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Coming Asia Century; Rise Of China,India,Japan

TuskCracker

後輩
17 Jan 2004
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-> I see some problems with this

-> But here it is anyways


A Campaign That Failed
By Jim Hoaglan
Sunday, October 31, 2004; Page B07

Rip Van America will soon awake in a world that changed as the campaign spun. After a yearlong political binge that has consumed billions of dollars, oceans of national energy and attention, and the credibility of the country's two major political parties, old Rip has adjustments to make.

Peering out through a pulsating election hangover, Rip will perceive that while the United States was so self-absorbed, China accelerated its breathtaking run to become a global financial center, the world's manufacturing hub and the price-setting consumer of oil and other commodities.

.. on and on

China, India and Japan have been creating an economic platform to make
this the Asian century, while U.S. resources, manpower and policy initiatives
have been poured into the dangerous conflicts of the greater Middle East.


http://www.washingtonpost.com/wp-dyn/articles/A10801-2004Oct29.html
 
America needs to stop screwing around and fix its educational system. If we become more intelligent than our competitors we'll pretty much win the race. Then again if there is a landmine waiting at the finish line, sometimes it isn't the best thing to win the race. I just want the American educational system to succeed past the Asian educational system. There are a lot of things people can do in America to go past our competitors, yet the government won't do anything so the people have to. This is what JFK was talking about.
 
hmm, I don't even know if the education level will help us Americans. The whole deal with China is that they will have unlimited capacity of low wage workers, and now with their implementation of privatization in their businesses, China's chances of becoming the next Economic super power is increasing drastically. As you know in the U.S. many companies are outsourcing to cuts their costs. However, in China with all the capcity they have to produce goods at marginally low costs, it is going to be hard for the U.S. to compete. Right now, oil prices are on the rise, and most would like to say that OPEC is taking advantage of people (which probably they are a little), China is using higher level of amounts of oil. Therefore, since the demand is greater, obviously the price is going to rise as well. Although America has quite a deficit, we are still surviving none the less. The reason for this is that the amount of FDI in the U.S. is absurd. It seems that these countries know investing in treasury bonds in the US will eventually payoff a handsome profit. This process of becoming more powerful economically is not going to happen over night. Of course, it going to take years to acomplish such a feat. However, some people are saying in maybe 70 years down the road, the Chinese currency will become the world currency. The value of the dollar is slowly decreasing, so that's not a positive thing either. It seems that the U.S. is going to need a lot more than just a highly educated workforce to compete, but we will have to see..... that's what I think anyways....
 
Here is an article that I read in the Wall Street Journal today, that maybe can support some of the aspects in my earlier post:


Bush Policy:
Talk a Strong Dollar
But Let It Slide
Tacitly Approved, Decline
In Currency Aids Trade Gap
While U.S. Works on Yuan

By GREG IP
Staff Reporter of THE WALL STREET JOURNAL
November 10, 2004; Page A1

The Bush administration, which officially professes a "strong dollar" policy, is quietly acceding to the dollar's slide on global currency markets.

Indeed, government and Federal Reserve officials and many private economists believe the economic fundamentals point to a lower dollar. But Washington doesn't want to encourage the decline or say anything that might undermine confidence in the dollar and risk a disruptive avalanche of dollar-selling.

The result has been a delicate minuet, in which administration officials speak gingerly if at all about the dollar and instead devote their energy toward another, related issue: China's currency, the yuan. China pegs the yuan to the dollar and the U.S. wants China to let it float, which would almost certainly cause it to rise against the dollar. Without yuan appreciation, U.S. officials fear that currencies in Europe and Japan would bear the brunt of the dollar's depreciation, hurting their exports and restraining their already-weak economies.

European Central Bank President Jean-Claude Trichet this week called the euro's rise "brutal," and Japanese officials have hinted they may resume large-scale intervention to hold the yen's value down.

Since Election Day, the dollar has fallen 1.4% to an all-time low against the euro. Its value against all its trading partners' currencies has declined 1.2%, and it is now down 6% since May. The dollar is down 8% against the euro in the same period and 7% against the yen.
LOSING CURRENCY
[Losing Currency]
Find out what the dollar's weakness means for individuals, companies and the economy, in a plus-or-minus rundown.




The catalyst for its most recent decline was President George W. Bush's re-election last Tuesday. Investors perceive his policies as likely to aggravate the steep U.S. budget deficit.

The dollar's weakness comes against some otherwise favorable news: strong job growth and expectations of higher interest rates. The Fed is expected today to lift its short-term interest-rate target to 2% from 1.75%.

This week, Treasury spokesman Rob Nichols reiterated that the administration supports a strong dollar. Yet in October, the U.S. joined the six other major industrial countries in asserting that "exchange rates should reflect economic fundamentals," though they opposed excessive "volatility."

