China threatens 'nuclear option' of dollar sales
By Ambrose Evans-Pritchard
Last Updated: 9:54am BST 08/08/2007


The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation....

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

"Of course, China doesn't want any undesirable phenomenon in the global financial order," he added.


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http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml&CMP=ILC-mostviewedbox

The Chinese own a LARGE amount of USA paper (money). Because the Chinese and so many other developing counties around the world are awash in cash form new fond wealth, they have taken advantage of a weak US dollar to snap up US stocks/bonds/companies crazy!

The Chinese currency "floats'. Because they are an exporter they actually keep the value of the currency low so they can sell more to the world. In truth it is really below where it should be

At present the US dollar is weaker than its ever been. Some in the US government want the Chinese to properly value the yuan/renminbi.
The Chinese are saying they will do what they need to in their own time, but will not mess up their economy to do so.

Basically they are politely telling the US to 'slow their role' as they can mess up things in the US with all the US money they own. Of course the Chinese won't do it as both countries are now joined at the hip. It's just a threat, but a dang good one.

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Why does the US think they can budge China? If they want to effect China they need to step up on their inspections of the goods that they import from there, but they won't because as the Bahamas imports to make up its need, so does the US imports from China/Europe to make up for theirs. And American companies are making too much profits to really encourage any change in Beijing. If I was making tons of cash from the Yuan, why would I want them to revaluate the currency to make it worthless?

The Chinese own a LARGE amount of USA paper (money). Because the Chinese and so many other developing counties around the world are awash in cash form new fond wealth, they have taken advantage of a weak US dollar to snap up US stocks/bonds/companies crazy!
The Chinese currency "floats'. Because they are an exporter they actually keep the value of the currency low so they can sell more to the world. In truth it is really below where it should be
At present the US dollar is weaker than its ever been. Some in the US government want the Chinese to properly value the yuan/renminbi.
The Chinese are saying they will do what they need to in their own time, but will not mess up their economy to do so.
Basically they are politely telling the US to 'slow their role' as they can mess up things in the US with all the US money they own. Of course the Chinese won't do it as both countries are now joined at the hip. It's just a threat, but a dang good one.
~~


They are telling US government slowly in broken Mandarin that they are loosing control of the show! If not lost control!

For the life of me I don't know why the US had envoys in Beijing last week. I figured this is all that would happen.

The US are actually benefiting from a devalued yuan.

Lower yuan = lower wages = lower manufacturing cost = cheaper goods for the US = increased purchases by US consumers= bigger profits for US companies

Most of this is Congressional US bluster.

The Chinese and USA are so joined at the hip that neither will do anything drastic to piss off the other. One false move and they both sink and take the whole world down with them.




(Though the Chinese may have a slight advantage as their people are more used to struggle than Americans).

Blame Bush. Tax cuts sent US funds to China. China didn't become such a powerhouse until 2003 when those tax cuts went into effect and China became the biggest beneficiary of FDI. US corps got rich, the Chinese are getting richer. The rest of us are getting f^cked.

the chinese still gotta be the biggest spammers on the planet .. I delete a few posts a day on one forum from spam spam spam .. all IPs originate from China ..

Anyway, they need the USA as bad as the USA needs them, and both of them know it.

The Chinese own a LARGE amount of USA paper (money). Because the Chinese and so many other developing counties around the world are awash in cash form new fond wealth, they have taken advantage of a weak US dollar to snap up US stocks/bonds/companies crazy!
The Chinese currency "floats'. Because they are an exporter they actually keep the value of the currency low so they can sell more to the world. In truth it is really below where it should be
At present the US dollar is weaker than its ever been. Some in the US government want the Chinese to properly value the yuan/renminbi.
The Chinese are saying they will do what they need to in their own time, but will not mess up their economy to do so.
Basically they are politely telling the US to 'slow their role' as they can mess up things in the US with all the US money they own. Of course the Chinese won't do it as both countries are now joined at the hip. It's just a threat, but a dang good one.
~~



Diplomacy!