Let's pull one more global banking 1% TALKING POINT tied to these same trade deals, tariff laws, and global banking COMPLEX FINANCIAL INSTRUMENTS. What 99% WE THE PEOPLE have heard these few decades from the same right wing Republicans having voted as a majority with Bill Clinton to install is CHINA IS A CURRENCY MANIPULATOR.
Currency manipulation entails many factors including those of which we discussed this week. Global banking 1% derivative credit default swaps manipulate AND CORRUPT everything in the economic system. Our US currency the DOLLAR is becoming history because of these currency manipulations fueled by global Wall Street and European/UK banks-----China was simply a willing partner.
The goal of MOVING FORWARD ONE WORLD ONE DIGITAL CURRENCY as we discuss often is killing the US DOLLAR and to do that Chinese economic policy helping US/UK/European global corporations inside its FOREIGN ECONOMIC ZONES-----it indeed is killing the value of our US DOLLAR and with these sovereign debt frauds will end the existence of the US DOLLAR. This was done by CLINTON/BUSH/OBAMA---now TRUMP is MOVING all this FORWARD.
Remember, the Chinese EXPORTERS were largely those Chinese global factories producing products for our US/UK/European corporations. Now that all these corporations are MULTI-NATIONAL---and China is no longer interested in EXPORTING to US as US 99% are being made to poor to consume-----this currency manipulation via trade deficits are disappearing.
What it means if Trump names China a currency manipulator
Paul Wiseman, The Associated Press Published 10:57 a.m. ET Dec. 29, 2016
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WASHINGTON — President-elect Donald Trump has vowed to name China a currency manipulator on his first day in the White House.
There's only one problem – it's not true anymore. China, the world's second-biggest economy behind the United States, hasn't been pushing down its currency to benefit Chinese exporters in years. And even if it were, the law targeting manipulators requires the U.S. spend a year negotiating a solution before it can retaliate.
Trump spent much of the campaign blaming China's for America's economic woes. And it's true that the U.S-China trade relationship is lopsided. China sells a lot more to the United States than it buys. The resulting trade deficit in goods amounted to a staggering $289 billion through the first 10 months of 2016.
But in fact, for the past couple of years, China has been intervening in markets to prop up its currency, the yuan, not push it lower.
It went a step further on Thursday, watering down the significance of the dollar and adding 11 additional currencies in a foreign-exchange basket, according to a document released by the China Foreign Exchange Trading System.
What does currency have to do with the trade gap?
When China's yuan falls against the U.S. dollar, Chinese products become cheaper in the U.S. market and American products become more costly in China.
So the U.S. Treasury Department monitors China for signs it is manipulating the yuan lower. Treasury has guidelines for putting countries on its currency blacklist. They must, for example, have spent the equivalent of 2 percent of their economic output over a year buying foreign currencies in an attempt to drive those currencies up and their own currencies down.
Treasury hasn't declared China a currency manipulator since 1994.
What would happen if the U.S. declared China a currency manipulator?
Probably not much, at least initially.
If Treasury designates China a currency manipulator under a 2015 law, it is supposed to spend a year trying to resolve the problem through negotiations.
Should those talks fail, the U.S. can take a number of small steps in retaliation, including stopping the U.S. Overseas Private Investment Corp., a government development agency, from financing any programs in China. Trouble is, the United States already suspended OPIC operations in China years ago — to punish Beijing in the aftermath of the bloody 1989 crackdown in Tiananmen Square.
So naming China a currency manipulator is mostly "just a jaw-boning exercise," said Amanda DeBusk, chair of the international trade department at the law firm of Hughes Hubbard & Reed and a former Commerce Department official. "There's no immediate consequence."
Is China guilty of using currency to help its exporters?
For years, China pretty clearly manipulated its currency to gain an advantage over global competitors. It bought foreign currencies, the U.S. dollar in particular, to push them higher against the yuan. As it did, it accumulated vast foreign currency reserves — nearly $4 trillion worth by mid-2014.
But now the Chinese economy is slowing, and Chinese companies and individuals have begun to invest more heavily outside the country. As their money leaves China, it puts downward pressure on the yuan.
The yuan has dropped nearly 7 percent against the dollar so far this year. The Chinese government has responded by draining its foreign exchange reserves to buy yuan, hoping to slow the currency's fall. China's reserves have dropped by $279 billion this year to $3.05 trillion.
If Beijing stepped back and let market forces determine the yuan's level, it likely would fall even faster, giving Chinese exporters even more of a competitive edge.
So Beijing is doing the opposite of what Trump says it's doing. Cornell University economist Eswar Prasad earlier this month called Trump's plans to name China a currency manipulator "unmoored from reality."
"The whole discussion is ironic," said David Dollar, senior fellow at the Brookings Institution and a former official at the World Bank and U.S. Treasury Department. "It's out of date."
Could Trump do anything on his own?
Gary Hufbauer, an expert on trade law at the Peterson Institute for International Economics, notes that as president, Trump could nonetheless escalate any dispute over the currency on his own. Over the years, Congress has ceded the president broad authority to impose trade sanctions. Trump has threatened to slap a 45 percent tax, or tariff, on Chinese imports to punish it for unfair trade practices, including alleged currency manipulation.
Brookings' Dollar said China likely would bring a case to the World Trade Organization "against any protectionist measures that are a violation of U.S. commitments to the WTO," which oversees the rules of global commerce and rules on trade disputes.
Some trade analysts wonder if Trump is using the tariff threat as a negotiating tool to win concessions from China.
Whatever the U.S. motive, China has a consistent record of retaliating against trade sanctions. When the Obama administration slapped tariffs on Chinese tire imports in 2009, for instance, China lashed back by imposing a tax on U.S. chicken parts.
China's Global Times newspaper, published by the ruling Communist Party's People's Daily, has already speculated that "China will take a tit-for-tat approach" if Trump's tariffs are enacted. The paper suggested that Beijing might limit sales of Apple iPhones and Boeing jetliners in China.
"The Chinese are predictable and reliable," DeBusk said. "If they get punched, they punch back."
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China is transitioning from several decades of having Western corporations inside Chinese Foreign Economic Zones allowing those zones to be controlled by those WESTERN NATIONS------to using those FOREIGN ECONOMIC ZONE factory structures to sell to consumers inside China and the Asian Economic Zone. It is not EXPORTING TO US from China for the most part.
China is expanding to AFRICA taking control of those FOREIGN ECONOMIC ZONES filled with ASIAN GLOBAL FACTORIES exporting from Africa. China is also staged to be top foreign global corporation inside US FOREIGN ECONOMIC ZONES EXPORTING out of US --------
This is why the dynamic over several decades of MADE IN CHINA and China's ability to be a CURRENCY MANIPULATOR are changing. CLINTON/BUSH/OBAMA and all this ROBBER BARON fraud and US Treasury bond debt taking the US to economic collapse----THAT IS WHAT WILL KILL OUR US DOLLAR........not China.
China is no longer interested in EXPORTING to US-----as it takes control of Foreign Economic Zones inside China and EXPORTS to Asian Economic Zone nations and to its own global 1% and their 2%.
Can Chinese SEZs spur industrial development in Africa?
9 September 2013
Vinaye Ancharaz
How much impact do Chinese SEZs have on Africa's industrialisation?
Ever since the Chinese government announced in 2006 that it would support the establishment of "economic and trade cooperation zones" (ETCZ) abroad as part of its "Going Global" policy, Africa has hoped to attract a fair share of the 50-or-so proposed special economic zones (SEZs) to the continent. At present, five zones are at different stages of construction - one each in Ethiopia and Mauritius, and two in Nigeria; the Chambishi zone in Zambia is partially operational while the proposed Algerian zone has been suspended. Only Egypt's Suez ETCZ is fully operational.
The African countries that competed to host the Chinese SEZs saw in these zones long- term prospects for industrial development or upgrading value chains in addition to the much-needed jobs that they would create. Although it is too early to assess the real impacts of the zones, we can put together some elements - based on experiences on the ground, theoretical insights, prospective analysis and even hypotheses about China's underlying motivations - in our attempt to determine whether these zones could be a springboard for industrialisation on a continent where several previous attempts by governments with similar zones have failed.
In this regard, the evidence so far is not very encouraging. The number of SEZs in Africa is too small to spark an effective industrial push at the continental level. Moreover, the countries in dire need of an industrial zone did not receive any attention from the Chinese developers - at least not in the initial round of tenders - and those hosting the SEZs are ill-prepared to benefit fully from the effort. Such evidence seems to weigh in favour of the critics, who claim that the SEZs are meant to extend China's growing influence in the world by trading a few thousand low-skill jobs and half-promises of knowledge transfers for market access, control over resources and ‘soft' power. These claims are often fuelled by a dearth of data and the characteristic opacity of the modes of Chinese engagement in Africa.
The state of industrialisation in Africa
Africa's poor state of industrialisation is well known and widely documented, as are the reasons for it. At 11.2 percent in 2011, Sub-Saharan Africa's (SSA) share of manufacturing value added in GDP - a commonly used measure of industrial development - is the second lowest among all regions of the world, only slightly behind the Middle East and North Africa (whose low share is due to the region's historical dependence on oil). Moreover, the SSA share would be 3 percentage points lower if South Africa was excluded, making the region the least industrialised in the world. SSA's export structure tells the same story: the manufacturing share of total exports (about 25 percent in 2011) is low, because SSA produces few industrial products of export quality. More worrying, both indicators have shown a downward trend in recent years, suggesting that Africa's timid industrialisation effort has waned. On the whole, the region (barring South Africa and a few other middle-income countries) remains globally uncompetitive; SSA ranks lowest on the United Nations Industrial Development Organization (UNIDO) competitive industrial performance (CIP) index.