The fundamentals almost certainly would result in a lower U.S. dollar. Americans don't earn or save enough to finance all their consumption and investment needs plus the federal deficit. Thus, they must borrow from foreigners to finance the shortfall. That has driven the U.S. current-account deficit, the gap on all trade and investment income between the U.S. and the rest of the world, to more than an estimated $600 billion this year, or 5.4% of the gross domestic product. That must be financed by selling stocks, bonds or other IOUs to foreigners. But as foreigners accumulate dollar assets, they may lose their appetite for more, leading to downward pressure on the dollar. The prospect of continued budget deficits, several economists say, has fueled that concern.

U.S. and foreign policy makers agree there are three main ways the current-account deficit could be narrowed. The U.S. could save more, such as by cutting its budget deficit. Foreign countries could grow faster, increasing their appetite for U.S. exports. Or the dollar could fall. That would make U.S. exports cheaper in foreign markets, enabling it to sell more, while making imports costlier, decreasing U.S. consumption of them. Together, that would narrow the trade deficit and thus the current-account deficit. European and U.S. policy makers mostly advocate the first two methods, but also realize that the lower dollar will play a part. A lower dollar, by raising import prices, could raise inflation and thus force the Fed to raise interest rates more, curbing U.S. consumption of domestically produced and imported goods.

The awkward task facing the administration is letting the dollar play its part without appearing to encourage it. Despite its strong-dollar rhetoric, the administration has never intervened in currency markets, and its primary dollar-related activity has been to pressure China to let the yuan rise against the dollar.

The Bush administration's subtle dollar policy is a marked contrast to the approach of other U.S. administrations. The Reagan administration orchestrated concerted global efforts first to push the dollar down, then to brake its fall. The first Bush administration, in its early years, actively bought and sold dollars to try to keep the currency's value within a government-prescribed range. The Clinton administration intervened, albeit much less often, and initially talked the dollar down before Treasury Secretary Robert Rubin initiated the "strong dollar" mantra in 1995.
[Sinking Value]

In the late 1990s a higher dollar made some economic sense because it helped contain inflationary pressures as the U.S. economy boomed. But after 2000, when the boom turned to bust and fears of inflation switched to fears of deflation, the economic rationale for a higher dollar faded. The present Mr. Bush's first Treasury secretary, Paul O'Neill, tried to modify the strong dollar mantra by saying the U.S. wanted a dollar that reflected strong fundamentals. He retreated after those comments triggered a flurry of selling.

Mr. O'Neill's successor, John Snow, is once again intoning the "strong dollar" mantra, but saying and doing nothing to prevent the dollar's slide. Administration officials want the market to set the dollar in response to fundamental factors, and they broadly share the consensus view that the fundamentals entail a decline.

"During the election year, the White House ... wanted particularly to avoid saying or doing anything where they could be blamed for a decline in the dollar and its consequences," says Fred Bergsten, director of the Institute for International Economics. "They were quite pleased with the dollar stability through this year." With the election over now, "the interesting question is whether they will ... indicate their acceptance of this renewed market decline."

That seems unlikely. While officials think a stampede of dollar selling that could force the U.S. to raise interest rates to lure investors back is unlikely, they don't want to encourage the possibility by saying they approve of a drop.

U.S. officials have some sympathy for the concerns recently expressed by European officials on the impact of the rising euro. One reason they want China to let the yuan float is to avoid having Europe and Japan bear all the pain of a shrinking U.S. trade deficit, which could stoke protectionism.

A study by the Paris-based Organization for Economic Cooperation and Development underlined this risk. Presented last spring to a group of member-country policy makers, it found that a 22% decline in the dollar against all other currencies would shrink the current-account deficit by about one-fifth and modestly trim growth in countries that use the euro and in Japan. But to achieve the same deficit reduction with China's currency still fixed would require the dollar to fall much more against the euro and yen, pushing Japan deeper into deflation and requiring much lower interest rates in the euro area to absorb the impact.

Morris Goldstein, an economist at the Institute for International Economics, says that getting any noticeable reduction in the current-account deficit requires a substantial decline in the dollar against Asian currencies. Several Asian countries fix their currencies to the dollar to maintain their competitive position with respect to China. "A few percent here or there won't do a thing," he says. The trade deficit with China alone is headed for an estimated $150 billion this year. He says, "The administration has a lot of look-busy programs with China on the currency front, but none of it is amounting to much."

John Taylor, Treasury undersecretary for international affairs, last week said the administration's level of engagement with China on the exchange rate is "unprecedented." In recent weeks, Chinese officials have suggested that deliberations on exchange-rate moves are reaching fruition. To their usual statements emphasizing exchange-rate "stability" -- long a euphemism for the dollar peg -- central bankers have begun adding the need for flexibility.

