The passenger aircraft industry is dominated by Boeing and Airbus. That landscape will start to change in 2016 when Commercial Aircraft Corporation of China (COMAC) (中国商用飞机有限责任公司) officially enters its C919 jetliner into service. It will compete head on against the Boeing 737′s and Airbus A320′s and is expected to be both cheaper and more fuel efficient. China Daily cited a Bloomberg report where Airbus forecasted Asia region alone to buy 8,000 passenger aircrafts (100+ seats) over the next 20 years valuing at $1.2 trillion. The market is huge. It also cited an Aviation Industry Corporation of China (AVIC) report predicting that airlines in China will buy 2,922 large passenger jetliners before the year of 2028. That is in the neighborhood of $400 billion in jetliners. It is obvious that China would have to invest in this industry.
COMAC C919 Passenger Jetliner
$1.4 trillion out of thin air
The U.S. government has created out of thin air (“manipulated” into existence if you prefer) $1.4 trillion since September 2008 (around the time of the financial crisis) to March 2010. (Source: U.S. Fed.) In December 2008, James Grant wrote an article in the WSJ criticizing the Fed “printing like mad … and is the wrong approach with potentially dire consequences.”
What’s the point? Everyone who hold assets denominated in dollar are immediately going to have their wealth diluted in proportion to the amount “printed” (it’s computer based now, and so the physical printing is no longer necessary). China and Japan are the two largest foreign holders of American debt, so the value of their holdings decrease. The vast majority of holders of dollar denominated assets are in fact Americans. Their purchasing power is now reduced. Who is “manipulating” who?
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Google has just officially announced discontinuing google.cn and routing web requests to google.com.hk. It has proclaimed serving uncensored results from Hong Kong “entirely legal and will meaningfully increase access to information for people in China.” Legally, it is probably true, but the Chinese government might take steps to block google.com.hk for Mainland users, as China has done with some other Google services. Google has also announced a tracking web page to show what Google services are blocked within China.
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Under U.S. pressure, the Japanese government revalued the Japanese Yen 200% from end of 1985 through early 1988 to address the trade deficit U.S. had with Japan. Did it make any difference for the U.S.? What happened to the Japanese economy as a result of that revaluation?
Professor Jiang Ruiping, Chairman of the Department of International Economics, at the Beijing-based Foreign Affairs College had an article in the People’s Daily in September 25, 2003, titled, “Revaluation of Japanese Yen, a historical lesson to draw: analysis.” He addressed those questions for us back in 2003. Below is the translation by People’s Daily Online staff member Li Heng:
(For a view of the whole Yuan and Dollar exchange rate issue, have a read at one of our featured posts, “Opinion:Making Sense of the Dollar and Yuan“.) Read more…
The term, “cooperatition” was coined by economists to describe corporations both cooperate and compete at the same time. For example, Apple and Google cooperate on getting Gmail and Google Maps integrated well into the iPhone, resulting in a better finish product and while helping both companies in the market place. However, Google also makes the Android phone operating system which helps strengthen Apple’s iPhone competitors.
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[Edit 2/20/2010] People do not remember now, but back in 2007 and 2008, Chinese toys companies were the butt of high profile highly politicized investigations for manufacturing unsafe toys; after formal investigation it turned out most of the recalls were due to fault of U.S. designers – not Chinese manufacturers. ”Made in China” was under attack in the U.S. and a target of xenophobia and protectionism.
Never mind that iPhones, designer clothing, and computers are made in China and used widely by Americans. Never mind a University of Manitoba compiled a study in 2008, “Toy Recalls – Is China the Problem?” looking at all the toy recalls within the last two decades, and finding:
“Of the 599 recalls since 1988, an overwhelmingly high number of recalls (424 or 70.8 percent of all recalls) were due to problems which could be attributed to design flaws.”
Many Americans still see made in China goods as toxic and low quality. Read more…
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