TPP will hurt CN economy badly.

Thảo luận trong 'English Discussion' bắt đầu bởi Sax, 27/7/15.

  1. Sax

    Sax Well-Known Member

    TPP Will Hurt China Companies
    By Chris Priddy on June 9th, 2015Posted in China Business, Legal News
    China, the world’s second largest economy, is not one of the twelve countries currently negotiating a Trans-Pacific Partnership (“TPP”) multilateral trade agreement. The United States and Japan, respectively the world’s No. 1 and No. 3 largest economies, are anchoring the negotiations. Nonetheless, a concluded TPP could adversely impact companies in China that manufacture and export goods.

    By way of background on the TPP, please reference my blog posts here and here.

    TPP will adversely impact China businesses.

    One of the principal objectives of any free trade agreement, and specifically the one being pursued under the TPP, is eliminating or significantly reducing participating countries’ import tariffs. As referenced in one of my previous blogs about the TPP, the Office of the U.S. Trade Representative (“USTR”) used an example of U.S. automobile parts exports to Vietnam to show the importance of import tariff reductions to U.S. companies.

    In the USTR’s example, exports of certain automobile parts to Vietnam are subject to a 27% Vietnamese import tariff. Because China, the European Union, and India have free trade agreements (“FTAs”) with Vietnam, exports of these countries’ automobile parts are not subject to Vietnam’s 27% import tariff. If the TPP eliminates Vietnamese tariff rates for U.S. automobile parts, U.S. exporters will have achieved a level and more competitive playing field in Vietnam against exporters from China, the EU, and India. Trade in Goods, USTR. In the example and after TPP, Vietnamese imports of automobile parts from China, the EU, India, and the United States will all be subject to no import tariffs.

    Based on other FTAs signed by the United States, we can assume that the TPP would have strict requirements for determining an imported good’s country of origin and whether it qualifies for lower import tariffs under the TPP. For example, under the 2012 U.S.-Korea Free Trade Agreement (“KORUS”), a product traded between the United States and Korea generally must meet one of the following criteria to be eligible for 0% or reduced import tariffs:

    • wholly obtained from one of the countries –an example of which is an agricultural product (like a tomato) that was grown from seed in the country;
    • produced in either Korea or the United States, with any input originating in another country having undergone a shift in Harmonized Tariff Schedule or “HTS” classifications as outlined in KORUS – for example, KORUS may require that a product’s components originally classified under one subheading chapter be ultimately included in a finished product that is classified under another subheading; or
    • produced in either Korea or the United States with any other country’s inputs accounting for less than a total percentage of the product’s net value or cost.
    Referencing USTR’s automobile parts example above in the context of the TPP, we can understand how the TPP could adversely impact companies in China that manufacture and export parts and components. Let’s assume that the TPP is signed by the 12 participating countries and that under USTR’s example, Vietnam’s 27% import tariff is eliminated for automobile parts from the TPP countries. Let’s also assume that a U.S. company (“Company ABC”) makes automobile parts and sources some subcomponents from China.

    If Company ABC wants to export its automobile parts to Vietnam with no import duty, and thus be competitive with Chinese, EU and Indian companies whose companies’ parts have no import duties, Company ABC will first need to determine whether its parts will be deemed of U.S. origin under TPP. This is a significant concern for Company ABC because it sources certain subcomponents from China and because its product will be subject to a 27% import duty if Company ABC cannot demonstrate its product is of U.S. origin. If the value or cost of auto subcomponents is too great or the subcomponents do not undergo the required HTS shifts so that Company ABC can claim U.S. origin for the finished auto part, Company ABC may reduce or eliminate sourcing of parts from China for exports to Vietnam.

    As demonstrated by this example, manufacturers and exporters in China could lose customers or current product demand levels because companies under TPP would want to ensure their products qualify for TPP benefits. Companies in those countries negotiating the TPP will be carefully evaluating TPP country of origin requirements and the impact on their goods. So will companies in China.
  2. Sax

    Sax Well-Known Member

    I think after TPP come to reality, it only takes abt (about) 10 years to make CN economy collapse. Right, VN govt. (government) should prepare for it from now.