In his speech last week, Mr. Taylor cited "three types of economic policies" that will address the current account: boosting U.S. savings via tax incentives for households and a lower budget deficit; pressing for structural reforms to fuel growth in Latin America, Europe and Japan; and pressing for "market-based flexible exchange rates." Those remarks implied that the current account will be addressed through a combination of lower U.S. deficits, higher foreign growth and dollar adjustment.

--Neil King Jr. contributed to this article.

Write to Greg Ip at [email protected]

Bush Policy: Talk a Strong Dollar But Let It Slide
 
I think its red sign for US economy. Federal Reserve has been raised interests rate and the job creations has increased than expected but the USD value become lower.

we can only see that its because of the different point of view that concerned more on the method of economic growth ,not simply judging from merely the economic growth rate result depends on the deficit and debt before.

American economic growth is mainly made from the financial industry,and it allowed too much loans that invested in the real estate bubbles.

but the main problem is that now the federal reserve is not able to make any reactions like what they did in 2001 from lowring the Fed interest rate from 6.5%to 1%.
At least at that time-they could protect the economic growth going backward but now they have no option because the federal interest rate is low already and the deficit become too big.


Do you think China will free the fixed exchange rate system?
Will EU allow the rise of their currency ?
 
hmmm, I think the Chinese will keep their currency floating there for a while, because obviously it allowing them to grow while having negative impacts on their competitor's economies. Hmm, the Euro seems to be growing naturally, and it seems that it will probably rise on it's own. I don't know if this is due to other nations joining the EU, or what. However, it seems their economy is rather stable at the moment. I would be wrong though..... Here's another article on why the U.S.'s deficit will probably not get reduced as promised. Already the Administration is trying to extend beyond their salary caps, and so this most likelt indicicates that our deficit won't be decreasing very soon......

POLITICS AND POLICY


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Lame Ducks Brace
For Budget Battles
Republicans Seek to Raise Debt Ceiling
And Enforce Domestic-Spending Caps

By DAVID ROGERS
Staff Reporter of THE WALL STREET JOURNAL
November 15, 2004; Page A4

Congress returns tomorrow for what could prove a crash course in how hard it will be to find money for new initiatives in President Bush's second term.

The lame-duck postelection session has two essential tasks: first, raising the limits on government borrowing; and second, enforcing caps on domestic spending for the fiscal year that began Oct. 1.

Republicans are proposing to add $690 billion to $800 billion to the current debt ceiling -- the third increase since Mr. Bush took office in 2001. With the two earlier adjustments, totaling $1.43 trillion, the federal debt limit will have increased at least $2.1 trillion, or 35%.

The Treasury Department hit its current borrowing limit a month ago, but the Republican leadership delayed action until after Election Day. The result is added pressure to slow the pace of domestic spending -- even if it means sacrificing many of the president's priorities. "It shows how tough next year will be," says a Senate Republican leadership aide.

With the blessing of the White House, House and Senate Appropriations Committee staff continued negotiations over the weekend on a massive year-end domestic spending bill that will pare billions of dollars from proposed health and education spending increases promised by Republican senators before the elections.

Together with White House Budget Director Josh Bolten, the Appropriations leadership has vowed to produce a bill that respects the president's goal of capping total discretionary appropriations at about $821.9 billion for fiscal 2005. Given the increases enacted for the Pentagon and Homeland Security, this leaves room for growth of only 2% to 3% in domestic programs over last year.
[Red Sea Rising]

Fourteen cabinet-level agencies still don't have spending bills for this fiscal year that began Oct. 1 -- not to mention the foreign-aid budget and fund to operate the Capitol.

At one level, the White House is the clear victor. Such a low rate of growth is significant and helps Mr. Bolten set the stage for keeping domestic spending to the levels the president wants in his fiscal 2006 budget, which is due in early February.

But the $821.9 billion spending cap doesn't include the costs of the war in Iraq. And much of the painful jockeying now is over a difference of $4 billion in annual spending -- less than what the U.S. military spends every month given the level of fighting overseas.

Nonetheless, the political stakes are important in setting a tone after the elections. Even as the White House demands tighter limits, it is using increased leverage to protect select priorities.

Negotiators acknowledge pressure to bring back a National Aeronautics and Space Administration budget close to $15.9 billion -- or about $750 million more than was first recommended in the House. Several hundred million dollars are expected to be added back for the Millennium Challenge Corp., a White House foreign-aid initiative that promises increased U.S. assistance to poor countries that adopt pro-democracy and open-market reforms. Amid the billions of dollars in the budget for the Health and Human Services Department, the administration is focused on restoring money for the relatively small $100 million "compassion capital" fund, which supports faith-based community groups and is important to Mr. Bush's profile with some religious conservatives.

