Comments on: A tale of two Asias: China, and almost everyone else http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/ Sat, 07 Nov 2009 04:45:11 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: flow5 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109903 flow5 Wed, 09 Jul 2008 20:00:34 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109903 How Long Can the Unsustainable U.S. Current Account Deficit Be Sustained? July 08 http://www.federalreserve.gov/pubs/ifdp/2008/935/default.htm How Long Can the Unsustainable U.S. Current Account Deficit Be Sustained? July 08

http://www.federalreserve.gov/pubs/ifdp/2008/935/default.htm

]]> By: China Supertrends » Blog Archive » Hot or Not: China’s exporters face new bureaucracy to slow foreign capital inflows http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109434 China Supertrends » Blog Archive » Hot or Not: China’s exporters face new bureaucracy to slow foreign capital inflows Thu, 03 Jul 2008 16:06:11 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109434 [...] Brad Setser mentioned recently (and in this older post), there is likely an under-stating of the true amount of the increase in [...] [...] Brad Setser mentioned recently (and in this older post), there is likely an under-stating of the true amount of the increase in [...]

]]> By: RebelEconomist http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109183 RebelEconomist Fri, 27 Jun 2008 18:15:28 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109183 Judy, The same as our motorcycle industry. Some iconic models (eg mini, jaguar e-type etc) but let down by quality and efficiency. Endless strikes and pleas for protection and bailouts until Mrs Thatcher let it go. My first car was a mini; had a VW ever since! For me the telling fact is, how do your goods sell in non-competitor export markets. There used to be lots of British cars in India, Middle East etc; now you hardly see any. You can't blame protectionism for that. You do see Mercedes everywhere! The dollar is cheap vs the sterling and the euro, but you see very few American-made cars here. What I find interesting though is that Ford in Europe have made some good cars (eg the Focus) that did not transfer to the US. I think that it is partly a question of American preferences and partly the complacency of an industry used to making good margins on heavy, inefficient vehicles. Judy,

The same as our motorcycle industry. Some iconic models (eg mini, jaguar e-type etc) but let down by quality and efficiency. Endless strikes and pleas for protection and bailouts until Mrs Thatcher let it go. My first car was a mini; had a VW ever since!

For me the telling fact is, how do your goods sell in non-competitor export markets. There used to be lots of British cars in India, Middle East etc; now you hardly see any. You can’t blame protectionism for that. You do see Mercedes everywhere!

The dollar is cheap vs the sterling and the euro, but you see very few American-made cars here. What I find interesting though is that Ford in Europe have made some good cars (eg the Focus) that did not transfer to the US. I think that it is partly a question of American preferences and partly the complacency of an industry used to making good margins on heavy, inefficient vehicles.

]]> By: Judy Yeo http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109158 Judy Yeo Fri, 27 Jun 2008 11:26:24 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109158 Brad To the nation accumulating reserves, the only problem usually lies in a decline in reserves or lack of. To Asians, after the horror of the 90s, the more the better, after all, reserves are reserves, not exactly anything that needs to be paid back. Rebel Wonder what you thought of the British car industry? As for Japanese and German investment in the USA to produce fuel efficient cars, why? Is it beyond American automotive industry to do so on their own? Brad
To the nation accumulating reserves, the only problem usually lies in a decline in reserves or lack of. To Asians, after the horror of the 90s, the more the better, after all, reserves are reserves, not exactly anything that needs to be paid back.

Rebel

Wonder what you thought of the British car industry?

As for Japanese and German investment in the USA to produce fuel efficient cars, why? Is it beyond American automotive industry to do so on their own?

]]> By: bsetser http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109151 bsetser Fri, 27 Jun 2008 04:54:35 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109151 between 10 and 15% -- and i would bet on a number closer to 15% than 10%. see ted truman's various papers with anna wong. between 10 and 15% — and i would bet on a number closer to 15% than 10%. see ted truman’s various papers with anna wong.

]]> By: Howard Richman http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109150 Howard Richman Fri, 27 Jun 2008 04:40:45 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109150 Oh, I forgot about the euros! My impression, based upon no evidence whatsoever, was that their forex was almost entirely dollars. What's your guestimate of the proportion that's euros? Howard Oh, I forgot about the euros! My impression, based upon no evidence whatsoever, was that their forex was almost entirely dollars. What’s your guestimate of the proportion that’s euros?