Enter China
China has dented Africa's efforts at industrialisation in several ways. First, it has perpetuated Africa's dependence on natural resources. China's share of Africa's fuel and mineral exports, which increased from 1.8 percent in 2000 to 19 percent in 2012, was a factor in deepening Africa's concentration in natural resource extraction. The share of fuels and minerals in Africa's exports went up from 54 percent in 2000 to 64 percent in 2012. While China's share of Africa's commodity exports is small relative to traditional partners, like the United States (US) and Europe, China is absorbing an increasing share of these exports. In recent years, over 60 percent of Africa's exports to China have consisted of oil and minerals.
Second, the influx of cheap Chinese imports into Africa has caused significant injury to local industry, with the impact varying in intensity across countries. Trade unions in Zambia have blamed Chinese imports for undermining the clothing and electrical sectors. In Ethiopia, while competition from Chinese shoe imports has forced the local footwear industry to innovate and upgrade, a number of producers have been squeezed out while surviving firms have contracted. Similarly, survey evidence from Mauritius shows that small- and medium-sized enterprises (SMEs) in the clothing, footwear and furniture sectors have borne the brunt of Chinese competition, being unable to match the price- quality ratio offered by Chinese products.
WHAT????? AFRICAN FOREIGN ECONOMIC ZONES PUSHING AFRICAN SMALL BUSINESS DOMESTIC ECONOMY DOWN? WHO WOULD HAVE THOUGHT THAT?
Third, African exporters of manufactures and processed goods have faced stiffer competition from China in their traditional export markets. In Mauritius, Swaziland and South Africa, the clothing industry suffered major setbacks in the run-up to January 1, 2005, marking the end of the apparel quotas and the beginning of Chinese dominance of the global apparel market. Specifically, more than 25,000 jobs (or 28 percent of employment) were lost in the Mauritian garment sector between 2001 and 2005 as foreign firms closed shop to locate elsewhere.
China's threat to African industry is significant, since China's comparative advantage lies in the same low-skill, labour-intensive and low-technology sectors, such as clothing, furniture and footwear, that offer the best chances for industrialisation in Africa. Some authors (e.g. Kaplinsky, 2008) have argued that China's global ascendancy can permanently damage the future of manufacturing in Africa.
Can Chinese SEZs help?
With the notable exception of Mauritius, Africa's performance with industrial development schemes, such as EPZs, has been lacklustre. The fact that the schemes were government led, marred with policy inconsistencies and failed to attract private investors - local or foreign - meant that they were bound to fail.
Against this background, the Chinese SEZs can be a harbinger of industrialisation in Africa - for at least two reasons. First, the SEZs propose investment in a wider range of sectors, spanning agro-industry, manufacturing and services (Table 1). These sectors will be new to the industrial landscape of most of the countries hosting the SEZs and will be particularly beneficial to Zambia, Nigeria and Ethiopia, which currently have very low levels of industrialisation.
Second, the SEZs are designed to be integrated into the domestic economy, as they are in China. The Chinese government has expressed its wish to transmit to Africa lessons from its own development experience as well as transfer through foreign direct investment (FDI) and aid much-needed knowledge and technology. The Chinese are also supporting African SMEs to develop their businesses in the zones through a USD 1 billion fund announced at the 2009 Forum on Africa China Cooperation (FOCAC).
The question then is how much of an impact will the SEZs (assuming they are successful) have on industrialisation in Africa?
We propose a two-tiered answer to this question. For the SEZs to have any long-term impact at all, they must first address the critical issues that have arisen in each country at the early stages of zone development. These relate to financing gaps and to policy incoherence. Construction works have often stalled owing to delays in the disbursement of loans, grants and subsidies promised by the Chinese government, and the zone developers' inability to raise funding of their own. Similar problems may also constrain subsequent FDI into the zones. Host-country governments, on the other hand, have encountered financial difficulties in providing offsite infrastructure or in refunding zone developers the agreed share of infrastructure costs, as in Ethiopia. Perhaps an even more important challenge is the lack of political will and/or the absence of a coherent incentive framework in the host country to support the SEZs. If the zones are not integrated into the country's national development strategy, they will struggle to achieve the desired impacts.
Beyond these constraints, the SEZs must attract a critical mass of investors, both domestic and foreign; develop linkages with the domestic economy; stimulate higher value-added manufacturing activities and generate significant productivity spillovers if they are to make a lasting impact on industrial development in Africa. However, significant challenges have emerged in each of these areas.
Investment
Zone developers are struggling to attract Chinese firms in the industries proposed, and the economic crisis has made matters worse. For example, the Mauritian zone has failed to attract a single Chinese investor two years after its completion, while the majority of companies operating in the Chambishi zone are merely subsidiaries of the developers. On the other hand, local participation in the SEZs is likely to be restricted by the reluctance of Chinese firms to seek joint ventures (both because of fundamental differences in the business models of Chinese and local firms and certain negative experiences (as in Egypt, w here Chinese developers have accused the local partners of embezzling funds)); by entry barriers, such as excessively high investment thresholds for local investors; by the lack of a supportive incentive framework at home; and, in the case of Mauritius, an outright ban on local investors' access to the zone.
Against this backdrop, it is interesting to note that a number of private Chinese industrial zones (in South Africa and Botswana, for example) are thriving. Even in the countries hosting SEZs, some Chinese investors are choosing to operate outside the zones (for example, Huajian Group, a Chinese footwear company, in Ethiopia) in an attempt to shun governmental control and to avoid high rent and utility costs in cases where the zones are underpopulated.
Domestic linkages
Prospects for the SEZs to build backward linkages within the local economy are rather weak both because the raw materials and intermediates needed in assembly-type operations may not be available locally and because of the known propensity of Chinese companies to source inputs through their own networks. At the same time, forward linkages, which usually involve the provision of ancillary services to the zones, may be constrained by deficient infrastructure and logistics and lack of competition in the host economy.
Higher value-added activities
The SEZs promised to bring new industrial activities as well as opportunities for higher value-added processing and upgrading to Africa. This is evident in the Chinese investment of USD 220 million in a copper smelter in the Zambian Multi-Facility Economic Zone in Chambishi. A bio-hydrometallurgy project, designed to increase the recovery of Zambian copper by 20 percent is being paraded as a model of technological collaboration between China and Zambia. However, beyond copper, there is no evidence that plans to manufacture televisions, mobile phones and other consumer electronics in the Chambishi zone have materialised yet.
The Chinese are already operating a cement plant in Ethiopia's Eastern industrial zone. Future investments are expected in the electric machinery and steel industries. But, these are yet to come, and emerging evidence suggests that the zone will feature mainly headquarter services. In Mauritius, the marginal impact of the proposed SEZs is likely to be smaller than elsewhere both because the country boasts a relatively diversified industrial base and because the Jin Fei zone will attract investments in sectors - such as property development, tourism and textiles - that are not strictly aligned with the country's future economic orientation.
Technology transfer
Finally, prospects for technology transfer are also limited - both because Chinese investments may not generate significant spillovers (since Chinese firms are notorious for protecting proprietary knowledge and keeping trade secrets) and because local firms may lack the capacity or "technological readiness" to adopt any spillover that does take place. Joint ventures are an excellent vehicle for technology transfer, but, as noted earlier, the Chinese are generally averse to partnerships with local firms. Similarly, the lack of a critical mass of local investors in the zones will substantially reduce the scope to benefit from any technology spillovers. Last, but not least, skill transfer through labour turnover might be limited if the zones employ few local workers and if these workers are concentrated in low-skill jobs.
What should host countries do?
There are several measures that policymakers in host countries can take to maximise the impact of the SEZs on industrial development. First, while African governments are providing an elaborate set of incentives to Chinese investors in the zones, few are actually subsidising local investors, and even fewer have put in place a regulatory framework to encourage local investors to set up in the zones, or local suppliers to provide inputs and services to SEZ firms. For the zones to succeed as a test case of industrialisation, it is crucial that the government fully ‘owns' the SEZs, believes in their potential and shows the political commitment to make them work. This requires that the zones be fully integrated into the country's development strategy and be seen as platforms for learning and technology transfer beyond their short-term impact on jobs.
Second, local ownership will be fostered if the host-country government has an equity stake in the zones. This can be justified against the numerous concessions made to the Chinese developers, including leases of land, provision of offsite infrastructure and offers of a whole range of alluring fiscal incentives at high opportunity cost to the host-country government. The Nigerian government successfully negotiated a stake in the two zones; this experience should guide future zone development elsewhere in Africa. However, excessive participation by national governments - as in Egypt's Suez zone - should be avoided, since this might lead to interference and inefficiencies in zone management.
Third, since local participation in the zones is critical to realising productivity spillovers, African governments must set up an incentive scheme - complementary to the USD 1 billion SME fund proposed by the Chinese government - to support local firms' investment in the zones. In addition, they must play a proactive role in selecting and promoting potential "winners" as was the case in East Asia.
Fourth, the industry focus of the SEZs should be negotiated between the host-country government and the Chinese stakeholders, rather than being "imposed" by the latter. This will ensure that the zones' activities are aligned with the country's needs in terms of industrial development and that any resulting technology spillover is more readily absorbed. Industries that are highly capital- or skill-intensive might contribute little to industrial upgrading in economies that are endowed with low-skilled labour and have had little experience with industry. In Mauritius, on the other hand, the industry focus is misplaced for the opposite reason. Mauritius needs high-tech industries, but the Jin Fei zone will serve mainly as a residential and commercial base for Chinese operations in the African region.
The systemic constraints to industrial development will take longer to tackle, but they must not be neglected. The SEZ host countries, both existing and potential, must invest in making local firms and the economy technology-ready. This calls for substantial investment in local universities and research institutions and the provision of incentives for firms to train their workers, adopt best management practices and to restructure and innovate.
Finally, the government should make greater efforts to address administrative and regulatory constraints to local supply-side capacity and provide a platform for Chinese companies and domestic firms to come together to learn about win-win partnerships or commercial opportunities. These measures will help strengthen potential linkages with the local economy.