In each case, Mr. Bush likely will get less than he once hoped for. There also are clear setbacks, such as the Energy Department's FutureGen project, a $950 million coal-fired low-emissions generating plant. Weeks before the election, the administration boasted that the 10-year project was just the type of long-term public investment that diminished the need for the U.S. to join the multinational Kyoto pact to fight global warming. Mr. Bush likely will get less than one-tenth of the $237 million he requested this year as a first down payment for FutureGen.

There is widespread agreement that an estimated $1.2 billion should be added for veterans' medical care. But popular clean-water grants under the Environmental Protection Agency could face cuts, and the National Science Foundation research budget is largely frozen. For the first time in many years, Congress may end up with an education budget at or below the president's request.

Democrats appear so dispirited by their election losses they are hardly resisting the pressure to hold the line on spending, but the talks also are a test of how far Republican moderates will bend, given the promise of a more conservative Congress next year.

Caught in the middle is Sen. Arlen Specter, a senior member of the Senate Appropriations Committee who must negotiate the final education and health numbers. At the same time, he is locked in a high-profile fight over whether he should be allowed to become chairman of the Senate Judiciary Committee.

Senate custom and seniority rules dictate that the Pennsylvania moderate should succeed Sen. Orrin Hatch (R., Utah) in the new Congress, but Mr. Specter touched off a firestorm the day after the elections when he suggested the White House would face tough sledding in the Senate if Mr. Bush chooses Supreme Court nominees who threaten to limit abortion rights. Mr. Specter insists he was misinterpreted and has never imposed a "litmus test" on judicial nominees. Evangelical Christian leaders, who supported Mr. Bush's re-election, have announced their opposition.

Senate Majority Leader Bill Frist (R., Tenn.) sidestepped questions about whether he would support Mr. Specter within the Republican caucus this week. Appearing on "Fox News Sunday," Mr. Frist said Mr. Specter's comments had been "disheartening" to him and that Mr. Specter had "not yet" made a persuasive case for the Judiciary chairmanship. In his appearance on the ABC News "This Week" broadcast, Mr. Specter, who will meet with fellow Republicans on the Judiciary panel this week, took heart at receiving public support from Sen. John McCain (R., Ariz.) but refused to fire back at his critics. "You have to take it as it comes," Mr. Specter said.

But it has limited Mr. Specter's leverage in the budget talks. Just two months ago he was insisting on a labor, health and education budget $3 billion higher than what will now likely emerge. To placate senators, the draft bill would allocate an extra $1 billion among the same accounts, but then take away much of that by imposing a 0.75% across-the-board cut across all the programs funded in the bill.

Because of the tension over the annual appropriations bills, many lawmakers believe things have reached a point where all sides may need to look beyond these bills to find savings in benefit programs, which aren't subject to annual appropriations.

In a November spending update, the Congressional Budget Office said spending for two major entitlement programs -- Medicare and Medicaid -- grew at well above the average for the government between 2003 and 2004. Also worrisome are the mounting debt and the uptick in interest rates. Net interest costs to the government grew by 3.4% between 2003 and 2004 -- the first such increase since 1997.

Write to David Rogers at [email protected]


Looks like our Economic problems will continue to grow.....
 
America is ahead of the game when it comes to education - at the university level. However, this gap is narrowing. As ragedaddy said, education isn't necessarily going to help us. Rage's astute assessment of the cheap and abundant labor in China is what will win an economic war unless the US goes protectionist. I think India could be an even bigger market than China, the problem is that it is highly conservative in the religious sense, which I think is hard to make business and economics arrangements over than a leftist nation. Japan will not turn it's back on the USA and the USA has no reason to turn it's back on Japan. Therefore, wherever the USA goes Japan will follow and vice-versa. America has been successful in the past to opening the economic door to China, and I think it can continue to be successful. The trade off will be major outsourcing and a decrease of jobs in the US unless government regulation is put in place. The US will eventually become the mainstay of highly skilled labor. If regulation is put in place, there would have to be some highly lucrative agreement made with China or other countries without such restrictions to maintain competitive in the newly developing Chinese market.
 
It isn't so much that Asia is forging ahead of America in education, as it is that America is falling behind. For example, read this!
 
Coming Asia Centry; Rise Of China, India, Japan

.
.
Asia has too much potential conflict

_) North-Korea Problem Unresolved
_) China and Taiwan
_) Japan and Island disputes with Neighbours
_) India and Pakistan, both Nuclear Powers


->Asia seems unable, to resolve conflicts and disputes<-

p.s: example of other issues; how solvent, and stable, and how much corruption exist in China's banking system
.
.
 
Bramicus said:
It isn't so much that Asia is forging ahead of America in education, as it is that America is falling behind.

Exactly my point, but still, like ragedaddy said, I don't think education will play the key role in the near (10-20yrs) future.
 
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