Howard

]]> By: Howard Richman http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109149 Howard Richman Fri, 27 Jun 2008 04:38:11 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109149 Don, What I am saying in #24 is that you are likely correct. The Japanese government has been intervening to support the Japan Carry Trade. Howard Don,

What I am saying in #24 is that you are likely correct. The Japanese government has been intervening to support the Japan Carry Trade.

Howard

]]> By: bsetser http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109148 bsetser Fri, 27 Jun 2008 04:37:28 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109148 Howard -- Japan's reserves rose during that period for all 3 reasons I mentioned: interest income (not small on $900b), fx valuation gains (japan has some euros) and bond valuation gains (us rates fell, and japan has some long-term bonds which rise in value when rates go down). Basically, they had a fairly conservative portfolio that paid off in a crisis environment. No outright intervention. I'll grant that expectations matter and there is an expectation in the market that at some point japan would intervene to cap yen strength, and i'll grant that not selling the interest income is a choice that has some intervention like aspects. but in terms of outright purchases in the fx market, japan hasn't been active. Howard — Japan’s reserves rose during that period for all 3 reasons I mentioned: interest income (not small on $900b), fx valuation gains (japan has some euros) and bond valuation gains (us rates fell, and japan has some long-term bonds which rise in value when rates go down). Basically, they had a fairly conservative portfolio that paid off in a crisis environment. No outright intervention. I’ll grant that expectations matter and there is an expectation in the market that at some point japan would intervene to cap yen strength, and i’ll grant that not selling the interest income is a choice that has some intervention like aspects. but in terms of outright purchases in the fx market, japan hasn’t been active.

]]> By: Howard Richman http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109147 Howard Richman Fri, 27 Jun 2008 04:35:02 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109147 (I meant because of the "rising" yen of the past year, not because of the "falling" yen of the past year.) (I meant because of the “rising” yen of the past year, not because of the “falling” yen of the past year.)

]]> By: Howard Richman http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109146 Howard Richman Fri, 27 Jun 2008 04:27:28 +0000 http://blogs.cfr.org/setser/2008/06/25/a-tale-of-two-asias-china-and-almost-everyone-else/#comment-109146 Brad, You wrote: "the increase in japan’s reserves since 04 has been entirely due to: (a) currency valuation effects, (b) bond valuation effects ..., and (c) accumulated interest income." You are clearly correct as far as the period from March 2004 to March 2007 is concerned. But with the falling yen of the past year, I believe that Japan has resumed its currency interventions. I just looked more closely at the Japanese foreign exchange data which can be found month by month since April 2000. I refer to data that can be found if you go to the following IMF website and then click on "CSV" to download the spreadsheet: http://internationalmonetaryfund.com/external/np/sta/ir/jpn/eng/curjpn.htm#I If I am reading this data correctly (i.e. looking at the third row), in March 2007 they had foreign exchange reserves worth $889 million but in March 2008, the month that turned around the strengthening yen, they had foreign exchange reserves worth $988 million. That's an 11% rise in just one year, a year in which many of those lending to America took huge losses due to the crash of the subprime market. Howard Brad,

You wrote: “the increase in japan’s reserves since 04 has been entirely due to: (a) currency valuation effects, (b) bond valuation effects …, and (c) accumulated interest income.”

You are clearly correct as far as the period from March 2004 to March 2007 is concerned. But with the falling yen of the past year, I believe that Japan has resumed its currency interventions.

I just looked more closely at the Japanese foreign exchange data which can be found month by month since April 2000. I refer to data that can be found if you go to the following IMF website and then click on “CSV” to download the spreadsheet:

http://internationalmonetaryfund.com/external/np/sta/ir/jpn/eng/curjpn.htm#I

If I am reading this data correctly (i.e. looking at the third row), in March 2007 they had foreign exchange reserves worth $889 million but in March 2008, the month that turned around the strengthening yen, they had foreign exchange reserves worth $988 million. That’s an 11% rise in just one year, a year in which many of those lending to America took huge losses due to the crash of the subprime market.

Howard

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