tag:blogger.com,1999:blog-4528146969570948529.post1979355584537825828..comments2024-03-21T22:51:03.977-04:00Comments on Models & Agents: China can avoid becoming JapanChevellehttp://www.blogger.com/profile/10769905202655777736noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4528146969570948529.post-70569377517506676612010-04-26T15:42:33.327-04:002010-04-26T15:42:33.327-04:00I think that a valuation of the renmibi will incre...I think that a valuation of the renmibi will increase local demand mostly of goods made in China and not that much of imports. Increaseing wages will naturally shifts up consumer and asset prices. <br />There are various possibilities of what might happen. Increased local demand might create bigger economies of scale for industries there!! this might be or might not be greater than the loss of the competitiveness effect for now facing costlier exports. In the case of Japan that had the chance to developed itself fully before devaluating, its people had little incentive to consume more Japanese goods than they were already consuming, and their exports were already not so much cost dependent(had already developed other advantages like quality or functionality), therefore their export ability was more likely to remain competitive than in Chinas case. And they had a bigger upward pressure on asset instead of consumer inflation. <br /><br /> So here lies the first difference between Japan and China: The competitive products that will not be exported might gradually be consumed locally in China,at least to some extent, whereas in Japan the competitive products will surely continue to be exported reducing JAPAN CO profits but increased local demand more likely to go to Asset inflation. <br /><br />There are less chances for China to form up a bubble economy then( even thought there ARE still chances, and for other reasons too), yet there is a higher uncertainty for China to remain as competitive, than was the case of Japan. Chinese could also, learn from Japan and reduce the chances of asset inflations to go to bubbles by sterilizing this local demand away from speculative assets (at least locally). Or who knows maybe military buildup.Anonymoushttps://www.blogger.com/profile/05150259396962831671noreply@blogger.comtag:blogger.com,1999:blog-4528146969570948529.post-8736765063249056602010-04-26T08:14:58.899-04:002010-04-26T08:14:58.899-04:00You wrote this blog very nice . I'm flattered....You wrote this blog very nice . I'm flattered. Well. thanks.....Japan Email Listhttp://www.trackibd.com/EMAIL-LISTS/japan-business-executives-email-lists.aspnoreply@blogger.comtag:blogger.com,1999:blog-4528146969570948529.post-82077435000909050422010-04-26T07:07:22.515-04:002010-04-26T07:07:22.515-04:00You wrote this just for me, didn't you? That&...You wrote this just for me, didn't you? That's nice of you. I'm flattered. Well... maybe I flatter myself, but thanks. Really. <br /><br />Still, I fail to see how a nearly non-existant service sector can pick up the slack for the reduction that would occur in the tradable sector given a currency revaluation. Exactly which of those new jobs would lead to rising real wages and increased internal demand? Law? Banking? Business consulting? My God. We don't want to wish that on them. And how long would it take to develop that? And the effect of reducing the profitability of export industries would be felt immediately. <br /><br />It would be much more prudent of the Chinese to address those other distortionary policies first. MarcoPolohttps://www.blogger.com/profile/03352448231722876114noreply@blogger.com