    If CN broke into many seperate states like Soviet, I thinks VN should think abt taking back Guangdong-Guangxi, too :D
    Last edited: 28/7/15
  3. Sax

    Sax Well-Known Member

    Pacific trade officials fail to agree on final TPP deal
    Sources at Hawaii meet say Trans-Pacific Partnership held up by disputes on car, drug, and dairy trade.
    01 Aug 2015 05:41 GMT |
    • Failure to seal the agreement is a setback for US President Barack Obama, given the trade pact's stance as the economic arm of the administration's pivot to Asia and an opportunity to balance out China's influence in the region.

      The talks, which drew about 650 negotiators, 150 journalists and hundreds of stakeholders to Maui, had been billed as the last chance to get a deal in time to pass the US Congress this year, before 2016 presidential elections muddy the waters.

      The deal seeks to meld bilateral questions of market access for exports with one-size-fits-all standards on issues ranging from workers' rights to environmental protection and dispute settlement between governments and foreign investors.
  4. Sax

    Sax Well-Known Member

    If US can not finish the deal this year, then maybe they need to wait for 2-3 years

    If TPP cant come to reality in abt 3 years, then US may face wt high risk of losing in economic war against CN-Russia .:)
    Last edited: 2/8/15
  5. Sax

    Sax Well-Known Member

    TPP will go ahead, in fact if they are close to 98% of the deal in just 4 days, this is a very good achievement already.

    Some people seems to forget TPP is the mother of All deal, if sign in the current form, it will cover at least 40% of world economy (that's 3 .3 times Chinese trade volume for those who don't know)

    And this deal simply need more time to cook up, but at the end of the day, it is going to take longer than 4 days in Hawaii to hammer it out..

    (quoted )
  6. Sax

    Sax Well-Known Member

    Vietnam completes TPP bilateral negotiations with US, Japan; finishes talks with all parties


    UPDATED : 08/03/2015 16:24 GMT + 7

    bilateral negotiations with two top economies, the U.S. and Japan, on the Trans-Pacific Partnership (TPP) trade agreement, according to the Vietnamese Multilateral Trade Policy Department.

    Minister of Industry and Trade Vu Huy Hoang joined his counterparts from eleven other countries in negotiating the TPP in a ministerial meeting from June 28 to July 31 in Hawaii, in order to address remaining issues before concluding the TPP talks, the department under the Ministry of Industry and Trade said on Monday.

    The TPP is a proposed regional free trade agreement aimed at eliminating tariffs and lowering non-tariff barriers that is being negotiated by 12 countries throughout the Asia-Pacific region.

    The countries include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam, which collectively contribute almost half of global output and over 40 percent of world trade.

    Minister Hoang was accompanied by a Vietnamese delegation of the leaders and representatives of some relevant ministries and state agencies, the department said.

    After all the negotiations within the Hawaii meeting, Vietnam has completed all bilateral talks with all of the countries concerned.

    The Vietnamese delegation involved in the negotiations worked with a positive attitude to protect the interests of Vietnam, while also willing to cooperate with the other TPP countries on the principle of mutual benefits in an effort to conclude their talks.

    During the four-day meeting, Minister Hoang engaged in bilateral talks with U.S. Trade Representative Michael Froman and Japanese Economy Minister Akira Amari.

    The Vietnamese minister also partook in meetings with Malaysian Minister for International Trade and Industry Dato' Sri Mustapa Mohamed and Mexican Secretary of Economy Ildefonso Guajardo Villarreal.

    He also talked to Minister for Trade and Industry of Singapore Lim Hng Kiang and Minister for International Trade of Canada Ed Fast on the sidelines of the meeting, the department added.

    Talking to the press recently, Minister-Chairman of the Government Office Nguyen Van Nen said that the central government focused on directing the Vietnamese delegation to join the TPP negotiations.

    These efforts included lobbying the U.S. delegation so that the U.S. will recognize Vietnam as a market economy to reduce barriers to Vietnamese goods when they are shipped to other markets in the TPP area, Nen said.

    The TPP countries have made significant progress, leaving only a handful of issues that need more time for consultation locally following the meeting in Hawaii, according to the Vietnamese department.

    They have pledged to continue maintaining the momentum of negotiations to resolve the outstanding issues as soon as possible, the department said.

