Tuesday, Jul 10, 2007
China's massive surplus keeps getting bigger
BBC News: China Trade Surplus Hits Record
This article suggests that China's June trade surplus was boosted by tax changes on July 1st - however, as the tax changes were only announced two weeks before, and space on container ships usually has to be booked at least a month ahead, I doubt that was much of a factor. The Chinese want to be in a position of economic strength, especially in their dealings with the US - but with a surplus this large they will know that it makes sense to let their currency appreciate - which will propel western inflation...
Posted by uncle tom @ 09:55 AM (135 views) Add Comment
3 Comments
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1. Orwell said...
To quote the article:
"But the surplus increase is still likely to fuel tensions with the US, which has accused Beijing of having an overly weak currency to boost exports."
I don't quite understand why people are complaining about Chinese success in manufacturing. We could do with some success in manufacturing in the UK rather than exporting buy to let culture.
Perhaps we need a weaker exchange rate ourselves?
2. dohousescrashinthewoods said...
"Yippee-ki-yay"
3. sold 2 rent 1 said...
UT,
You are on the ball as usual.
Do you think China is heading for an investment bust similar to that of Japan in the late 80s?
If so, will this not bring an end to the commodities super-cycle by 2010?