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Greece as Italy was targeted for the worst of global banking 1% subprime mortgage frauds and sovereign debt frauds just to send this LEFT SOCIAL PROGRESSIVE CAPITALIST nation into the deepest of debt. The 99% of Greek citizens lost their homes, wealth, pensions, health care, and personal assets then most were sent packing as EX-PATS----just as is happening in ITALY, SPAIN, IRELAND-----those are the PIIGS European nations targeted by global banking loaded with the worst of sovereign debt. The rich of all these nations of course off-shored all their wealth while AUSTERITY KILLED the 99% of citizens.
Remember, the goal of ONE WORLD ONE GOVERNANCE is ONE DIGITAL CURRENCY with ONE WORLD CENTRAL BANK. Greece sadly has been used as a laboratory for all these criminal and corrupt banking policies. So, what we now see happening in Greece is international media telling the global 99% Greece has to go with digital currency in order to get itself out of debt.
THIS IS CURRENCY MANIPULATION AND IT IS BEING DONE BY WORLD BANK/IMF WITH EUROPEAN BANKING CREATING THE SOVEREIGN DEBT FRAUD.
As with all nations handed to WORLD BANK/IMF----they stay in debt for decades as financial 'solutions' drain 99% of citizens until FOREIGN ECONOMIC ZONES and societal transitions are installed. US is heading to bankruptcy by same sovereign debt frauds to be pushed into the hands of WORLD BANK/IMF.
The solution ---GET RID OF THE GIANT SQUID-------global banking
“There is a precedent for parallel currencies working,” said Hileman. “But the fundamental issue in Greece is the size of the debt and the fact that the economy is not growing, and you’ve got to find some way to in effect reduce that debt burden in Greece.”
Could a digi-drachma avert a Grexit?
Jemima Kelly5 Min Read
LONDON (Reuters) - Greek Finance Minister Yanis Varoufakis may have been joking when he tweeted about Greece adopting bitcoin, but some financial technology geeks say an asset-backed digital currency could be a solution to the country’s cash crisis.
Greece faces 1.5 billion euros of repayments to its creditors this month, having been locked in talks on a cash-for-reforms deal for months. Failure to agree could trigger a Greek default and potential exit from the euro zone, dealing a big blow to the supposedly irreversible currency union.
In order to avoid such a “Grexit” some reckon Greece could adopt a bitcoin-like parallel digital currency with which it could pay its pensioners and public-sector workers. It could be called the “digi-drachma”, after Greece’s pre-euro currency.
But unlike bitcoin, which is totally decentralized and given value simply by its usefulness, it would be issued by the state and backed with the country’s substantial assets.
“If you’ve got all these assets, why don’t you use them to back up a digital currency?” said Lee Gibson-Grant, founder of Coinstructors, a consultancy for those wanting to use bitcoin’s underlying technology — the blockchain — to start businesses.
If Greece’s assets could be tokenized and issued as a digital currency, argues Gibson-Grant, public-sector wages and pensions could be paid with it. That would preserve scarce euros for repaying the country’s creditors and help avoid a sell-off of valuable assets at rock-bottom prices.
Varoufakis himself, who on April 1 tweeted a link to a satirical story that reported him as saying Greece would adopt bitcoin if a deal with its creditors could not be reached, blogged in 2014 about the possibility of a parallel “Future Tax (FT) coin”.
The FT coin, said Varoufakis, an academic economist whose radical-left Syriza party was then not yet in government, would be denominated in euros but backed by future tax revenues.
ONLY THE FAR-RIGHT WING WOULD CREATE CURRENCY ON ACCESSIBLE THROUGH INTERNET CORPORATIONS. THIS IS NOT A RADICAL LEFT PARTY.
It would use a “bitcoin-like algorithm in order to make the system transparent, efficient and transactions-cost-free” and could provide “a source of liquidity for the governments that is outside the bond markets”.
IOU CURRENCY
Greece’s radical left is not alone in having considered a parallel currency. The European Central Bank has analyzed a scenario in which Greece pays civil servants with IOUs, which would rely on future tax revenue in a similar way to the FT coin, creating a virtual second currency in the euro bloc.
WHAT A COINCIDENCE---THE RADICAL 'LEFT' HAS THE SAME DIGITAL CURRENCY GOALS AS FAR-RIGHT WING GLOBAL BANKING 1%!
ECB experts decided it would not work, as public sector workers would receive payment in the IOU currency rather than in euros, putting further pressure on Greek banks because those workers were likely then to plunder their savings.
Furthermore, the basis for both such ideas relies on an implicit assumption that the Greek state will not collapse — by no means guaranteed in the current climate.
“This would be different to a distributed, trustless digital currency such as bitcoin, since holders would still have to trust the issuer,” said Tom Robinson, Chief Operating Officer at London-based bitcoin storage firm Elliptic.
For Garrick Hileman, an economic historian at the London School of Economics who specializes in alternative currencies, the problem with such a plan is that it does not deal with Greece’s most basic problem: the need to reduce its debt burden.
“There is a precedent for parallel currencies working,” said Hileman. “But the fundamental issue in Greece is the size of the debt and the fact that the economy is not growing, and you’ve got to find some way to in effect reduce that debt burden in Greece.”
If a digital currency has no place in a solution for Greece, the blockchain technology behind bitcoin — a globally distributed ledger of all of bitcoin’s transactions that is evolving beyond the world of digital currencies — might do.
The government of Honduras, for example, has recently gone into partnership with Texas-based technology firm Factom to build a secure and immutable land title record system using the blockchain to mitigate against fraud. And CEO Peter Kirby reckons Greece could use a similar system to deal with its tax-dodgers.
“With a true global distributed ledger that basically keeps track of everything that happens, you can start putting a lot more transparency into the way the Greek government does its business,” Kirby said.
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American citizens especially in Baltimore have seen these economic structures pushed in preparation for the coming economic collapse of the US DOLLAR. Greek citizens not only lost all their wealth and assets---they lost their CURRENCY. Media tells us Greek citizens are racing to install DIGITAL CURRENCY but of course they are not ----it is being forced on them by WORLD BANK/IMF.
CURRENCY MANIPULATION WAS DONE BY GLOBAL BANKING 1% THESE FEW DECADES OUT OF CHINA----NOW THEY ARE BEHIND THESE CURRENCY MANIPULATIONS AS WELL.
All of this planned from 1960s-70s by ROBBER BARON global 1% put into action by CLINTON/BUSH/OBAMA.
BITCOIN is not that ONE WORLD ONE DIGITAL CURRENCY. It is simply yet another product created to fail with losses to those investing and using these products.
Our US 5% to the 1% black, white, and brown pols and players think all this is FUNNY. They are living for today not caring that our US 99% are MOVING FORWARD to same Greek economic disaster.
Trading Meat for Tires as Bartering Economy Grows in Greece
By LIZ ALDERMANSEPT. 21, 2015
ATHENS — Thodoris Roussos stood in his butcher’s shop and pointed to a large white delivery truck at the curb. For months, he had put off replacing the tires, because Greece’s financial crisis had cut into business. But recently, he upgraded the van with a set of good wheels at a price that could not be beat.
“Normally, the tires cost 340 euros, but no money changed hands,” Mr. Roussos said, beaming. “I paid the guy in meat.”
As Greece grapples with a continued downturn, bartering is gaining traction at the margins of the economy, part of a collection of worrisome signs for Prime Minister Alexis Tsipras who was re-elected on Sunday.
Graphic artists are exchanging designs for olive oil. Accountants swap advice for office supplies. In the agricultural heartland and on the Greek islands, informal bartering, which has historically helped communities survive, has intensified as more people exchange fruits, vegetables, other crops, equipment, clothing and services.
“In Greece there’s a major liquidity problem,” said Mr. Roussos, who met the tire vendor and scores of new clients through an Athens-based online barter club, Tradenow, which created its own currency called tradepoints. “People are finding it more convenient to trade because money is not readily available.”
The bartering activity remains modest and will not provide a lasting solution to Greece’s problems, which remain a politically volatile and tricky issue for the new coaltion government. But such efforts represent an opportunity for Greeks to navigate the uncertainty, as the country still faces capital controls and a shaky banking system.
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If US 99% of WE THE PEOPLE are made to poor to consume creating the reasons for decline of Chinese EXPORTS to US-----one Chinese EXPORT is soaring------those 99% global labor pool being sent to African, European, and US FOREIGN ECONOMIC ZONES and NO, the Chinese government does not care how they are treated because no one can treat them worse than global Chinese factories inside FOREIGN ECONOMIC ZONES.
Humans as slaves are less monetary assets as bartering assets. The Philippines and other third world nations have been exporting their 99% of citizens to Foreign Economic Zones for revenue often exchanged in products. China will see its EX-PAT population soar to fill expanding Chinese global factories -----who need money when living in global factories working for a bed and meal?
CHINA IS CREATING ITS DIGITAL CURRENCY AND WE CAN BET IT WILL END BEING ONE WORLD ONE CENTRAL BANK DIGITAL CURRENCY.
MOVING FORWARD entails a great amount of human capital as slave labor----no currency needed. This is yet another CURRENCY MANIPULATION for modern history as labor especially in Western nations has come with wages. CLINTON/BUSH/OBAMA created this massive global human capital distribution network that will explode as Africa, Europe, Canada, and US are destinations for slave labor AND having sovereign US citizens becoming that global labor pool export.
Asia Pacific |
Uneasy Engagement
China’s Export of Labor Faces Scorn
By EDWARD WONGDEC. 20, 2009
TRUNG SON, Vietnam -- It seemed as if this village in northern Vietnam had struck gold when a Chinese and a Japanese company arrived to jointly build a coal-fired power plant. Thousands of jobs would start flowing in, or so the residents hoped.
