Aug 21 2007
Watch the currencies
As the debt mountain starts to subside under the impact of the higher interest rates from the Central banks we need to remember the huge yen carry trade.
All the time the dollar remained strong against the yen and dollar assets went up it made sense to many people to borrow yen at rock bottom rates, and buy dollar assets at better rates. Once the yen starts to rise against the dollar, if people think it will rise further, that game is over. People rush for cover to avoid currency losses.
The Chinese markets are so far little affected by all of this, owing to the strong official influence over their markets, and the huge surpluses they are generating day by day. At some point there has to be a slowdown in US demand for Chinese goods brought about by some combination of weaker dollar and less spending power in the US.
There is some buying now of high quality dollar bonds, as investors switch out of some of their lower quality instruments.
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John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
The rise of China’s export-led manufacturing industry should be of grave concern for us all. Under normal circumstances I would be in favour of free-trade, but the size of China, and its potential to dominate global export-markets creates a case for tariffs and limiting Chinas sphere of influence to asia.
The Chinese talk openly about ‘Smashing western pre-eminence’ in Africa and the wider world markets. In fact China has increased trade with Africa from 1billion dollars to 40billion dollars in just six years and their share of trade in percentage tears has trippled from 2% to 6% in just four years. China are deadly serious about exploiting the worlds export markets and are quite open about the fact that they prefer to eventually see
trade as a one-way street, out of China and not into China. People have too readily embraced Chinas desire to supply the world in the name of free-trade. However free-trade itself is not a dogma to be adhered to at all times. There are times when free-trade, under cetain conditions, can be self-defeating.
Call me a cynic, but I can’t help thinking the sudden rush in the USA to rigidly enforce product safety legislation against Chinese imports suggests something.
Reply: I daresay some of the problems are genuine, and do need to be sorted out, but I am sure people are now looking for Chinese safety issues because it is the story and the US is waking up to just how dependent they are on the Chinese suppliers.
Of course it is not just the Americans that have concerns about the safety of products produced in China.
The difference is of course the USA can do something about it, meanwhile, the UK which is subject to the facile European Union self certification by foreign manufacturers including those in China, cannot.
http://women.timesonline.co.uk/tol/life_and_style/women/families/article2284323.ece
That’s not at all true apl.
If your local authority believe that a product contravenes safety standards and decides to take enforcement action they have more powers than superman - some of it because of EU legilsation that harmonises product safety in the EU, but mostly under the UK Consumer Protection Act.
It is the importer to the EU that is responsible for keeping all the safety documentation and affixing the CE mark to the product. The documentation must comply with EU legislation, but is produced by the manufacturer as a sales aid. The importer within the EU is responsible for getting the goods tested, not the Chinese manufacturer.
Forgery happens everywhere in everything. Products can still be assessed for safety by enforcers here by sending them to a UKAS acreditted assessment centre.
This all comes back to the arguments about excessive regulation. All of the excessive regulation they need to turn us into a Stalinist dictatorship is already there from my point of view, just how much do you enforce it?
Personally I would like to see much of it repealed. The 1987 Consumer Protection Act removed the need to for the claimant to prove negligence over damages cause by unsafe products. The prospect of being sued for a few hundred thousand or million Euros is a bigger deterent for honest business than a