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Prediction of movement of Rmb Vs US$, Euro and GPD! [Copy link] 中文

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Post time 2006-10-14 11:39:17 |Display all floors
Ms. Amyamy wanted me to do some predictions.

So here goes......
(using some common sense thinking)

Well....today is the 14th October 2006
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Every year, Chinese exporters does best business during September, October, November period!
and April, May, June period!

Why?

Oh! that's because July-August is European Summer holiday, Japan has Golden Week holiday. Traditionally because of this European and Japanese practises, export orders picks up and this causes a business improvement.

The year end period is caused by the annual Christmas, Chinese New Year holidays. Year end also mean salary bonuses! This will cause another increase in business!
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US$ market movement prediction
(As US$ demand continues to increase due to increase in inflation, value of world trade; more dollars can be absorbed by the International community)

Rmb WOULD PROBABLY REMAIN STABLE UNTIL JANUARY 2007.

This is to protect Chinese Exporters whose margins are traditionally slim at 3 - 5% net. Increase in value of Rmb will wipe out their profits.

In FEBRUARY 2007 to MARCH 2007, Rmb CAN SEE SOME RISES.

Chinese government intends to ENCOURAGE CHINESE BUSINESS TO UPSCALE. Rmb increase in value would solve two main national agenda, (1) Encourage change in business mix, (2) Improve the buying power of the working and rural class workers.

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The EURO and GPD will also rise in MARCH 2007 against the US$ due to fact of possible need for interest rate to rise in MARCH 2007 ( pressure of RMB increase in valuation! )





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[ Last edited by greendragon at 2006-10-16 12:03 PM ]

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Post time 2006-10-15 15:44:45 |Display all floors

Somebody ask me a question recently!

Wouldn't RMB revaluation benefit the Amerikan REgime?

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Green DRagon comments...

(1) The GDP and Asset Value will rise more than offset the fall in Reserves holdings.
(2) The increase RMB value will reduce cost of commodities, and improve buying power of the workers. Of Course farmers needs to have bigger plot, and more rural workers needed to work in PROCESSING PLANTS. eg. instead of just POLISHING RICE, DO MORE VALUE ADDING - flour making, noodle making, ...maybe even pre packaged meals!
(3) The increase in RMB will force "low margin" business to upgrade, change business.
(4) The increase in RMB should increase BUYING POWER of the Chinese consumer, thereby increasing range of products that can be purchased.
(5) RMB increased will make more "Energy intensive processes" affordable to the masses!


But, increase must be gradual and with eye to resource availability, urbanization rate etc. etc. etc.



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Post time 2006-10-15 15:58:46 |Display all floors

The Rmb increase must not be too fast!

People need time to adjust!

and we can start to do trade in RMB with some poorer nations which have BANK OF CHINA or other major RMB trading banks from the NEW MIDDLE KINGDOM.

Slowly, step by step on fast river, feeling the slippery rocks!
(Good advice by our past leaders)


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Post time 2006-10-17 11:45:43 |Display all floors
No I didn't ask for prediction. I only asked if you could share your observation.
Vision without action is illusion---Y.J.

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Post time 2006-10-17 19:51:09 |Display all floors

Reply #4 amyamy's post

Actually the Amerikan unit will have to depreciate at least in relation with the US$ holdings belonging to China!

The rest of the world, the Amerikan REgime has enough leverage to prevent en masse dumping of the unit!

China should take the opportunity to

(1) Increase its trade in depth and width
(2) to start to secure certain "financially bullied" states such as North Korea, Myanmar, Vietnam, Cambodia, Laos, Central Asian states and Persian to use Rmb or maybe even the Persian units!
(3) to expand the banking coverage of the big 4 of China and small 6 in Greater China, ie. UOB, BEA, DBS, OCBC, Public, Maybank!


As usual, i do believe another 1 -2% rise in February or March 2007 is expected!
We have to reduce commodity cost to China's workers step by step!

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Post time 2006-10-17 21:25:55 |Display all floors
Our FX reserve has exceeded 1 trilion USD, which forces RMB to reval sooner or latter. however currently people right now are far more concerned about American's domestic economy due to the slumping housing sector which clouds its economic outlook. So economists in the Fed are waiting for enough economic data before taking further actions, which justified a pause of benchmark rate change. The temporary suspension of such a series of rate rise took some pressure off China, since the inflation expectation in US is still uncertain. However, the resilience of bullish sentiment which i think is quite likely will once again impose more pressure on RMB to appreciate.

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Post time 2006-10-21 10:33:49 |Display all floors

Reply #6 marktomarket's post

With the rapid upgrade of the Chinese economy!
The Rmb7.9 = US$1 is rather ridiculous.

If China is like India, Indonesia or the many China state run Institution of the past, where we have many unproductive workers....then the rate is advantageous. But it the rapidly improving technology of manufacturing and now the increasing strenght of the real estate, services....

It is an advantage to secure a lower commodity cost for the Chinese citizen via increase in the value of the RMB and strengthened Advance manufacturing business!

If the GDP is supposed to be US$2,400 at today's exchange rates by 2010....
I reckon, we need something Rmb6 = US$1 or US$3,600 and urbanization of approximately 50%!


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