Four years later, the Haiphong Thermal Power Plant is nearing completion. But only a few hundred Vietnamese ever got jobs. Most of the workers were Chinese, about 1,500 at the peak. Hundreds of them are still here, toiling by day on the dusty construction site and cloistered at night in dingy dormitories.
“The Chinese workers overwhelm the Vietnamese workers here,” said Nguyen Thai Bang, 29, a Vietnamese electrician.
China, famous for its export of cheap goods, is increasingly known for shipping out cheap labor. These global migrants often work in factories or on Chinese-run construction and engineering projects, though the range of jobs is astonishing: from planting flowers in the Netherlands to doing secretarial tasks in Singapore to herding cows in Mongolia — even delivering newspapers in the Middle East.
But a backlash against them has grown. Across Asia and Africa, episodes of protest and violence against Chinese workers have flared. Vietnam and India are among the nations that have moved to impose new labor rules for foreign companies and restrict the number of Chinese workers allowed to enter, straining relations with Beijing.
In Vietnam, dissidents and intellectuals are using the issue of Chinese labor to challenge the ruling Communist Party. A lawyer sued Prime Minister Nguyen Tan Dung over his approval of a Chinese bauxite mining project, and the National Assembly is questioning top officials over Chinese contracts, unusual moves in this authoritarian state.
Chinese workers continue to follow China’s state-owned construction companies as they win bids abroad to build power plants, factories, railroads, highways, subway lines and stadiums. From January to October 2009, Chinese companies completed $58 billion of projects, a 33 percent increase over the same period in 2008, according to the Chinese Ministry of Commerce.
From Angola to Uzbekistan, Iran to Indonesia, some 740,000 Chinese workers were abroad at the end of 2008, with 58 percent sent out last year alone, the Commerce Ministry said. The number going abroad this year is on track to roughly match that rate. The workers are hired in China, either directly by Chinese enterprises or by Chinese labor agencies that place the workers; there are 500 operational licensed agencies and many illegal ones.
Chinese executives say that Chinese workers are not always less expensive, but that they tend to be more skilled and easier to manage than local workers. “Whether you’re talking about the social benefits or economic benefits to the countries receiving the workers, the countries have had very good things to say about the Chinese workers and their skills,” said Diao Chunhe, director of the China International Contractors Association, a government organization in Beijing.
But in some countries, local residents accuse the Chinese of stealing jobs, staying on illegally and isolating themselves by building bubble worlds that replicate life in China.
“There are entire Chinese villages now,” said Pham Chi Lan, former executive vice president of the Vietnam Chamber of Commerce and Industry. “We’ve never seen such a practice on projects done by companies from other countries.”
At this construction site northeast of the port city of Haiphong, an entire Chinese world has sprung up: four walled dormitory compounds, restaurants with Chinese signs advertising dumplings and fried rice, currency exchanges, so-called massage parlors — even a sign on the site itself that says “Guangxi Road,” referring to the province that most of the workers call home.
One night, eight workers in blue uniforms sat in a cramped restaurant that had been opened by a man from Guangxi at the request of the project’s main subcontractor, Guangxi Power Construction Company. Their faces were flushed from drinking Chinese rice wine. “I was sent here, and I’m fulfilling my patriotic duty,” said Lin Dengji, 52.
Such scenes can set off anxieties in Vietnam, which prides itself on resisting Chinese domination, starting with its break from Chinese rule in the 10th century. The countries fought a border war in 1979 and are still engaged in a sovereignty dispute in the South China Sea.
Vietnamese are all too aware of the economic juggernaut to their north. Vietnam had a $10 billion trade deficit with China last year. In July, a senior official in Vietnam’s Ministry of Public Security said that 35,000 Chinese workers were in Vietnam, according to Tuoi Tre, a progressive newspaper. The announcement shocked many Vietnamese.
“The Chinese economic presence in Vietnam is deeper, more far-reaching and progressing faster than people realize,” said Le Dang Doanh, an economist in Hanoi who advised the preceding prime minister.
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Here are those ROBBER BARON global banking 1% Clinton neo-liberal pols all of which have been in Congress long enough to vote for all of GATT, NAFTA, TARIFF LAWS creating these trade deficits killing US manufacturing-----they here are TAKING A STAND against all that policy they installed and from which they each were made RICH.
ECONOMIC POLICY INSTITUTE as we said is a far-right wing global banking 1% think tank----they will never educate how currency manipulation stems from US corporations in overseas Foreign Economic Zones------wanting cheap raw materials from US sent to be used by contracted Chinese factories to build those global corporate products. REID, PELOSI, SCHUMER top guns at ROBBER BARON few decades.
To end currency manipulation that harms 99% US WE THE PEOPLE----we simply stop allowing all domestic economies die----taken completely by global trade----rebuild local small business economies not NEEDING ANY trade deals. Certainly we do not want to MOVE FORWARD global human capital distribution system filling our US cities deemed Foreign Economic Zones---creating super-sized CURRENCY MANIPULATION.
The Democrats are making a stand on currency manipulation — and it's a really good idea
Jeff Spross
April 27, 2015
It's down to the wire, but Democrats appear to finally be getting serious about making sure the Trans-Pacific Partnership deal — a massive trade pact between the U.S. and 11 other Pacific Rim nations — is worker-friendly. And if it isn't, it may not happen at all.
OH, REALLY?????
At issue is what's called trade promotion authority — or "fast track" authority — which would give the president the ability to negotiate trade deals with other countries with some minimal criteria from Congress. Then the deal would be approved or rejected by the legislature in a simple up-or-down vote.
On Wednesday, Nancy Pelosi, the leader of the Democrats in the House, threw her weight behind an alternative version of fast track authority that comes with more serious strings: It would create an advisory board to ensure the White House has met certain criteria in the TPP deal, including labor and environmental protections.
But most importantly, the Democrats' alternative would require the TPP to include rules against currency manipulation by the member countries.
Currency manipulation is when governments engage in policies that drive down the value of their currency relative to other currencies. And lately, "other currencies" has usually meant the U.S. dollar. This makes our exports more expensive, and their imports cheaper, which drives up the U.S. trade deficit.
In practical terms, this means that demand, which could be staying in the U.S. economy and creating jobs, is instead leaving to create jobs in other countries' economies. At the moment, the trade deficit is somewhere in the vicinity of $500 billion, which amounts to about 3 percent of the economy just getting sucked up into the ether every year. That costs American jobs. But because the jobs lost are disproportionately in exporting industries like manufacturing — and because a high-value dollar helps low-wage employers, like Walmart, that have invested in low-cost foreign supply chains — the trade deficit also drives down wages, speeding up the "hourglass" effect, in which our economy produces lots of high-paying and low-paying jobs, but fewer and fewer middle-income jobs.
The latest work on the U.S. trade deficit, by Fred Bergsten and Joseph Gagnon, suggests currency manipulation could account for anywhere between $200 billion to $500 billion of the trade deficit — a little less than half, to nearly all of it.
With those numbers, the Economic Policy Institute (EPI) projected that eliminating currency manipulation could create anywhere from 2.3 million to 5.8 million American jobs. In February of 2014, EPI estimated that job creation would close one-third to three-fourths of the hole blown in the American economy by the 2008 collapse. (It might close it even further now, given the strong job growth we saw in the past year.) Furthermore, those job gains would be spread across every state and they would reduce the federal budget deficit, since the government would need to borrow less to make up the lost demand. In fact, in terms of impact on the economy, the importance of the trade deficit swamps the federal government's budget deficit.
OH, REALLY????
Economists who support putting currency manipulation rules in the TPP also think there's a pretty simple definition that teases out the manipulation from other legitimate policies that also happen to affect currency values. "That is the use of domestic government or government-controlled resources to buy assets denominated in foreign currencies," said Robert Scott, an economist with EPI. "If you look at the foreign currency holdings of the Federal Reserve, they're trivial — a few tens of billions of dollars. Officially, in the Japanese central bank, they're about $1.4 trillion. So that's a bright line."
For example, when the U.S. Federal Reserve engaged in quantitative easing to try to boost the economy, it mainly did it by buying up assets denominated in our own currency. That would pass muster under this definition, even though the policy did put downward pressure on the U.S. dollar. Had the Fed done it by buying up assets in foreign currencies, that would've been another matter.
Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, has also endorsed this approach, and pointed to Bergsten's suggestion that the line be drawn at holding enough assets in a foreign currency to cover one year's worth of external liabilities, and no more. The idea is that foreign governments would need to divest holdings to get below that threshold, and if they got above it again, certain penalties would hit: taxes, fines, cancelation of certain trade privileges, or even allowing reciprocal currency intervention by other countries.
CENTER ON BUDGET AND POLICY PRIORITIES IS A FAR-RIGHT WING GLOBAL BANKING 1% NEO-LIBERAL THINK TANK.
For the moment, about 20 countries, including China, have been buying up assets in foreign currencies at a rate of about $1 trillion per year, using their central banks and other institutions like government-controlled wealth and pension funds.
Administration officials and other observers seem pretty sure that demanding rules on currency manipulation would kill the TPP. But the deal is probably among the last opportunities to set the rules of the road for international trade; China isn't part of the TPP discussions, but the deal will definitely set the terrain for future negotiations. So risking the whole deal to force a reckoning on currency manipulation, as well as other protections for workers, makes sense — especially given that powerful corporations will make out like bandits under the TPP's likely expansion of intellectual property law.
Along with Pelosi, other top Democrats in the House and Senate — including Sens. Harry Reid and Chuck Schumer -- are on record opposing the current approach to the TPP and fast track authority. That not only puts them at odds with mainstream Republicans, but with a massive lobbying blitz by the Obama administration as well.
OH, REALLY AGAIN??????
The White House's preferred version of fast track authority has made it through several committees, but it still needs its final vote in both the House and the Senate. With a fair number of Tea Party Republicans also in revolt, the White House and its GOP allies will need all the votes they can muster.