    Pacific Rim trade ministers on July 31 failed to clinch a deal to free up trade between the participating nations after a dispute flared up over auto trade between Japan and North America, New Zealand dug in over dairy trade and no agreement was reached on monopoly periods for next-generation drugs, Reuters reported.

    Trade ministers from the 12 nations negotiating the TPP pact fell just short of a deal at talks on the Hawaiian island of Maui but were confident an agreement was within reach, according to Reuters.

    Speaking at a press meeting after the negotiations ended in Hawaii on July 31, Japanese Economy Minister Akira Amari said it is likely that the next round of TPP talks will take place late this month.

    A local economist, Dr. Tran Vinh Du, told Tuoi Tre (Youth) newspaper that experts were a bit surprised by the results of the negotiations in Hawaii, which is expected to be the last round of talks for the TPP pact.

    According to Dr. Du, after the Obama administration obtained Trade Promotion Authority or Fast Track Authority from Congress, the countries participating in the negotiations were supposed to be able to seize that opportunity to conclude the pact.

    Vietnam is one of the nations which are quite flexible in negotiations so that the trade deal can be clinched soon, he said, adding that many people in the Southeast Asian country have felt disappointed at some countries continuing to maintain their hard-line stance.

    The causes of disagreement include the biggest and toughest issues which are not easy for a consensus to be reached overnight, he said. With this development, according to Dr. Du, it is very hard for the countries involved to conclude their negotiations this year as expected.
  7. Sax

    Sax Well-Known Member

    TPP is designed to ensure US multinationals dominate their industry by increasing barriers to entry for domestic companies from other countries. This is why it's done in secret because there will be massive opposition to it from local people.

    You have to agree to American dominated rules in order to get increased access to US market. It's basically giving up long term sovereignty for short term gain.

    IP protection will ensure these smaller countries will never have their own brands as US multinationals will sue them including their government for not protecting the IP of American MNC.

    China will never join the TPP. Otherwise China will never catch up technologically because Chinese companies will have enormous barriers to entry imposed on them.

    In the long term, this is great news for China because Chinese companies will face less competition.

    Developing countries that follow strict Western IP rules will never get their own companies. It's very difficult to skip the reverse engineering process to get the knowledge base and go straight to innovation without having that technological base.

    China knows what the TPP is all about.
    China doesn't want restrictions imposed on its companies from developing and eventually challenging US corporations.

    Quoted from Chinese comments :)
  8. Novation

    Novation Someone you used to know

    After TPP is FTA between 28 TPP countries, that is a home-run of everyone but China.
  9. Sax

    Sax Well-Known Member

    Nope, TPP make the living cost get higher bcz pple can't buy cheap products from CN anymore, but VN-US will be the winner in TPP coz VN will get more investments.

    maybe JP will shift its auto assembly plants from Thailand to VN ,too, and thats enough for us :)
  10. Novation

    Novation Someone you used to know

    i am not looking for that ideal, i don't think JP investments is good for VN. we should looking for more partners from the other side of the beach not in this side, the best solution for East Sea is more and more US Powers in South East Asia, only US can stop and balance Chinese army, so why we should looking for JP instead of US. Microsoft factory is in here, Dell factory is in here, BP is in here, we need more and more US company not JP.
  11. Sax

    Sax Well-Known Member

    True, when joining the TPP, we must focust on developing high tech industry coz our agriculture sector will face at much fiercer competition from US' one.( US chicken export to VN is much cheaper than VN chicken).

    IMHO, JP auto industry shifting to VN may create more stable jobs for VNese than IT companies like Microsoft :)
  12. Sax

    Sax Well-Known Member

    John Kerry in Singapore to boost Pacific trade agreement
    SINGAPORE -- U.S. Secretary of State John Kerry is in Singapore to talk up an Asia trade agreement that has hit snags in final negotiations.

    Kerry arrived in the Southeast Asian city-state Tuesday and is to give a speech highlighting the benefits of the Trans-Pacific Partnership. He will then travel to Malaysia for a regional security forum at which China's growing assertiveness in the South China Sea will likely be a major focus.

