China undervalues its currency in order to gain competitive advantage around the world. Everyone understands that and it needs to change, but the question in the United State is how to effectively change it. The Obama administration is taking the gradual approach:
The Obama administration on Tuesday declined to label China a currency manipulator after seeing recent increases in the value of the yuan compared to the dollar.
The decision angered some manufacturing groups, which have accused Beijing of artificially holding down the value of its currency to gain trade advantages. A cheaper yuan makes Chinese goods less expensive when they are shipped to the United States. It also makes U.S. goods more expensive in China. Both could increase the U.S. trade deficit with China, which is on pace to hit a record high this year.
The Treasury Department said the yuan has appreciated 12 percent against the dollar in the past 18 months, after adjusting for inflation. In addition, the department said in a semi-annual report that China promised at two high-level meetings last month to make the yuan’s exchange rate more flexible.
Still, yuan is “substantially undervalued” and its appreciation “is insufficient and more progress is needed,” the report noted. The department will “press for policy changes that yield greater exchange rate flexibility” and “level the playing field.”
This will likely end up being a campaign issue as Mitt Romney and other GOP candidates are hammering Obama over China. But progress is being made.
Las Vegas casinos used to feast on Asian gamblers. Often, these were the “whales” – otherwise known as high rollers – that the casinos would rely upon to rack up huge profits from their casino operations.
The popularity of casino games is huge. People love playing online and they also love the atmosphere of a casino. This has always been a hallmark of the Asian culture, and Chinese tourists were becoming a huge growth opportunity for the Vegas casinos.
But all of that is changing due to two very powerful forces. One was the financial crisis which decimated the Vegas casinos. Everyone was affected, including Chinese tourists. Now the crowds are coming back to Vegas, but there is still a problem as there are fewer Asian high rollers.
And that’s due to the second factor – the emergence of Macau in China as a gambling destination. The casinos there are bigger than those in Vegas and the gambling volume has surpassed Las Vegas. Chinese whales now can stay on their own continent and get the same kind of thrill from progressive jackpot slots or hours of blackjack. They don’t have to look to Vegas as the best option.
This trend is having a huge impact on Chinese tourism, so it will be interesting to see how it plays out.
Is China fighting a losing battle with its ridiculous censorship crusade?
Authoritarian governments need to control information to control their population, so none of this nonsense is a surprise. Now the Chinese are extending this strategy to movies:
China has proposed a new law to ban film content which it deems to disturb social stability or promote religious fanaticism.
The Movie Industry Promotion Bill would also forbid foreign firms or individuals from filming without a government-sanctioned partner.
Correspondents say this is part of an overall tightening of China’s grip over its cultural industries.
China has long banned the screening of films deemed politically sensitive.
And some film-makers have steered clear of controversial issues likely to upset the authorities, observers say.
But this draft bill adds even more categories open to censorship. It states that films must not harm national honour and interest, incite ethnic hatred, spread “evil cults” or superstition, or propagate obscenity, gambling, drug abuse, violence or terror.
The Chinese are trying their best with this despicable strategy, but can this work in a modern world where we have social media and mobile phones? Have they seen what’s going in with the Arab Spring and now even in Russia?
For example, if people want mobile gambling apps, they are going to get them. But the same phones that permit this technology can also be used for social networking, sharing photos, videos and protest ideas.