If Pelosi and the other Democrats hold firm, they could yet force a set of reformed fast track and TPP agreements on their terms.
Currency manipulation entails many factors including those of which we discussed this week. Global banking 1% derivative credit default swaps manipulate AND CORRUPT everything in the economic system. Our US currency the DOLLAR is becoming history because of these currency manipulations fueled by global Wall Street and European/UK banks-----China was simply a willing partner.
The goal of MOVING FORWARD ONE WORLD ONE DIGITAL CURRENCY as we discuss often is killing the US DOLLAR and to do that Chinese economic policy helping US/UK/European global corporations inside its FOREIGN ECONOMIC ZONES-----it indeed is killing the value of our US DOLLAR and with these sovereign debt frauds will end the existence of the US DOLLAR. This was done by CLINTON/BUSH/OBAMA---now TRUMP is MOVING all this FORWARD.
Remember, the Chinese EXPORTERS were largely those Chinese global factories producing products for our US/UK/European corporations. Now that all these corporations are MULTI-NATIONAL---and China is no longer interested in EXPORTING to US as US 99% are being made to poor to consume-----this currency manipulation via trade deficits are disappearing.
What it means if Trump names China a currency manipulator
Paul Wiseman, The Associated Press Published 10:57 a.m. ET Dec. 29, 2016
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WASHINGTON — President-elect Donald Trump has vowed to name China a currency manipulator on his first day in the White House.
There's only one problem – it's not true anymore. China, the world's second-biggest economy behind the United States, hasn't been pushing down its currency to benefit Chinese exporters in years. And even if it were, the law targeting manipulators requires the U.S. spend a year negotiating a solution before it can retaliate.
Trump spent much of the campaign blaming China's for America's economic woes. And it's true that the U.S-China trade relationship is lopsided. China sells a lot more to the United States than it buys. The resulting trade deficit in goods amounted to a staggering $289 billion through the first 10 months of 2016.
But in fact, for the past couple of years, China has been intervening in markets to prop up its currency, the yuan, not push it lower.
It went a step further on Thursday, watering down the significance of the dollar and adding 11 additional currencies in a foreign-exchange basket, according to a document released by the China Foreign Exchange Trading System.
What does currency have to do with the trade gap?
When China's yuan falls against the U.S. dollar, Chinese products become cheaper in the U.S. market and American products become more costly in China.
So the U.S. Treasury Department monitors China for signs it is manipulating the yuan lower. Treasury has guidelines for putting countries on its currency blacklist. They must, for example, have spent the equivalent of 2 percent of their economic output over a year buying foreign currencies in an attempt to drive those currencies up and their own currencies down.
Treasury hasn't declared China a currency manipulator since 1994.
What would happen if the U.S. declared China a currency manipulator?
Probably not much, at least initially.
If Treasury designates China a currency manipulator under a 2015 law, it is supposed to spend a year trying to resolve the problem through negotiations.
Should those talks fail, the U.S. can take a number of small steps in retaliation, including stopping the U.S. Overseas Private Investment Corp., a government development agency, from financing any programs in China. Trouble is, the United States already suspended OPIC operations in China years ago — to punish Beijing in the aftermath of the bloody 1989 crackdown in Tiananmen Square.
So naming China a currency manipulator is mostly "just a jaw-boning exercise," said Amanda DeBusk, chair of the international trade department at the law firm of Hughes Hubbard & Reed and a former Commerce Department official. "There's no immediate consequence."
Is China guilty of using currency to help its exporters?
For years, China pretty clearly manipulated its currency to gain an advantage over global competitors. It bought foreign currencies, the U.S. dollar in particular, to push them higher against the yuan. As it did, it accumulated vast foreign currency reserves — nearly $4 trillion worth by mid-2014.
But now the Chinese economy is slowing, and Chinese companies and individuals have begun to invest more heavily outside the country. As their money leaves China, it puts downward pressure on the yuan.
The yuan has dropped nearly 7 percent against the dollar so far this year. The Chinese government has responded by draining its foreign exchange reserves to buy yuan, hoping to slow the currency's fall. China's reserves have dropped by $279 billion this year to $3.05 trillion.
If Beijing stepped back and let market forces determine the yuan's level, it likely would fall even faster, giving Chinese exporters even more of a competitive edge.
So Beijing is doing the opposite of what Trump says it's doing. Cornell University economist Eswar Prasad earlier this month called Trump's plans to name China a currency manipulator "unmoored from reality."
"The whole discussion is ironic," said David Dollar, senior fellow at the Brookings Institution and a former official at the World Bank and U.S. Treasury Department. "It's out of date."
Could Trump do anything on his own?
Gary Hufbauer, an expert on trade law at the Peterson Institute for International Economics, notes that as president, Trump could nonetheless escalate any dispute over the currency on his own. Over the years, Congress has ceded the president broad authority to impose trade sanctions. Trump has threatened to slap a 45 percent tax, or tariff, on Chinese imports to punish it for unfair trade practices, including alleged currency manipulation.
Brookings' Dollar said China likely would bring a case to the World Trade Organization "against any protectionist measures that are a violation of U.S. commitments to the WTO," which oversees the rules of global commerce and rules on trade disputes.
Some trade analysts wonder if Trump is using the tariff threat as a negotiating tool to win concessions from China.
Whatever the U.S. motive, China has a consistent record of retaliating against trade sanctions. When the Obama administration slapped tariffs on Chinese tire imports in 2009, for instance, China lashed back by imposing a tax on U.S. chicken parts.
China's Global Times newspaper, published by the ruling Communist Party's People's Daily, has already speculated that "China will take a tit-for-tat approach" if Trump's tariffs are enacted. The paper suggested that Beijing might limit sales of Apple iPhones and Boeing jetliners in China.
"The Chinese are predictable and reliable," DeBusk said. "If they get punched, they punch back."
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China is transitioning from several decades of having Western corporations inside Chinese Foreign Economic Zones allowing those zones to be controlled by those WESTERN NATIONS------to using those FOREIGN ECONOMIC ZONE factory structures to sell to consumers inside China and the Asian Economic Zone. It is not EXPORTING TO US from China for the most part.
China is expanding to AFRICA taking control of those FOREIGN ECONOMIC ZONES filled with ASIAN GLOBAL FACTORIES exporting from Africa. China is also staged to be top foreign global corporation inside US FOREIGN ECONOMIC ZONES EXPORTING out of US --------
This is why the dynamic over several decades of MADE IN CHINA and China's ability to be a CURRENCY MANIPULATOR are changing. CLINTON/BUSH/OBAMA and all this ROBBER BARON fraud and US Treasury bond debt taking the US to economic collapse----THAT IS WHAT WILL KILL OUR US DOLLAR........not China.
China is no longer interested in EXPORTING to US-----as it takes control of Foreign Economic Zones inside China and EXPORTS to Asian Economic Zone nations and to its own global 1% and their 2%.
Can Chinese SEZs spur industrial development in Africa?
9 September 2013
Vinaye Ancharaz
How much impact do Chinese SEZs have on Africa's industrialisation?
Ever since the Chinese government announced in 2006 that it would support the establishment of "economic and trade cooperation zones" (ETCZ) abroad as part of its "Going Global" policy, Africa has hoped to attract a fair share of the 50-or-so proposed special economic zones (SEZs) to the continent. At present, five zones are at different stages of construction - one each in Ethiopia and Mauritius, and two in Nigeria; the Chambishi zone in Zambia is partially operational while the proposed Algerian zone has been suspended. Only Egypt's Suez ETCZ is fully operational.
The African countries that competed to host the Chinese SEZs saw in these zones long- term prospects for industrial development or upgrading value chains in addition to the much-needed jobs that they would create. Although it is too early to assess the real impacts of the zones, we can put together some elements - based on experiences on the ground, theoretical insights, prospective analysis and even hypotheses about China's underlying motivations - in our attempt to determine whether these zones could be a springboard for industrialisation on a continent where several previous attempts by governments with similar zones have failed.
In this regard, the evidence so far is not very encouraging. The number of SEZs in Africa is too small to spark an effective industrial push at the continental level. Moreover, the countries in dire need of an industrial zone did not receive any attention from the Chinese developers - at least not in the initial round of tenders - and those hosting the SEZs are ill-prepared to benefit fully from the effort. Such evidence seems to weigh in favour of the critics, who claim that the SEZs are meant to extend China's growing influence in the world by trading a few thousand low-skill jobs and half-promises of knowledge transfers for market access, control over resources and ‘soft' power. These claims are often fuelled by a dearth of data and the characteristic opacity of the modes of Chinese engagement in Africa.
The state of industrialisation in Africa
Africa's poor state of industrialisation is well known and widely documented, as are the reasons for it. At 11.2 percent in 2011, Sub-Saharan Africa's (SSA) share of manufacturing value added in GDP - a commonly used measure of industrial development - is the second lowest among all regions of the world, only slightly behind the Middle East and North Africa (whose low share is due to the region's historical dependence on oil). Moreover, the SSA share would be 3 percentage points lower if South Africa was excluded, making the region the least industrialised in the world. SSA's export structure tells the same story: the manufacturing share of total exports (about 25 percent in 2011) is low, because SSA produces few industrial products of export quality. More worrying, both indicators have shown a downward trend in recent years, suggesting that Africa's timid industrialisation effort has waned. On the whole, the region (barring South Africa and a few other middle-income countries) remains globally uncompetitive; SSA ranks lowest on the United Nations Industrial Development Organization (UNIDO) competitive industrial performance (CIP) index.