    In Singapore, Kerry will stress the importance of trade in the Obama administration's pivot to Asia and the role the TPP can play in it. The speech comes just days after Pacific Rim trade ministers were unable to reach agreement on the deal, which would cover nearly 40 percent of the global economy.

    Play Video
    Kerry talks challenges in East Asia

    The Obama administration has said the pact would boost U.S. economic growth and help keep high-quality jobs in the country by increasing exports. It is a central element of Obama's efforts to boost U.S. influence in Asia and to serve as an economic counterweight to China.

    The negotiations, which failed Thursday at the talks in Hawaii, are aimed at erasing most tariffs and other barriers to trade and investment among participants. It would also clarify and standardize trade rules, making it easier for companies to sell goods and services in the Pacific Rim. The talks have addressed tariffs on autos, rice and dairy products, as well as intellectual property protections for pharmaceuticals.

    But critics have complained that the deal is being negotiated in secret and that it favors multinational corporations over workers and consumers.

    The agreement was proposed by Chile, New Zealand and Singapore in 2002, but Washington has taken the lead in promoting it since joining the talks in 2008. Participants include the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

    Play Video
    Paul Ryan: “Very important” to pass trade deals

    China, the world's second largest economy after the U.S., is not part of the talks. But there's potential it could join the pact later. On its own, Beijing has been negotiating a separate agreement with many of the same nations that's called the Regional Comprehensive Economic Partnership.

    From Singapore, Kerry will travel to Kuala Lumpur to participate in the Association of Southeast Asian Nations annual meeting.

    As they have for several years, tensions between China and its smaller neighbors over maritime disputes are expected to be a major topic of discussion. The U.S. takes no position in the disputes but wants them settled amicably and says it has a national security interest in maintaining stability in the region.

    China and five other claimants have competing claims to all or part of the South China Sea, home to rich fishing grounds, potentially significant mineral reserves and some of the world's most crucial shipping lanes. China has been on an island-building spree in the disputed waters that has rattled its neighbors and strained relations between Washington and Beijing.

    U.S. officials say the meeting in Kuala Lumpur will be an opportunity for the Chinese to hear from many of the 10 ASEAN members, as well as Kerry, about the need for restraint.

    "There's a broad consensus on the need to tap the brakes, so to speak, when it comes to exploitation or reclamation of the land features in the South China Sea," one official said. "This is a forum where the Chinese will hear for themselves what their neighbors and their foreign partners think about both their activities and about their actions."

    Last week, China's Defense Ministry accused the U.S. of militarizing the South China Sea as Beijing makes increasingly bold moves to assert its claim to virtually all of the sea's waters, islands and reefs.

    The rejoinder was prompted by comments critical of the island building by the head of the U.S. Pacific Command, who warned that such work undermines international norms that have long governed the global economy and political order.

    The Defense Ministry said U.S. close-in reconnaissance of Chinese armed forces, frequent military exercises and strengthened military alliances with the Philippines and other nations are raising tensions and creating risks of incidents in the air and at sea.
  13. lifecare

    lifecare Active Member

    I don't believe at ones, TPP, AFTA or WTO. All things defence on our hands. If we worked hard and have clean government, we will become rich and happy. If we lazy working and got "smell" government, our country will went on the hell.
    For meter which said by TONY: "China will collapse soon, in 25 years, I guess.
    Vietnam should prepare for that moment to get back our lands stolen by China." take care, VN will beaten because Vietnam placed under China feet, so that when CHina collapsed it will heavily upon VN.
  14. Sax

    Sax Well-Known Member

    All things defence (u mean depend ,right )on our hands. ???.......
    So, what do we have now ??? a big bad debt with Bureaucratic Government that make those corrupted crooks get richer while the poor r getting poorer , our poor pple of course work so hard, but many of them r still so poor just bcz of the fouls our political system

