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This post was edited by abramicus at 2016-2-2 17:15|
sfphoto Post time: 2016-2-1 23:41
China needs to develop its own consumer goods companies such as UNIQLO with their own brands and ch ...
All this is fine and dandy, but they do not require China to keep the Yuan overvalued, such that all products, of low or high tech, suffer from a pricing disadvantage against Japanese products. If a product can sell in China for 200 Yuans with a 10% profit margin, it does not matter how much it is sold in dollars for the manufacturer, as long as the exchange rate allows him to get 200 Yuans for the sale of that product abroad, unless he imports a big portion of his materials from abroad. If it is sold for $30 while a similar product by Japan sells for $25, then it will not be bought, and whether the workers in China are highly skilled or low-skilled, they all do not get paid and could get fired instead. Let us not confuse the problem caused by the PBOC's foolish overvaluation of the Yuan with gearing up China for high tech manufacturing. Even Japan, that is high tech, NEEDS TO DEVALUE THE JAPANESE YEN to beat China's low tech products, and in this, the BOJ is getting all the help it needs from the PBOC which has been OVERVALUING THE YUAN INSTEAD, at the expense of the high tech industries that it pretends to want to raise up, but is actually undercutting by forcing their products to be overpriced in dollars and yens abroad, and also overpriced in yuans at home. High tech emphasis never needed the PBOC's outrageous overvaluation of the Yuan which is killing off China's manufacturing sector completely.