Enter China
China has dented Africa's efforts at industrialisation in several ways. First, it has perpetuated Africa's dependence on natural resources. China's share of Africa's fuel and mineral exports, which increased from 1.8 percent in 2000 to 19 percent in 2012, was a factor in deepening Africa's concentration in natural resource extraction. The share of fuels and minerals in Africa's exports went up from 54 percent in 2000 to 64 percent in 2012. While China's share of Africa's commodity exports is small relative to traditional partners, like the United States (US) and Europe, China is absorbing an increasing share of these exports. In recent years, over 60 percent of Africa's exports to China have consisted of oil and minerals.
Second, the influx of cheap Chinese imports into Africa has caused significant injury to local industry, with the impact varying in intensity across countries. Trade unions in Zambia have blamed Chinese imports for undermining the clothing and electrical sectors. In Ethiopia, while competition from Chinese shoe imports has forced the local footwear industry to innovate and upgrade, a number of producers have been squeezed out while surviving firms have contracted. Similarly, survey evidence from Mauritius shows that small- and medium-sized enterprises (SMEs) in the clothing, footwear and furniture sectors have borne the brunt of Chinese competition, being unable to match the price- quality ratio offered by Chinese products.
WHAT????? AFRICAN FOREIGN ECONOMIC ZONES PUSHING AFRICAN SMALL BUSINESS DOMESTIC ECONOMY DOWN? WHO WOULD HAVE THOUGHT THAT?
Third, African exporters of manufactures and processed goods have faced stiffer competition from China in their traditional export markets. In Mauritius, Swaziland and South Africa, the clothing industry suffered major setbacks in the run-up to January 1, 2005, marking the end of the apparel quotas and the beginning of Chinese dominance of the global apparel market. Specifically, more than 25,000 jobs (or 28 percent of employment) were lost in the Mauritian garment sector between 2001 and 2005 as foreign firms closed shop to locate elsewhere.
China's threat to African industry is significant, since China's comparative advantage lies in the same low-skill, labour-intensive and low-technology sectors, such as clothing, furniture and footwear, that offer the best chances for industrialisation in Africa. Some authors (e.g. Kaplinsky, 2008) have argued that China's global ascendancy can permanently damage the future of manufacturing in Africa.
Can Chinese SEZs help?
With the notable exception of Mauritius, Africa's performance with industrial development schemes, such as EPZs, has been lacklustre. The fact that the schemes were government led, marred with policy inconsistencies and failed to attract private investors - local or foreign - meant that they were bound to fail.
Against this background, the Chinese SEZs can be a harbinger of industrialisation in Africa - for at least two reasons. First, the SEZs propose investment in a wider range of sectors, spanning agro-industry, manufacturing and services (Table 1). These sectors will be new to the industrial landscape of most of the countries hosting the SEZs and will be particularly beneficial to Zambia, Nigeria and Ethiopia, which currently have very low levels of industrialisation.
Second, the SEZs are designed to be integrated into the domestic economy, as they are in China. The Chinese government has expressed its wish to transmit to Africa lessons from its own development experience as well as transfer through foreign direct investment (FDI) and aid much-needed knowledge and technology. The Chinese are also supporting African SMEs to develop their businesses in the zones through a USD 1 billion fund announced at the 2009 Forum on Africa China Cooperation (FOCAC).
The question then is how much of an impact will the SEZs (assuming they are successful) have on industrialisation in Africa?
We propose a two-tiered answer to this question. For the SEZs to have any long-term impact at all, they must first address the critical issues that have arisen in each country at the early stages of zone development. These relate to financing gaps and to policy incoherence. Construction works have often stalled owing to delays in the disbursement of loans, grants and subsidies promised by the Chinese government, and the zone developers' inability to raise funding of their own. Similar problems may also constrain subsequent FDI into the zones. Host-country governments, on the other hand, have encountered financial difficulties in providing offsite infrastructure or in refunding zone developers the agreed share of infrastructure costs, as in Ethiopia. Perhaps an even more important challenge is the lack of political will and/or the absence of a coherent incentive framework in the host country to support the SEZs. If the zones are not integrated into the country's national development strategy, they will struggle to achieve the desired impacts.
Beyond these constraints, the SEZs must attract a critical mass of investors, both domestic and foreign; develop linkages with the domestic economy; stimulate higher value-added manufacturing activities and generate significant productivity spillovers if they are to make a lasting impact on industrial development in Africa. However, significant challenges have emerged in each of these areas.
Investment
Zone developers are struggling to attract Chinese firms in the industries proposed, and the economic crisis has made matters worse. For example, the Mauritian zone has failed to attract a single Chinese investor two years after its completion, while the majority of companies operating in the Chambishi zone are merely subsidiaries of the developers. On the other hand, local participation in the SEZs is likely to be restricted by the reluctance of Chinese firms to seek joint ventures (both because of fundamental differences in the business models of Chinese and local firms and certain negative experiences (as in Egypt, w here Chinese developers have accused the local partners of embezzling funds)); by entry barriers, such as excessively high investment thresholds for local investors; by the lack of a supportive incentive framework at home; and, in the case of Mauritius, an outright ban on local investors' access to the zone.
Against this backdrop, it is interesting to note that a number of private Chinese industrial zones (in South Africa and Botswana, for example) are thriving. Even in the countries hosting SEZs, some Chinese investors are choosing to operate outside the zones (for example, Huajian Group, a Chinese footwear company, in Ethiopia) in an attempt to shun governmental control and to avoid high rent and utility costs in cases where the zones are underpopulated.
Domestic linkages
Prospects for the SEZs to build backward linkages within the local economy are rather weak both because the raw materials and intermediates needed in assembly-type operations may not be available locally and because of the known propensity of Chinese companies to source inputs through their own networks. At the same time, forward linkages, which usually involve the provision of ancillary services to the zones, may be constrained by deficient infrastructure and logistics and lack of competition in the host economy.
Higher value-added activities
The SEZs promised to bring new industrial activities as well as opportunities for higher value-added processing and upgrading to Africa. This is evident in the Chinese investment of USD 220 million in a copper smelter in the Zambian Multi-Facility Economic Zone in Chambishi. A bio-hydrometallurgy project, designed to increase the recovery of Zambian copper by 20 percent is being paraded as a model of technological collaboration between China and Zambia. However, beyond copper, there is no evidence that plans to manufacture televisions, mobile phones and other consumer electronics in the Chambishi zone have materialised yet.
The Chinese are already operating a cement plant in Ethiopia's Eastern industrial zone. Future investments are expected in the electric machinery and steel industries. But, these are yet to come, and emerging evidence suggests that the zone will feature mainly headquarter services. In Mauritius, the marginal impact of the proposed SEZs is likely to be smaller than elsewhere both because the country boasts a relatively diversified industrial base and because the Jin Fei zone will attract investments in sectors - such as property development, tourism and textiles - that are not strictly aligned with the country's future economic orientation.
Technology transfer
Finally, prospects for technology transfer are also limited - both because Chinese investments may not generate significant spillovers (since Chinese firms are notorious for protecting proprietary knowledge and keeping trade secrets) and because local firms may lack the capacity or "technological readiness" to adopt any spillover that does take place. Joint ventures are an excellent vehicle for technology transfer, but, as noted earlier, the Chinese are generally averse to partnerships with local firms. Similarly, the lack of a critical mass of local investors in the zones will substantially reduce the scope to benefit from any technology spillovers. Last, but not least, skill transfer through labour turnover might be limited if the zones employ few local workers and if these workers are concentrated in low-skill jobs.
What should host countries do?
There are several measures that policymakers in host countries can take to maximise the impact of the SEZs on industrial development. First, while African governments are providing an elaborate set of incentives to Chinese investors in the zones, few are actually subsidising local investors, and even fewer have put in place a regulatory framework to encourage local investors to set up in the zones, or local suppliers to provide inputs and services to SEZ firms. For the zones to succeed as a test case of industrialisation, it is crucial that the government fully ‘owns' the SEZs, believes in their potential and shows the political commitment to make them work. This requires that the zones be fully integrated into the country's development strategy and be seen as platforms for learning and technology transfer beyond their short-term impact on jobs.
Second, local ownership will be fostered if the host-country government has an equity stake in the zones. This can be justified against the numerous concessions made to the Chinese developers, including leases of land, provision of offsite infrastructure and offers of a whole range of alluring fiscal incentives at high opportunity cost to the host-country government. The Nigerian government successfully negotiated a stake in the two zones; this experience should guide future zone development elsewhere in Africa. However, excessive participation by national governments - as in Egypt's Suez zone - should be avoided, since this might lead to interference and inefficiencies in zone management.
Third, since local participation in the zones is critical to realising productivity spillovers, African governments must set up an incentive scheme - complementary to the USD 1 billion SME fund proposed by the Chinese government - to support local firms' investment in the zones. In addition, they must play a proactive role in selecting and promoting potential "winners" as was the case in East Asia.
Fourth, the industry focus of the SEZs should be negotiated between the host-country government and the Chinese stakeholders, rather than being "imposed" by the latter. This will ensure that the zones' activities are aligned with the country's needs in terms of industrial development and that any resulting technology spillover is more readily absorbed. Industries that are highly capital- or skill-intensive might contribute little to industrial upgrading in economies that are endowed with low-skilled labour and have had little experience with industry. In Mauritius, on the other hand, the industry focus is misplaced for the opposite reason. Mauritius needs high-tech industries, but the Jin Fei zone will serve mainly as a residential and commercial base for Chinese operations in the African region.
The systemic constraints to industrial development will take longer to tackle, but they must not be neglected. The SEZ host countries, both existing and potential, must invest in making local firms and the economy technology-ready. This calls for substantial investment in local universities and research institutions and the provision of incentives for firms to train their workers, adopt best management practices and to restructure and innovate.
Finally, the government should make greater efforts to address administrative and regulatory constraints to local supply-side capacity and provide a platform for Chinese companies and domestic firms to come together to learn about win-win partnerships or commercial opportunities. These measures will help strengthen potential linkages with the local economy.