    And why US invite a poor communist nation like VN to join the TPP ?? its just bcz they dont want VN to be controlled by CN in the near future and it will make situation in East sea (SCS) get worse for US. TPP of course is not all roses (TPP ko pai toàn màu hồng). As I said, we may lose the agriculture sector , it also mean many poor farmers may lose their jobs, but TPP may help VN to get rid of the heavy influence of China on our nation :)
  15. lifecare

    lifecare Active Member

    Thanks Sax, yes, depend.
    Of couse, TPP is not all rose flowers, even rose has thorns. About farmer, they are always miserable victims. Thay were cheated by many reducing poor programs. What animal or plant can development? In the pass ,dairy cows, pig, coffee, tea, rubber tree... just time is macadamia tree. How to warn them?
    For TPP, if we have not strong enough Government, we will fall in to bad effect of other nation than China. What is different between dependent on China and other nation?.
    So that we must have to stand on our foot and decide by our hand.
    Sax thích bài này.
  16. Sax

    Sax Well-Known Member

    haizz, poor our farmers, but we have No choice, in developed nation like USA, only abt 5% of its pplation r farmers while its abt 40-50 % VNese r farmers and using very low farming technology that make the price of VN agriculture products always very high but low quality. VN farming products can not compete with high tech farming product from USA-New Zealand-Aussie.

    So, first step, we will have to depend of foreign investment to improve the quality of our products. Second step, we need to learn and master those high tech to make our own high quality products that can compete with the products from other TPP nations.

    Vietnam control the most important part of Eas VN sea (SCS) thats why USA need VN for the purpose to contain China's global ambitious . So, we have to protect our islands there at all cost to ensure that USA will still need us to contain China and keep pouring its support to VN. We also need to find out the way to become stronger before US see no more benefit from VN and abandon us like what US did to South VN Govt. .
  17. Sax

    Sax Well-Known Member

    Kerry confident of concluding TPP trade pact this year
    Ngoại trưởng Mỹ tin đàm phán TPP kết thúc năm nay

    U.S. Secretary of State John Kerry expressed confidence on Friday that an ambitious Pacific trade pact could be completed this year and said a recent nuclear deal with Iran proved hurdles in international agreements could be overcome.

    Kerry said many challenges remained in thrashing out a Trans-Pacific Partnership (TPP), particularly on issues of autos and dairy, but the United States would do everything in its power to make it happen.

    "There are a few remaining issues ... which I am confident will be resolved," Kerry told a news joint conference with Vietnamese Foreign Minister Pham Binh Minh in Hanoi.

    "We are hoping very much that over the course of the next couple of months, before the end of the year, TPP can be completed," he said.

    The U.S.-inspired TPP is a "mega regional" accord set to cover 12 countries with a combined gross domestic product of $28 trillion, among them Australia and Japan.

    Kerry likened the TPP talks to a deal negotiated over 18 months between Iran and six other countries to lift sanctions in return for curbs on a nuclear program Iran insists is peaceful.

    "It's very complicated. I will tell you that having just negotiated with Iran ... there were six of us all with expertise, all with our own opinions and we had to come together in order to agree on what we would then negotiate with Iran.

    "This is the same thing," he said of the TPP.

    The TPP would connect the 12 economies by cutting trade barriers and harmonizing standards covering two-fifths of the world economy and a third of global trade.

    TPP trade ministers discussing the pact, which would stretch from Japan to Chile, have said an agreement is within reach, despite the failure last week to settle differences at talks in Hawaii.

    Kerry met Vietnamese President Truong Tan Sang and said it was crucial to iron out remaining issues.

    "One of the very important things now is for us to be able to stay where we are on the TPP negotiations, not to slide backwards, but to finish that job in which Vietnam is very much an important contributor," Kerry said.

    Vietnam's export-dominated economy could be among the biggest beneficiaries of the TPP because of its farm and fisheries resources, cheap labor and growing manufacturing sector, especially in textiles, footwear, telephones and televisions. Among its investors are Samsung, LG and Microsoft.

    Vietnam has some lingering concerns on TPP, including issues related to labor, which Kerry said could be settled.

    (Writing by Martin Petty; Editing by Robert Birsel)

  18. Sax

    Sax Well-Known Member

    China Lowers Value of Its Currency as Economic Slowdown Raises Concerns

    ( Trung Quốc Giảm Giá trị của tiền tệ 2% làm Tăng Lo ngại)

    HONG KONG — As China contends with an economic slowdown and a stock market slump, authorities on Tuesday sharply devalued the country’s currency, a move that could raise geopolitical tensions and weigh on growth elsewhere.

