Misconceptions of China – Chinese Currency

August 21, 2010

Larry talks about Chinese currency and how the Western media says it is too cheap and isn’t a fair price. The media says this exports American jobs to China.

Many Americans believe that having China revalue its currency is important to America.

However, experts say that if China’s currency were allowed to flow, it would be about 1 to 5 and maybe 1 to 4 instead of 1 to 6 or 1 to 7. 

What that means is that all goods manufactured in China would become more expensive in America and Europe. Prices for products from China could quickly go up 20%

Source: ShiWoLarry

Instead of jobs returning to the US, Western companies that manufacture in China would find cheaper labor elsewhere like in Vietnam. 

In addition, changing the way China values its currency will not cause most customers from other nations to buy from the US, because labor costs in America are too high due to unions.

Larry asks, “Will Chinese goods become more expensive and hurt the US?”  He says, “Yes.”

If anything, this currency issue is more political than economical.

See Doing Business in China or return to Misconceptions of China – Chinese Wealth and Poverty

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Misconceptions of China – Chinese Wealth and Poverty

August 21, 2010

In this post, Larry talks about Chinese wealth and Chinese society. He says that many believe all of China is old and while that may be true in rural areas, China’s major cities have become more modern than American cities.

He mentions films like the most recent Karate Kid, which he feels is not a good representation of Beijing, China’s capital.

The average Chinese person in the big city makes about one thousand US dollars a month. The income disparities in China are similar to those in Latin America while the Chinese middle class is still growing.

Source: ShiWoLarry

Larry says the wealthiest people in China are all business owners. However, in the US, top management of large corporations are paid high salaries compared to management positions in China. In China, to have a chance at wealth, you must own a business.

He feels that lifestyles of the wealthy in America and China are about the same. 

Larry says the cities are modern and have complex public-transport systems. I can attest to this. I’ve ridden the subways in Shanghai and Beijing and they are more efficient at moving more people than public transportation I’ve taken in the US.

See Don’t Drive in Beijing – Take the Subway or go to Misconceptions of China – The Chinese Government

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Fewer Workers and Rising Wages Equals More Spending

August 18, 2010

The Economist published an interesting piece about the changing economic landscape in China.   If you read between the lines, it appears that the Wall Street crash that shook the world in 2008 and is still generating pain may have been a catalyst for changes benefiting the Chinese worker.

In 2008, 670 thousand factories closed their doors in China putting 25 million migrant laborers out of work, but wages went up 17.3% by the end of 2009, which makes no sense.

When I was still teaching and California’s money was tight, schools saw funds cut, jobs lost and salaries frozen, which is still happening now because of the 2008 crash.

A shrinking workforce in China happened to coincide with the 2008 global economic meltdown.  The International Business Times reports that due to China’s longtime one-child, family planning policy, the population of 20 to 39 year-old workers, the backbone of China’s labor force, has dropped 22% in the last 10 years while older workers are staying in the villages.

These changes encouraged China’s central government to shift support from businesses to workers by encouraging the provinces to raise the minimum wage while keeping a low profile during labor unrest.

Some industries moved inland where wages are lower but ended up selling their products to local Chinese consumers, which caused other foreign companies to build factories inland—not for the cheap labor, but to get closer to those local consumers.

According to The Economist, “As pay goes up, the country’s domestic market will become more lucrative. Foreign firms that came for the workers will stay for the shoppers. China will become more of a workshop for itself and less of one for the world.” 

In today’s harsh global economy, China may have the only growing consumer market. In fact, this may generate jobs in America.  To understand, you’ll have to read both pieces yourself.

See Hitting Endless Home Runs

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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In the National Interest

August 17, 2010

It seems America might be helping Vietnam become a nuclear power.

The Hindu reports that China is protesting what might be an American “double standard”.  A leading Chinese strategic expert on nuclear policy and disarmament told The Hindu that any move to allow Vietnam, which neighbors China, to enrich its own uranium would be “double standards” on the part of the U.S.…

This latest hot-button issue took off soon after the Wall Street Journal reported that the US was talking with Vietnam about sharing nuclear fuel and technologies that would include Vietnam enriching its own fuel, which is used in nuclear weapons.

Why would the U.S. play this dangerous game?  The answer may be found from Margi Mason of the Associated Press.  She writes that the U.S. has a “national interest” in seeing the claims resolved in the South China Sea.

So, what is in the national interest of the US to help Vietnam?  The answer is oil and to keep our military close to China while gaining allies. 

The US population needs the gasoline and diesel made from oil to drive to work and shop. The huge oil companies need to sell that oil, gasoline and diesel so they can pay wages to their employees while making profits. America’s national interest is everything to do with jobs and the economy.

However, China is not happy because what the US is doing in Vietnam is not in China’s national interest.

Discover The Real Police State

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Really Fast Trains in and from China

August 13, 2010

Devin Coldewey at Crunch Gear writes about plans for future-trains in China that may run at speeds of 1000 kilometers or 620 miles an hour.

China is looking into increasing speeds for longer distances by using maglev trains without air resistance by building vacuum-sealed tunnels. Today’s maglev trains with air resistance are capable of hitting speeds of about 500 km/h.

Darren Murph at engadget.com also wrote about these super-fast trains.  Darren mentions that China says they will have maglev trains ready in three years.  In fact, they have one now outside Shanghai. I have ridden the maglev train that runs from Pudong Airport to Shanghai. It seldom hits its top speed for the short trip, but it is smooth and fast—a few minutes compared to more than forty in a taxi or bus.

To reach speeds of 1000 km/h means more money. Each kilometer to build these vacuum tubes will cost an extra $2.95 million American. I have a question. What happens if the vacuum tube springs a leak?

Darren ends with “Pony up, taxpayers!”, but that’s not how the Chinese raise money.  Most money in China comes from the profits of state-run banks, industries and duties on imports and exports not on income or property, although that may be changing as China studies how the US government raises money.

China is also planning to build high-speed rail from Beijing to London. Source: The Sydney Morning Herald Traveller

See China On the Fast Track

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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