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.

- 6 comments by 1 or more people Not publicly viewable

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  1. Apollo, I do not completely agree with you. I do think some points are very interesting but I think matters are not that simple and I really don`t think there`s a conection in there. However I agree that the so called “western countries” just like any other country (Brazil included!) are not altruists and nice and decide mainly thinking about self-interest.
    But I`m very glad you wrote that post because it`s very interesting to hear the real opinion about real people, not gone through the press and you are surely a very smart colleague.

    Congratulations about talking about such a sensible matter in such a bold way.


    21 Oct 2008, 21:04

  2. Language is okay but the view is a bit extreme in my opinion

    1. The value of RMB should really reflect how much it is valued by the market, for a long time the China govt have suppressed the appreciation of RMB in order drive its strong export economy. It should be no surprise to anyone that it will appreciate one day. Certainly it has nothing (almost nothing) to do with factories closing which is caused by failure to cope with increasing labour cost and probably poor management.

    2. Last time I checked China is one of the largest oil importer today, how can China claim that the increasing oil price is caused by Western countries trying to increase oil reserve! Why should she be entitled to more oil than everyone else? (I am not commenting on US invasion of Iraq)

    3. The focus of the Western media in Tibet controversy during pre-Olympic period was China’s ignorance for human rights. We shouldn’t try to make unsupported claims about its linkages with financial crisis

    It’s interesting to talk about it. I apologise if my language offends. Louis

    22 Oct 2008, 00:59

  3. Apollo

    That’s ok Louis, everyone has different opinion, very nice to have you comment.
    I was standing on the side of China, so the opinion was coming from this degree. Probably it is kind of self-interested as what Francisco said. So let me defend my proposition with the suggestion coming out from my role.

    I want to say according to your points.
    1. I agree that increase in labour cost and poor management, are probably one of the reasons for factories getting closed. However, the reflection of of RMB during the stage was surely an unavoidable factor, it certainly has something to do with US & EU economic down turn, they were about to take some actions about Chinese exports. By the way, we do have more and more enterprises which are multinational, and products are used in Africa, even in EU and US, that’s what I truly saw from local electrical store. The brand such as Haier, Kongka… as they have good management model and able to cope with the reflection of RMB.

    2. The info of Western countries trying to increase the oil reserve is the fact that I read from the news several months ago. China needs huge amount of oil in order to develop, that’s also true. So I can’t stop associating that they are trying to increase the oil price to add up Chinese cost of development.

    3. China is not doing so well on the human rights point as some developed countries I agree. However, for such a huge country with such a population, it is really difficult to manage, we have to have some strict law. Nowadays, all of the Chinese ( expect individual ones ) appreciate what the government’s performing, they are going on the right track, life is getting better, so no one is complaining about the current policies.

    In turns of Tibet, I has been told that “ Tibet independener” used force first to destroy buildings of Chinese government, to hurt people of Han nation, thus Chinese government had to sent military into Tibet to suppress those who want to slip our motherland. News maybe wrong caused by government’s point of view. However, no matter what situation was, the Chinese government was trying to safeguard unity of China in order to have stable economic development, to raise people’s standard of living. The blood type of behavior, some of it, was misused by some media during the stage, say BBC. Some photos of beating up the monks by police from Nepal, it was said to be done by Chinese military.

    Anyway, that’s just a discussion, thanks very much Louis, to share your opinion with me. ^^

    22 Oct 2008, 21:26

  4. Hi, Louis. I think the issue of Tibet is a historical question, and many press, especially the western’s, often have bias on it. So what you get from TV or other sources, are all quite a part of it. Human right is one of the most important issue that the Chinese government focusd on, and during these 2 or 3 decades, I think most Chinese people get advantage from it. Tibet be part of China since thousands of years ago, no matter what ethnic they are, they are all Chinese. And the government treat them as other Chinese people. One of my best friends had been to Tibet last year, he spent half a month there to do some social investigation. And he told me that most people there were quite happy. They definitely led a life they can never thought several years ago. And they absolutely love to be part of China, so they can enjoy all the advantages Chinese government gave them. All the “Tibet issue” is just a minority of people, take use of people’s pure belief, to search for a self-interest. And this also meet some western government’s needs~
    Anyway, maybe as a Chinese, I judge these things in different way as you guys. But I really think in such a big country, Chinese government had done the best for what it can do.

    27 Oct 2008, 23:06

  5. Apollo

    Thanks very much for the opinions from all of you. ^^

    29 Oct 2008, 17:10

  6. fishing tackle

    Intersteing outlooks thanx

    08 Jan 2009, 13:36

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