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Chinese Premier: "Protectionism Is Clearly Reasserting Itself"
At the start of today's Chinese National People's Congress, Chinese premier Wen Jiabao poured water over expectations that the renminbi may appreciate any time soon, and also indicated that China will "continue its expansionary fiscal policy" by maintaining appropriately loose monetary policy (translation: it is now next to impossible for the Chinese supertanker to steer off direct collision course with the bubble iceberg). He also noted that "The foundation for global economic recovery remains weak;
financial risks have not been completely eliminated" and, most disturbingly, said that "trade protectionism is clearly reasserting itself." The ramification for US trade policy as a result of this admonition will likely continue to be made felt over the next 12 months. Yet in an odd moment of clarity, when discussing the domestic economy, Wen noted "latent risks in the banking and public finance sectors among the key challenges to economic growth, alongside now-standard warnings about industrial overcapacity and shortcomings in income distribution." As for the biggest question of how China will approach the USD-CNY relationship, Wen provided little clarity besides promising to "continue to improve the mechanism for setting the (yuan) exchange rate and keep it basically stable at a reasonable and balance level." As Market News notes, that wording, which is frequently trotted out in government statements, is identical to that contained in last year's report.
Other disclosures from Wen:
- The government is targetting growth of 8% this year;
- Consumer price inflation will be kept at around 8%;
- The government is targeting new loans of CNY7.5 trillion, down from 2009's record CNY9.59 trillion: he also pointed out that credit policy will be adjusted to make sure money flows to those who should be receiving it, i.e., farmers and small businesses, and restricted to those that shouldn't, including energy-intensive industries and those experiencing overcapacity;
- M2 growth in 2010 is targeted at 17%;
Also of note, is a report prepared by the Ministry of Finance which said that the fiscal deficit is planned to be CNY1.05 trillion, or 2.08% of GDP, compared to the 2009 deficit of 2.2% of GDP.
And to the benefit of Chinese skeptics, Wen warned that government will "crack down on excessive property speculation." Just how this will be accomplised in a largely accomodative monetary environment remains to be seen.
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Hands down winner of the "Talking out both sides of your face" award.
after arms sale to tw and meeting with HH Dalai Lama, expecting RMB reval is at minimum naive at maximum stupid...
Wen failed to mention that every economic statistic produced by the chinese government is a total fantasy.
Did he really have to??
Of course, CNBC has it all over Chinese productivity claims???
Sorry, had to edit it for accuracy and consistency.
A most appropriate and accurate modification.
Fuck em. Buy USA, Mexico, Vietnam, Malaysia, Taiwan, anything but from those clowns. They're so good at faking they faked a 5 year old singing girl @ the olympics.
faked a 5 year old singing girl!!!
I'll take the singing kid over Goldman,,,,Financial fucking terrorists..
hey BlackBeard - check your underwear - where's it made?
China + USA = biggest link in the global 'reach around' chain.
Expect the most noise from the biggest boyz who don't get stroked like they want.
The "shortcomings in income distribution," means the poor should be even more worst off and rich should be better paid.
and they call themselves communists. shocked.
Never mind the Yuan policy the real issue for China is the one-child policy and resulting gender imbalances, which has led to:
- Scarcity of wives in rural areas
- Abductions and trafficking of women
- Illegal marriages and forced prostitution
and, one would think, lower rate of population growth (and higher status for women) down the road.
Indeed, but further, the 'Aging Crisis' ala Boomers is a sunami that will hit all developing and particularly western developed societies like a ton of bricks... or then again maybe healthcare will be the new industry to drive global growth?
'Got gold bitches?' may well become, 'got healthcare stocks bitches?'!!!
How will excessive property speculation be taken care of?
Execution how else? Quite a powerful deterrant!
The currency peg is working fabulously. What idiot would change that. Just look at the increased value of those $ reserves in the last few mos. Why we can cycle some of the excess return into gold for a little more insurance and well lets keep all those projects going we got alot of guys w/out girls to keep working. They need to pay the working girls for their weekly-daily fix to keep their psyches on an even keel or we got big problems
Don't forget the chi-kung or the tai-chi we need to be very focused
Protectionism or endless welfare for the unemployed. You may choose only one.
Tommorrow the BLS will post lower U3 and higher U6. Our pos sociopathic govt can pretend they don't exist. Make them desparate and crime will soar...
Protectionism... Fuck china..
Nikki...
I'll take "financial risks have not been completely eliminated" for $200, Alex.
“Latent risks in the banking and public finance sectors are increasing,” the premier said.
What is "out of control debt"?
Ah, another NPC meeting. Bull market in hookers, LV man purses, and Audi A8s.
..Think like a mandarin.. to curb property speculation is also to increase home ownership.
"The government is targetting growth of 8% this year;
Consumer price inflation will be kept at around 8%;
...
M2 growth in 2010 is targeted at 17%;"
So nominal growth is based on monetary inflation... Chinese money printing to save the world!
Hypocrisy, thy name is China.
+1 Seth.
They engineer their economic miracle purely on the back of an undervalued currency, which IS protectionism.
Now there are no jobs in other countries, the Chinese seem to think it's wrong they get upset.
Ironically, I have read that various Asian investors want to invest in companies and housing the US and UK, mainly to convert their Dollars into real assets. This is easy for them given the West's fairly free investment policies. How hard is it to open a business in China without paying off the party?
May they live in interesting times
It seems they have "re-imagined" a quote from Mao: power comes from a barrel of ink.
China may be facing a rude awakening of their own making. I was caught off-guard a couple of days ago when we were told that some of our suppliers in China attributed difficulty in getting us parts to a 'labor shortage'. They report that a noticeable percentage of the workforce went home for Chinese New Year and "didn't come back".
Of course, someone offered that they are no longer willing to work for X¢ a day, but this, coupled with an empty cupboard, tends to resolve itself in short order. It appears our suppliers have by now abandoned that theory as well. One of our planners did some digging and found that as more of the manufacturing base moves further inland, some of these workers may have been able to secure employment closer to home. Whatever the cause, it is more than the traditional 3-day hangover post Chinese New Year and, if unresolved, may serve as a precursor to some knocks in the export engine.
Awwww the mercantilists with their non-tariff
barriers are unhappy about the rise of so-called
"protectionism" in their only true market?
Awwww it sucks when the throat of the golden
goose has so many hands around it that you
can't squeeze just another year or two out
of it.
Awwww it will be a rude awakening when your
nation wakes up and realizes it has no friends
other than your only true market, and you are
putting that at risk - not at the government
level (which you own) but at the micro level
that is angry, annoyed, and has a long memory.
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