    The central bank set the official value of its currency nearly 2 percent weaker against the dollar. The devaluation is the largest since China’s modern exchange-rate regime was introduced at the start of 1994.

    China’s abrupt devaluation is the clearest sign yet of mounting concern in Beijing that the country could fall short of its goal of roughly 7 percent economic growth this year. Growth is faltering despite heavy pressure on state-owned banks to lend money readily to companies willing to invest in new factories and equipment, and despite a stepped-up tempo of government spending on high-speed rail lines and other infrastructure.

    A steep drop in the Shanghai and Shenzhen stock markets in late June and early July, only halted by aggressive government actions, appears to have dented consumer demand within China. Automakers, typically the earliest bellwethers of lower demand, have been announcing drops in sales last month; Ford China, for example, said last Friday that its sales had declined 6 percent last month compared with July of last year.

    China’s devaluation represents a difficult dilemma for the Obama administration. The Treasury has tried to use quiet diplomacy in recent years to encourage China to liberalize its currency policies, while blocking efforts in Congress to punish China for massive intervention in currency markets over the past decade to slow the rise of the renminbi. Many in Congress have long accused China of unfairly building up its manufacturing sector at the expense of American jobs by undervaluing the renminbi, and the Chinese devaluation could fan those criticisms.

    In a seeming nod to such concerns, the central bank said that it would begin to use the market closing, not the previous morning’s official setting, to calculate the renminbi’s official daily fixing against the dollar. But China’s economic weakness now means that further liberalization of the currency could mean a weaker renminbi, not a stronger one. That, in turn, would make Chinese goods even more competitive in the United States and Europe.

    The Chinese currency has been a global point of contention for nearly a decade. China officially ended the renminbi’s fixed peg to the dollar in 2005. Since then, it has risen in two long, slow climbs. The first was from July 2005 until August 2008, when it was interrupted by the global financial crisis. The renminbi then resumed its rise from June 2010 until early last year, when it dipped slightly, then stabilized.

    The overall increase since 2005 has been more than 25 percent against the dollar. It has strengthened even more against other major currencies, like the euro and the yen.

    But the Chinese currency is not freely tradable, and its movements are tightly controlled by the government.

    Each morning in Shanghai, China’s central bank sets a midpoint for the renminbi’s value against the dollar and other major currencies. This can be as much as 2 percent higher or lower than the previous day’s value, although the change is almost always a tiny fraction of 1 percent.

    But on Tuesday, the central bank fixed the value of the renminbi at 6.2298 per dollar, down 1.9 percent from Monday’s official fixing. In a statement on its website, the central bank said it was seeking “to perfect” the renminbi’s exchange rate against the dollar.

    The bank, the People’s Bank of China, said it was reacting to trends in the market, where traders in recent months had been betting on a weaker renminbi. In trading in Asia on Tuesday morning, the renminibi weakened further to around 6.30 per dollar. The central bank also said it would seek to prevent what it described as “abnormal” capital flows. Weaker economic growth has prompted sizable outflows from China in recent months, which have likely been exacerbated by the country’s stock market volatility.
  19. Sax

    Sax Well-Known Member

    China hedge funds lose $10 billion after market collapse
    (Quỹ đầu cơ Trung Quốc mất $ 10 tỷ đồng sau khi sự sụp đổ thị trường ) staff | @CNBC

    3 Hours

    COMMENTSShanghai Composite posted a fall of over 14 percent for the month, new data shows.

    The HFRI Index, which tracks hedge funds that predominantly invest in China, shed 7.7 percent last month after Chinese stocks suffered their sharpest daily percentage decline since 2007, ending down 8.5 percent in a single day.

    ChinaFotoPress | Getty Images
    An investor watches the electronic board at a stock exchange hall in Fuyang, China.
    As a result of these performance losses, total capital invested in Asian hedge funds tanked $10 billion in July after climbing to record highs of $126.3 billion in the first half of the year, according to data from Hedge Fund Research (HFR) published Thursday.

    Other data released from intelligence firm eVestment this week said China-focused hedge funds lost as much as 10 percent in July, but despite this precipitous one-month decline, year-to-date returns of 8.5 percent are "still among the industry's best", the group said.

