....
I tried to hide my extreme displeasure at the "Reality" of her future (and mine for that matter) I wanted her to draw her own conclusion from the data. So I began by explaining to her, “there are "good taxes" and "bad taxes".... “Good taxes are Police, Education, Hospitals, Veterans Benefits and things that provide for the future that make us grow”.
Then she asked how much we spend on "good taxes" vs. "bad taxes"?
I said, “The United States Government spends in her name (yes hers!) (And also per capita, all those other nameless taxpayers):
You Pay: $3,000.00 per person per year on the Defense Budget
In comparison to the:
Paying $450.00 for her teachers and education. (What is wrong with this picture Jeeze a WHOPPING $450 per person to educate people? Argh, I didn’t say it but I wanted too)
That got me a serious look, the serious look of a 10 year old girl... a crinkle of the left eye and a tilt of the head....
“So I pay $3,000 a year to kill people?”
And $450.00 to educate me?"
I couldn't contain my complete disdain at this point any longer...but I maintained my calm non-inflected voice and said:
"Oh it gets much better Sweetie"....
The United States Government has taken out an "invisible credit card" in your name and decided that they would charge $48,000.00 to that "invisible credit card". So not only do you have to pay off the $48,000.00 BUT in addition to the principal you have to pay another $800.00 in interest on a yearly basis and it's going up as we speak.
You also pay $2,500.00 per year to pay for the retirement pension for those people in the government who got you that "invisible credit card"...
I tried to turn the discussion around to the positive side (but as one of my friends says: "you can put lipstick on a pig...but it's still a pig)...(Thanks SK)
"So Sweetie: lets focus on the good taxes"...
You pay: $2,800 so that your grandma and mother can get cheap health care. Although cheap doesn’t necessarily mean good.
You pay: $330.00 for transportation and roads.
You pay: $183.00 for courts.
(This one killed me!!!! Of which I will go into a full-blown rant next post!!! Remind me)
You pay: $50.00 for Basic research...(Will someone please define what "basic research" is exactly?)
She will also pay about $60.00 on something called "farm income stabilization"...."But Mom what's that"? She says. I state: (we will have to do some more detective work but I think) "that's when they pay "Federal Crop Insurance" and into something called the "Credit Commodity Fund".
I try to reassure her with: "Honey, Don't worry about the small things". (Although they do all add up)...."It's kind of like your brother pick pocketing you versus him taking your debit card and stealing all your allowance and savings".... Focus on the BIG things. Remember what I always quote.... she says, "Yes, I know.... Mom...Sun Tzu: Choose your wars wisely".
Back to the "good things" taxes go toward: You pay: $1,500.00 for welfare on your behalf...
You pay: $611.00 for something called "social exclusions". "What's the heck is that Mom?"
(My head is going to explode.....)
"Eeeeeekkk! I don't know...we will have to research that"...
She states the obvious: "So we spend $611.00 for something we don't even know what it is? And $450.00 for education and $50.00 for BASIC RESEARCH?!!!"
“So by the time you start working you will be paying 2,500 in interest per year and who knows what your entitlements will be?”...
“What the HECK!”!!!!!
She pauses then says, “So let me get this straight: If I asked congress how to spend my allowance and savings : they would say from your allowance: We will give a 1/3 to your brother to buy air soft guns to shoot people, give us another 1/3 to pay for “their” retirement and another 1/3 for health care “? I say, “Yes, but don’t forget to add an extra 1/3 for paying interest to whichever country we owe the interest and debt”? “Mommy that’s 4/3'rds”... “Yes, I know dear...They expect you to borrow an extra 1/3... Congressmen like to spend 4/3. You just borrow it.”...
WAKE UP AMERICA! Stop being the “Headless Praying Mantis”
For our children’s sake!
I have a very strict policy with myself (never say I don't know and walk away) If I don't know, I admit it immediately and the research ensues TOGETHER so we BOTH learn something new.... Let the dialogue begin and research light up the atmosphere! "Ah another puzzle to solve" says my daughter. I wink and say, “Are you ready Detective Daughter"? Her reply "Let it ROCK"!
After both of us scouring the Internet and Wikipedia: I mulled over the data in my mind.... I told her, “I need a little quiet time to try to digest my pencil scribbles on my scratch piece of paper”...She said, "Mommy take a deep breath you are getting those lines between your eyebrows...relax".
An analogy of a Praying Mantis from PIMCO's William H. Gross really hit a disturbing cord in my being:
We are all, more than likely, doomed to be mantis-like – some of us eating, some of us being eaten, but none quite aware as to why we are at the dinner table in the first place.~William H. Gross
Americans, unlike their developed world counterparts, have been eating their fill lately, and supping at a dinner table laden with pork and tax breaks for all. Unequivocally, we have been playing the part of the female mantis, munching on the theoretical heads of future generations, while paying no mind to the wretches that will eventually be called upon to pay the bills.
Little did I know how much our "puzzle solving expedition would upset me"....
I tried to hide my extreme displeasure at the "Reality" of her future (and mine for that matter) I wanted her to draw her own conclusion from the data. So I began by explaining to her, “there are "good taxes" and "bad taxes".... “Good taxes are Police, Education, Hospitals, Veterans Benefits and things that provide for the future that make us grow”.
Then she asked how much we spend on "good taxes" vs. "bad taxes"?
