Chinese RMB is getting stronger

Oh, has been talking for a long time!!!!!!!Is it real this time.

U.S. Warns China on Currency Policies and Hints at Retaliation

"The Bush administration warned China today that its currency policies were "highly distortionary" to world trade and implicitly threatened to retaliate if Chinese leaders did not change course within the next year.

But even before the Bush administration issued its warning today, Chinese leaders had already warned on Monday that currency policy was a "sovereign" issue and that they would not be pushed into decisions by other governments."

Sell 80 million shirts for an Airbus 380

The Chinese Minister of Commerce, Bo Xilai said in Paris: "... Sell 80 million shirts for an Airbus 380 ... ". It is the same for an Boeing 747. The Chinese got a very small margin of profits. That's how China engages international trading.

Is it a big problem about the deficit between US and China?

Why do we can get cheap goods from Walmart? Because most of them are made in China and Chinese products are extremely cheap!

And so there is a huge trade deficit between US and China. Actually, the Chinese did not earn a lot of money.

I have a friend, who was a provincial representative of foreign business in Mideast. He told me he can only earn a cent from each pair of pant, so it is in US.

Another friend of mine owns a small trade company in DC. He sells toys. I saw him sell his goods at the price below their values because he has too many storage and has to do so, otherwise he would lose more money to pay for the storage and the interests to the banks.

US companies can not produce such products like such a way to satisfy the US market. Revalue the RENMINBI is not likely a good way. So the way should be that US sell more and more high-tech products to China to balance the deficit.

Guanxi is critical engaging business in China?

Guanxi in Chinese means personal social network relationships.

China has just opened its door to the outside world for only twenty-six years. It is evolving from a well-planned economy into captilasm market system. China does not have a good or quality judicial system. People who have good Guanxi, or personal relationship network usually have advantages when there is dispute between his partner and himself.

Among the relationships, one is most important to develop good relationship with the goverment officials. Chinese goverment officials or even staffs in the administration have much more power than their conterparts in the US. On the other hand, the lawyers or judges do have limited power. Even if you win a lawsuit, you will not eventually get what you demand, and you deserve to get.

Family relationship is another one. A family having members in the goverment and business section usually is in a good position to expand their bussiness. Most of Chinese firms are controlled by family members as it was developing in the 1800s or 1900s in the west.

to be continued......