    China's benchmark index saw its biggest monthly drop since August 2009 in July, as the government struggled to rekindle investor interest amid a $3.5 trillion rout.

    China's 'big bang' dents global markets

    A number of firms were suspended from trading, planned Initial Public Offerings (IPOs) were delayed and government restrictions on short selling and the use of leverage were put in place after the sharp surge in volatility seen in Chinese markets.

    In a note published last week, Goldman Sachs estimated the Chinese government spent in the region of 900 billion renminbi ($140 billion) to support the stock market in June and July, equivalent to around 2 percent of total market capitalization.

    "Chinese financial markets have come under intense pressure, encompassing not only directional losses, but also liquidity, structural and political pressure, as Chinese equities have posted the sharpest declines since 2007," said president of HFR, Kenneth Heinz in a statement accompanying the figures Thursday.
  20. Sax

    Sax Well-Known Member

    Faber: Yuan devaluation is completely meaningless
    Leslie Shaffer | @LeslieShaffer1
    1 Hour

    COMMENTSyuan to weaken a total of around 3 percent against the U.S. dollar on Tuesday, Wednesday and Thursday amid a shift toward a "managed float" regime, the People's Bank of China (PBOC) set Friday's fixing at a slightly stronger level. That may signal that the string of aggressively weaker fixings is finished for now.

    "The 2 or 3 percent devaluation of the yuan [against the U.S. dollar] is completely meaningless," Faber said. "The Chinese yuan has appreciated by 80 percent over the past two years against the yen."

    Read MoreWelcome to China's new 'managed float' regime

    Additionally, in contrast to the yuan's relative strength, Brazil's real has shed around 60 percent against the U.S. dollar since 2011, whileTurkey's lira has lost 50 percent and all other Asian currencies, with the exception of the Hong Kong dollar, have all been weak over the past year, he noted.

    "Don't forget the People's Bank of China has said that they will have now a currency that will reflect more market forces. And that means that if the market forces are against the currency, then the currency will go down," Faber added.

    Faber sees one major casualty if the yuan continues to weaken: theHong Kong dollar, which is pegged to the U.S. dollar.

    "If the yuan weakens by 10 percent, what happens to the Hong Kong dollar? That's the big question," Faber said. "The Hong Kong dollar may depeg, because then Hong Kong becomes massively uncompetitive," he said, noting that all other Asian currencies have weakened.

    "The Hong Kong dollar is a good short," Faber added, although he noted he doesn't currently have a short position. "It's quite likely [to depeg]. If you are bearish about the yuan - and I'm quite negative about the yuan."

    To be sure, predictions that Hong Kong's dollar peg would snap have dogged the currency since the system was set up in 1983. The Hong Kong Monetary Authority (HKMA) intervenes periodically when the currency strays from its level of 7.75-7.85 against the U.S. dollar.

    Read MoreChina's yuan depreciation could hit domestic firms

    One factor that may drive bigger declines in the yuan is that the currency is also reflecting weakness in the Chinese economy, Faber noted.

    "It's quite obvious even to the greatest optimist about China that the economy is not doing well at the present time," he said. "In July, car sales were down around 7 percent and luxury goods manufacturers all complain. Commodity markets, industrial commodities have collapsed over the last two to three years."

    China released a raft of disappointing economic data for July on Wednesday, with industrial output growing an annualized 6.0 percent for the month, well below expectations for 6.6 percent from a Reuters poll and down from 6.8 percent in June.

    "The Chinese economy is much weaker than the consensus believes. I maintained a year ago that if China grows by 4 percent they'd be lucky," Faber said. "Right now, the economy is probably not growing at all, maybe 2 percent."

    That contrasts with official data showing the Chinese economy grew at 7.0 percent on year in the second quarter, a figure that was in line with the previous quarter and slightly better than analysts' forecasts.

    But Faber noted that figure was from the government, adding: "Have you ever seen a government that doesn't lie? I haven't."

    Yuan mất giá là hoàn toàn vô nghĩa, vì KT TQ chưa đủ lớn để gây ảnh hưởng mạnh tới KT TG (chỉ đủ để dọa VN).
    Tony thích bài này.

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