All entries for Tuesday 21 October 2008

October 21, 2008

Thoughts about Credit Crunch

This article is just my personal point of view with no offense to anyone!!

I was reading a magazine talking about different country's attitude with Chinese Olympic Game 2008.

During March, April and May, some western countries intensively opposed the Olympic Games held in China and supported the independence of Tibet, arising a series of problems to China.

During that time the western countries' diplomatic relationship with China is getting worse, Chinese citizens' emotions to the event was getting increasingly intensive. E.g. held protest march, refused shopping in French Carrefour supermarket, etc. To be a Chinese, I attended the protest march on 19th April in London. We called that day " The Red 419".

Red 419

Red 419

For more photos about Red 419 in London, you can get on to my facebook, just search for Apollo Zhao.

I am not gonna talk about this in detail. But just combine with the Friday's lecture about credit crunch, I have some opinions relate to this.

During the period, why the westerns were so united? For example, Germany, France normally would not to take the risk to offend the Eastern giant ¡ª China. During the War of Iraq, they use to stand by the side of China, opposing US using force against Iraq. France, in order to keep good relationship with China, 10 years ago, it stopped arms trading with Taiwan which caused the direct economic losses for several billions. So, we have to think about why this time they were just openly hostile to China? Is it really because of Tibet or Olympic games which were completely irrelevant to them?

With the issue of Tibet, the westerns knew that no matter how they oppose it, the Chinese government would not to have concession. About the issue of Olympics, they were also clear that even if no leaders of the western countries attended the opening ceremony, it just embarrassed the Chinese but no real impact at all. Thus, Tibet was an excuse, Olympic Game was also an excuse. So what do they really want from us?

The westerns have been facing the economic recession, they needed a strong country to pay the bill for this recession. It goes without saying, they thought about China simultaneously. Why do I say like this, just have a look at their actions.

* Depreciation of USD.

Because of the depreciation of USD and revaluation of Chinese currency (RMB), the 1.6 trillion foreign exchange reserves of China have had a decrease of 300 billion and it was still decreasing. What more, the revaluation of RMB directly led to the increasing cost of Chinese exports which hit heavily on many Chinese enterprises. To their benefit, if the Chinese enterprises were getting closed, their manufacturing industry could be recovered.

* Collapsing Chinese economy through high oil prices.

The rapid development of China needs to import large amount of crude oil, while the western countries keep increasing their oil reserves which caused continue increasing of oil price in order to add the cost of Chinese economic development. And that was why US would strike Iraq: controlling oil is controlling economic lifeline.

* To promote Chinese bubble-economy.

Hence from where we can see, Tibet and Olympic games were only two hostages, their real purpose were neither Tibet nor Olympics, but to blackmail China into paying the bill of their financial crisis. If China refused, then just keep send you problem and making you mess. If accept, ok, sit down and let's have a talk!

Apologize for the language probably too intensive.

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