I said, “The United States Government spends in her name (yes hers!) (And also per capita, all those other nameless taxpayers):
You Pay: $3,000.00 per person per year on the Defense Budget
In comparison to the:
Paying $450.00 for her teachers and education. (What is wrong with this picture Jeeze a WHOPPING $450 per person to educate people? Argh, I didn’t say it but I wanted too)
That got me a serious look, the serious look of a 10 year old girl... a crinkle of the left eye and a tilt of the head....
“So I pay $3,000 a year to kill people?”
And $450.00 to educate me?"
I couldn't contain my complete disdain at this point any longer...but I maintained my calm non-inflected voice and said:
"Oh it gets much better Sweetie"....
The United States Government has taken out an "invisible credit card" in your name and decided that they would charge $48,000.00 to that "invisible credit card". So not only do you have to pay off the $48,000.00 BUT in addition to the principal you have to pay another $800.00 in interest on a yearly basis and it's going up as we speak.
You also pay $2,500.00 per year to pay for the retirement pension for those people in the government who got you that "invisible credit card"...
I tried to turn the discussion around to the positive side (but as one of my friends says: "you can put lipstick on a pig...but it's still a pig)...(Thanks SK)
"So Sweetie: lets focus on the good taxes"...
You pay: $2,800 so that your grandma and mother can get cheap health care. Although cheap doesn’t necessarily mean good.
You pay: $330.00 for transportation and roads.
You pay: $183.00 for courts.
(This one killed me!!!! Of which I will go into a full-blown rant next post!!! Remind me)
You pay: $50.00 for Basic research...(Will someone please define what "basic research" is exactly?)
She will also pay about $60.00 on something called "farm income stabilization"...."But Mom what's that"? She says. I state: (we will have to do some more detective work but I think) "that's when they pay "Federal Crop Insurance" and into something called the "Credit Commodity Fund".
I try to reassure her with: "Honey, Don't worry about the small things". (Although they do all add up)...."It's kind of like your brother pick pocketing you versus him taking your debit card and stealing all your allowance and savings".... Focus on the BIG things. Remember what I always quote.... she says, "Yes, I know.... Mom...Sun Tzu: Choose your wars wisely".
Back to the "good things" taxes go toward: You pay: $1,500.00 for welfare on your behalf...
You pay: $611.00 for something called "social exclusions". "What's the heck is that Mom?"
(My head is going to explode.....)
"Eeeeeekkk! I don't know...we will have to research that"...
She states the obvious: "So we spend $611.00 for something we don't even know what it is? And $450.00 for education and $50.00 for BASIC RESEARCH?!!!"
“So by the time you start working you will be paying 2,500 in interest per year and who knows what your entitlements will be?”...
“What the HECK!”!!!!!
She pauses then says, “So let me get this straight: If I asked congress how to spend my allowance and savings : they would say from your allowance: We will give a 1/3 to your brother to buy air soft guns to shoot people, give us another 1/3 to pay for “their” retirement and another 1/3 for health care “? I say, “Yes, but don’t forget to add an extra 1/3 for paying interest to whichever country we owe the interest and debt”? “Mommy that’s 4/3'rds”... “Yes, I know dear...They expect you to borrow an extra 1/3... Congressmen like to spend 4/3. You just borrow it.”...
WAKE UP AMERICA! Stop being the “Headless Praying Mantis”
For our children’s sake!
Monday, January 10, 2011
Tuesday, January 4, 2011
Paul! Hurry UP! I can't wait to see the rest of the dang movie!
I always seem to meet people when traveling! This is one of my many finds on the road, actually a diamond out of nowhere. Had a my favorite seat in American Airlines Terminal with the outlet next to him and a Louisville Chuggers Shirt on and the ONLY open seat next to him in the entire bar! SCORED the plug for my laptop! Thank goodness no one was sitting next to him...I didn't get any work done because as fate has it...His t-shirt made me ask the question: Are you from Louisville? "Yes" Really what part? "You've probably never heard of it"...Try me..Well ends up he grew up in the same dry town that my brother lives in and the same tiny town with one stop light as my nephews....Paul Perez...NYC JFK-LAX now that is a whole nother story! Laughter for many years...and years to come!
PAUL!!!! FREAKING release the movie so I can find out what happens! Jeeeezus! Stop being a perfectionist AND PROFESSIONAL secret keeper! I'm going to get Marky B to tell me on my next trip to Louisville....Dang Chuggers!
PAUL!!!! FREAKING release the movie so I can find out what happens! Jeeeezus! Stop being a perfectionist AND PROFESSIONAL secret keeper! I'm going to get Marky B to tell me on my next trip to Louisville....Dang Chuggers!
Pretty Little Boxes: Part IV Why Portland Rocks!!
EMBRACE IT ALL.... Remember in history when:
Showing your ankle was immoral (kind of like ehhhmmm some places where it is still considered immoral today)
It's much more fun to wear victorian era clothing now! (Because you don't have too!) Change is inevitable! Thank who ever you pray to! Otherwise we would all be tottering around in humongous crinolines and corsets unable to breathe!
THANK YOU PINK! FOR SAYING WHAT I WAS TRYING TO SAY IN MY BLOG!
Showing your ankle was immoral (kind of like ehhhmmm some places where it is still considered immoral today)
It's much more fun to wear victorian era clothing now! (Because you don't have too!) Change is inevitable! Thank who ever you pray to! Otherwise we would all be tottering around in humongous crinolines and corsets unable to breathe!
THANK YOU PINK! FOR SAYING WHAT I WAS TRYING TO SAY IN MY BLOG!
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