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Greece as Italy was targeted for the worst of global banking 1% subprime mortgage frauds and sovereign debt frauds just to send this LEFT SOCIAL PROGRESSIVE CAPITALIST nation into the deepest of debt. The 99% of Greek citizens lost their homes, wealth, pensions, health care, and personal assets then most were sent packing as EX-PATS----just as is happening in ITALY, SPAIN, IRELAND-----those are the PIIGS European nations targeted by global banking loaded with the worst of sovereign debt. The rich of all these nations of course off-shored all their wealth while AUSTERITY KILLED the 99% of citizens.
Remember, the goal of ONE WORLD ONE GOVERNANCE is ONE DIGITAL CURRENCY with ONE WORLD CENTRAL BANK. Greece sadly has been used as a laboratory for all these criminal and corrupt banking policies. So, what we now see happening in Greece is international media telling the global 99% Greece has to go with digital currency in order to get itself out of debt.
THIS IS CURRENCY MANIPULATION AND IT IS BEING DONE BY WORLD BANK/IMF WITH EUROPEAN BANKING CREATING THE SOVEREIGN DEBT FRAUD.
As with all nations handed to WORLD BANK/IMF----they stay in debt for decades as financial 'solutions' drain 99% of citizens until FOREIGN ECONOMIC ZONES and societal transitions are installed. US is heading to bankruptcy by same sovereign debt frauds to be pushed into the hands of WORLD BANK/IMF.
The solution ---GET RID OF THE GIANT SQUID-------global banking
“There is a precedent for parallel currencies working,” said Hileman. “But the fundamental issue in Greece is the size of the debt and the fact that the economy is not growing, and you’ve got to find some way to in effect reduce that debt burden in Greece.”
Could a digi-drachma avert a Grexit?
Jemima Kelly5 Min Read
LONDON (Reuters) - Greek Finance Minister Yanis Varoufakis may have been joking when he tweeted about Greece adopting bitcoin, but some financial technology geeks say an asset-backed digital currency could be a solution to the country’s cash crisis.
Greece faces 1.5 billion euros of repayments to its creditors this month, having been locked in talks on a cash-for-reforms deal for months. Failure to agree could trigger a Greek default and potential exit from the euro zone, dealing a big blow to the supposedly irreversible currency union.
In order to avoid such a “Grexit” some reckon Greece could adopt a bitcoin-like parallel digital currency with which it could pay its pensioners and public-sector workers. It could be called the “digi-drachma”, after Greece’s pre-euro currency.
But unlike bitcoin, which is totally decentralized and given value simply by its usefulness, it would be issued by the state and backed with the country’s substantial assets.
“If you’ve got all these assets, why don’t you use them to back up a digital currency?” said Lee Gibson-Grant, founder of Coinstructors, a consultancy for those wanting to use bitcoin’s underlying technology — the blockchain — to start businesses.
If Greece’s assets could be tokenized and issued as a digital currency, argues Gibson-Grant, public-sector wages and pensions could be paid with it. That would preserve scarce euros for repaying the country’s creditors and help avoid a sell-off of valuable assets at rock-bottom prices.
Varoufakis himself, who on April 1 tweeted a link to a satirical story that reported him as saying Greece would adopt bitcoin if a deal with its creditors could not be reached, blogged in 2014 about the possibility of a parallel “Future Tax (FT) coin”.
The FT coin, said Varoufakis, an academic economist whose radical-left Syriza party was then not yet in government, would be denominated in euros but backed by future tax revenues.
ONLY THE FAR-RIGHT WING WOULD CREATE CURRENCY ON ACCESSIBLE THROUGH INTERNET CORPORATIONS. THIS IS NOT A RADICAL LEFT PARTY.
It would use a “bitcoin-like algorithm in order to make the system transparent, efficient and transactions-cost-free” and could provide “a source of liquidity for the governments that is outside the bond markets”.
IOU CURRENCY
Greece’s radical left is not alone in having considered a parallel currency. The European Central Bank has analyzed a scenario in which Greece pays civil servants with IOUs, which would rely on future tax revenue in a similar way to the FT coin, creating a virtual second currency in the euro bloc.
WHAT A COINCIDENCE---THE RADICAL 'LEFT' HAS THE SAME DIGITAL CURRENCY GOALS AS FAR-RIGHT WING GLOBAL BANKING 1%!
ECB experts decided it would not work, as public sector workers would receive payment in the IOU currency rather than in euros, putting further pressure on Greek banks because those workers were likely then to plunder their savings.
Furthermore, the basis for both such ideas relies on an implicit assumption that the Greek state will not collapse — by no means guaranteed in the current climate.
“This would be different to a distributed, trustless digital currency such as bitcoin, since holders would still have to trust the issuer,” said Tom Robinson, Chief Operating Officer at London-based bitcoin storage firm Elliptic.
For Garrick Hileman, an economic historian at the London School of Economics who specializes in alternative currencies, the problem with such a plan is that it does not deal with Greece’s most basic problem: the need to reduce its debt burden.
“There is a precedent for parallel currencies working,” said Hileman. “But the fundamental issue in Greece is the size of the debt and the fact that the economy is not growing, and you’ve got to find some way to in effect reduce that debt burden in Greece.”
If a digital currency has no place in a solution for Greece, the blockchain technology behind bitcoin — a globally distributed ledger of all of bitcoin’s transactions that is evolving beyond the world of digital currencies — might do.
The government of Honduras, for example, has recently gone into partnership with Texas-based technology firm Factom to build a secure and immutable land title record system using the blockchain to mitigate against fraud. And CEO Peter Kirby reckons Greece could use a similar system to deal with its tax-dodgers.
“With a true global distributed ledger that basically keeps track of everything that happens, you can start putting a lot more transparency into the way the Greek government does its business,” Kirby said.
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American citizens especially in Baltimore have seen these economic structures pushed in preparation for the coming economic collapse of the US DOLLAR. Greek citizens not only lost all their wealth and assets---they lost their CURRENCY. Media tells us Greek citizens are racing to install DIGITAL CURRENCY but of course they are not ----it is being forced on them by WORLD BANK/IMF.
CURRENCY MANIPULATION WAS DONE BY GLOBAL BANKING 1% THESE FEW DECADES OUT OF CHINA----NOW THEY ARE BEHIND THESE CURRENCY MANIPULATIONS AS WELL.
All of this planned from 1960s-70s by ROBBER BARON global 1% put into action by CLINTON/BUSH/OBAMA.
BITCOIN is not that ONE WORLD ONE DIGITAL CURRENCY. It is simply yet another product created to fail with losses to those investing and using these products.
Our US 5% to the 1% black, white, and brown pols and players think all this is FUNNY. They are living for today not caring that our US 99% are MOVING FORWARD to same Greek economic disaster.
Trading Meat for Tires as Bartering Economy Grows in Greece
By LIZ ALDERMANSEPT. 21, 2015
ATHENS — Thodoris Roussos stood in his butcher’s shop and pointed to a large white delivery truck at the curb. For months, he had put off replacing the tires, because Greece’s financial crisis had cut into business. But recently, he upgraded the van with a set of good wheels at a price that could not be beat.
“Normally, the tires cost 340 euros, but no money changed hands,” Mr. Roussos said, beaming. “I paid the guy in meat.”
As Greece grapples with a continued downturn, bartering is gaining traction at the margins of the economy, part of a collection of worrisome signs for Prime Minister Alexis Tsipras who was re-elected on Sunday.
Graphic artists are exchanging designs for olive oil. Accountants swap advice for office supplies. In the agricultural heartland and on the Greek islands, informal bartering, which has historically helped communities survive, has intensified as more people exchange fruits, vegetables, other crops, equipment, clothing and services.
“In Greece there’s a major liquidity problem,” said Mr. Roussos, who met the tire vendor and scores of new clients through an Athens-based online barter club, Tradenow, which created its own currency called tradepoints. “People are finding it more convenient to trade because money is not readily available.”
The bartering activity remains modest and will not provide a lasting solution to Greece’s problems, which remain a politically volatile and tricky issue for the new coaltion government. But such efforts represent an opportunity for Greeks to navigate the uncertainty, as the country still faces capital controls and a shaky banking system.
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If US 99% of WE THE PEOPLE are made to poor to consume creating the reasons for decline of Chinese EXPORTS to US-----one Chinese EXPORT is soaring------those 99% global labor pool being sent to African, European, and US FOREIGN ECONOMIC ZONES and NO, the Chinese government does not care how they are treated because no one can treat them worse than global Chinese factories inside FOREIGN ECONOMIC ZONES.
Humans as slaves are less monetary assets as bartering assets. The Philippines and other third world nations have been exporting their 99% of citizens to Foreign Economic Zones for revenue often exchanged in products. China will see its EX-PAT population soar to fill expanding Chinese global factories -----who need money when living in global factories working for a bed and meal?
CHINA IS CREATING ITS DIGITAL CURRENCY AND WE CAN BET IT WILL END BEING ONE WORLD ONE CENTRAL BANK DIGITAL CURRENCY.
MOVING FORWARD entails a great amount of human capital as slave labor----no currency needed. This is yet another CURRENCY MANIPULATION for modern history as labor especially in Western nations has come with wages. CLINTON/BUSH/OBAMA created this massive global human capital distribution network that will explode as Africa, Europe, Canada, and US are destinations for slave labor AND having sovereign US citizens becoming that global labor pool export.
Asia Pacific |
Uneasy Engagement
China’s Export of Labor Faces Scorn
By EDWARD WONGDEC. 20, 2009
TRUNG SON, Vietnam -- It seemed as if this village in northern Vietnam had struck gold when a Chinese and a Japanese company arrived to jointly build a coal-fired power plant. Thousands of jobs would start flowing in, or so the residents hoped.
Four years later, the Haiphong Thermal Power Plant is nearing completion. But only a few hundred Vietnamese ever got jobs. Most of the workers were Chinese, about 1,500 at the peak. Hundreds of them are still here, toiling by day on the dusty construction site and cloistered at night in dingy dormitories.
