October 29, 2010

Next currency war in China ?

Is currency war in China?

Since after 2008, almost all over the world was implicated by financial crisis, China is no exception.

Most people thought that China has a promising future, but I don't think so.

China has about 2.6 trillion foreign exchange reserves which has continued shrinking because of the continuous depreciation of dollar.

The government of Obama forced appreciation of the renminbi, which further made the foreign exchange reserves shrank.

Thirdly, a black hand has entered into China several years ago.

A huge number of hot money injected into China's real estate, stock market, future market, and other finance market, therefore China looks like a investment 'hot area'. Unluckily, it may be a long premeditated conspiracy. Is it a real conspiracy? Is currency war in China? Even if it is a conspiracy, what should we do? ... best wishes!

- 2 comments by 1 or more people Not publicly viewable

  1. My friend i will agree with you…. But i do not think that the China¢s problem of future perspective is only financial. Mainly it is social.

    The working conditions for the employees are awful. Managers do not take into consideration people needs. This will have as a result strikes and people¢s reaction. Already that has begun.

    The economic model of China¢s business is based in low salaries in order to have cheap products and services. Although this has short term profits, it is not sustainable. You must think of your people if you want sustainability. We learnt that in MBE.

    There other sustainable ways to decrease cost. For example improving processes is one way. In that ways you not only decrease your cost but also you increase quality.
    Joseph Juran says “Higher quality cost less”, Philip Crosby says “Zero defects to reduce the cost”………

    To sum up It is not only financial problem. It is mainly problem of sustainability…..

    30 Oct 2010, 14:04

  2. Thank you my friend, I agree with you, it is not only a financial problem. It is indeed a social problem. Maybe… it is a political problem.

    Some conditions you described like low salaries of employees, low price of products, little consideration of employees, even strikes have begun… These conditions indeed exist in China. Most people have realized these serious problems several years ago, but it is very hard and complex to resolve it.

    Your advices about improving processes and decreasing costs are very good. Improving processes and decreasing costs were already been doing in recent years, but why still cannot see good results…? Why cannot stop bad situations…? I think…one of the reasons is that China is too large, government called industrial upgrading just less than two years , so it have not seen obvious good results. The best conditions and the worst sufferings are both exiting in China today. But I think…maybe …it is not the root causes. Because improving processes and decreasing costs already implemented in some industries and companies, the bad situations not only did not get better but is more serious. Why…? What is the root causes… ??? This question inspired me with another idea on ‘China need to accelerate the pace of political reform’...

    Thank you my friend. Thank you for your advices. It is very good.

    31 Oct 2010, 19:20

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