“The Chinese workers overwhelm the Vietnamese workers here,” said Nguyen Thai Bang, 29, a Vietnamese electrician.
China, famous for its export of cheap goods, is increasingly known for shipping out cheap labor. These global migrants often work in factories or on Chinese-run construction and engineering projects, though the range of jobs is astonishing: from planting flowers in the Netherlands to doing secretarial tasks in Singapore to herding cows in Mongolia — even delivering newspapers in the Middle East.
But a backlash against them has grown. Across Asia and Africa, episodes of protest and violence against Chinese workers have flared. Vietnam and India are among the nations that have moved to impose new labor rules for foreign companies and restrict the number of Chinese workers allowed to enter, straining relations with Beijing.
In Vietnam, dissidents and intellectuals are using the issue of Chinese labor to challenge the ruling Communist Party. A lawyer sued Prime Minister Nguyen Tan Dung over his approval of a Chinese bauxite mining project, and the National Assembly is questioning top officials over Chinese contracts, unusual moves in this authoritarian state.
Chinese workers continue to follow China’s state-owned construction companies as they win bids abroad to build power plants, factories, railroads, highways, subway lines and stadiums. From January to October 2009, Chinese companies completed $58 billion of projects, a 33 percent increase over the same period in 2008, according to the Chinese Ministry of Commerce.
From Angola to Uzbekistan, Iran to Indonesia, some 740,000 Chinese workers were abroad at the end of 2008, with 58 percent sent out last year alone, the Commerce Ministry said. The number going abroad this year is on track to roughly match that rate. The workers are hired in China, either directly by Chinese enterprises or by Chinese labor agencies that place the workers; there are 500 operational licensed agencies and many illegal ones.
Chinese executives say that Chinese workers are not always less expensive, but that they tend to be more skilled and easier to manage than local workers. “Whether you’re talking about the social benefits or economic benefits to the countries receiving the workers, the countries have had very good things to say about the Chinese workers and their skills,” said Diao Chunhe, director of the China International Contractors Association, a government organization in Beijing.
But in some countries, local residents accuse the Chinese of stealing jobs, staying on illegally and isolating themselves by building bubble worlds that replicate life in China.
“There are entire Chinese villages now,” said Pham Chi Lan, former executive vice president of the Vietnam Chamber of Commerce and Industry. “We’ve never seen such a practice on projects done by companies from other countries.”
At this construction site northeast of the port city of Haiphong, an entire Chinese world has sprung up: four walled dormitory compounds, restaurants with Chinese signs advertising dumplings and fried rice, currency exchanges, so-called massage parlors — even a sign on the site itself that says “Guangxi Road,” referring to the province that most of the workers call home.
One night, eight workers in blue uniforms sat in a cramped restaurant that had been opened by a man from Guangxi at the request of the project’s main subcontractor, Guangxi Power Construction Company. Their faces were flushed from drinking Chinese rice wine. “I was sent here, and I’m fulfilling my patriotic duty,” said Lin Dengji, 52.
Such scenes can set off anxieties in Vietnam, which prides itself on resisting Chinese domination, starting with its break from Chinese rule in the 10th century. The countries fought a border war in 1979 and are still engaged in a sovereignty dispute in the South China Sea.
Vietnamese are all too aware of the economic juggernaut to their north. Vietnam had a $10 billion trade deficit with China last year. In July, a senior official in Vietnam’s Ministry of Public Security said that 35,000 Chinese workers were in Vietnam, according to Tuoi Tre, a progressive newspaper. The announcement shocked many Vietnamese.
“The Chinese economic presence in Vietnam is deeper, more far-reaching and progressing faster than people realize,” said Le Dang Doanh, an economist in Hanoi who advised the preceding prime minister.
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Here are those ROBBER BARON global banking 1% Clinton neo-liberal pols all of which have been in Congress long enough to vote for all of GATT, NAFTA, TARIFF LAWS creating these trade deficits killing US manufacturing-----they here are TAKING A STAND against all that policy they installed and from which they each were made RICH.
ECONOMIC POLICY INSTITUTE as we said is a far-right wing global banking 1% think tank----they will never educate how currency manipulation stems from US corporations in overseas Foreign Economic Zones------wanting cheap raw materials from US sent to be used by contracted Chinese factories to build those global corporate products. REID, PELOSI, SCHUMER top guns at ROBBER BARON few decades.
To end currency manipulation that harms 99% US WE THE PEOPLE----we simply stop allowing all domestic economies die----taken completely by global trade----rebuild local small business economies not NEEDING ANY trade deals. Certainly we do not want to MOVE FORWARD global human capital distribution system filling our US cities deemed Foreign Economic Zones---creating super-sized CURRENCY MANIPULATION.
The Democrats are making a stand on currency manipulation — and it's a really good idea
Jeff Spross
April 27, 2015
It's down to the wire, but Democrats appear to finally be getting serious about making sure the Trans-Pacific Partnership deal — a massive trade pact between the U.S. and 11 other Pacific Rim nations — is worker-friendly. And if it isn't, it may not happen at all.
OH, REALLY?????
At issue is what's called trade promotion authority — or "fast track" authority — which would give the president the ability to negotiate trade deals with other countries with some minimal criteria from Congress. Then the deal would be approved or rejected by the legislature in a simple up-or-down vote.
On Wednesday, Nancy Pelosi, the leader of the Democrats in the House, threw her weight behind an alternative version of fast track authority that comes with more serious strings: It would create an advisory board to ensure the White House has met certain criteria in the TPP deal, including labor and environmental protections.
But most importantly, the Democrats' alternative would require the TPP to include rules against currency manipulation by the member countries.
Currency manipulation is when governments engage in policies that drive down the value of their currency relative to other currencies. And lately, "other currencies" has usually meant the U.S. dollar. This makes our exports more expensive, and their imports cheaper, which drives up the U.S. trade deficit.
In practical terms, this means that demand, which could be staying in the U.S. economy and creating jobs, is instead leaving to create jobs in other countries' economies. At the moment, the trade deficit is somewhere in the vicinity of $500 billion, which amounts to about 3 percent of the economy just getting sucked up into the ether every year. That costs American jobs. But because the jobs lost are disproportionately in exporting industries like manufacturing — and because a high-value dollar helps low-wage employers, like Walmart, that have invested in low-cost foreign supply chains — the trade deficit also drives down wages, speeding up the "hourglass" effect, in which our economy produces lots of high-paying and low-paying jobs, but fewer and fewer middle-income jobs.
The latest work on the U.S. trade deficit, by Fred Bergsten and Joseph Gagnon, suggests currency manipulation could account for anywhere between $200 billion to $500 billion of the trade deficit — a little less than half, to nearly all of it.
With those numbers, the Economic Policy Institute (EPI) projected that eliminating currency manipulation could create anywhere from 2.3 million to 5.8 million American jobs. In February of 2014, EPI estimated that job creation would close one-third to three-fourths of the hole blown in the American economy by the 2008 collapse. (It might close it even further now, given the strong job growth we saw in the past year.) Furthermore, those job gains would be spread across every state and they would reduce the federal budget deficit, since the government would need to borrow less to make up the lost demand. In fact, in terms of impact on the economy, the importance of the trade deficit swamps the federal government's budget deficit.
OH, REALLY????
Economists who support putting currency manipulation rules in the TPP also think there's a pretty simple definition that teases out the manipulation from other legitimate policies that also happen to affect currency values. "That is the use of domestic government or government-controlled resources to buy assets denominated in foreign currencies," said Robert Scott, an economist with EPI. "If you look at the foreign currency holdings of the Federal Reserve, they're trivial — a few tens of billions of dollars. Officially, in the Japanese central bank, they're about $1.4 trillion. So that's a bright line."
For example, when the U.S. Federal Reserve engaged in quantitative easing to try to boost the economy, it mainly did it by buying up assets denominated in our own currency. That would pass muster under this definition, even though the policy did put downward pressure on the U.S. dollar. Had the Fed done it by buying up assets in foreign currencies, that would've been another matter.
Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, has also endorsed this approach, and pointed to Bergsten's suggestion that the line be drawn at holding enough assets in a foreign currency to cover one year's worth of external liabilities, and no more. The idea is that foreign governments would need to divest holdings to get below that threshold, and if they got above it again, certain penalties would hit: taxes, fines, cancelation of certain trade privileges, or even allowing reciprocal currency intervention by other countries.
CENTER ON BUDGET AND POLICY PRIORITIES IS A FAR-RIGHT WING GLOBAL BANKING 1% NEO-LIBERAL THINK TANK.
For the moment, about 20 countries, including China, have been buying up assets in foreign currencies at a rate of about $1 trillion per year, using their central banks and other institutions like government-controlled wealth and pension funds.
Administration officials and other observers seem pretty sure that demanding rules on currency manipulation would kill the TPP. But the deal is probably among the last opportunities to set the rules of the road for international trade; China isn't part of the TPP discussions, but the deal will definitely set the terrain for future negotiations. So risking the whole deal to force a reckoning on currency manipulation, as well as other protections for workers, makes sense — especially given that powerful corporations will make out like bandits under the TPP's likely expansion of intellectual property law.
Along with Pelosi, other top Democrats in the House and Senate — including Sens. Harry Reid and Chuck Schumer -- are on record opposing the current approach to the TPP and fast track authority. That not only puts them at odds with mainstream Republicans, but with a massive lobbying blitz by the Obama administration as well.
OH, REALLY AGAIN??????
The White House's preferred version of fast track authority has made it through several committees, but it still needs its final vote in both the House and the Senate. With a fair number of Tea Party Republicans also in revolt, the White House and its GOP allies will need all the votes they can muster.
If Pelosi and the other Democrats hold firm, they could yet force a set of reformed fast track and TPP agreements on their terms.
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