Chinese Humour

[Dinner]

Originally posted by Smiley
This is reminiscent of calls in the 80s that the yen was undervalued, allowing Japanese companies to undersell their American competitors.

Well, eventually the yen rose dramatically in value... and the suddenly cash-rich Japanese companies bought up their American competitors.

Except the exchange value for the Chinese renminbi really is controlled by the central government and prevented from floating. The whole reason you can't convert directly from yuan (the real Chinese currency) into foreign currency is so the Chinese government can controll the exchange rates. They made it so the yuan can only convert to renminbi which can then be converted into foreign currency.

Total government interventionism to keep the yuan low and exports cheap.

[Lul Thyme]

Originally posted by Colon™

And this exhibit, perfect example of scale manipulation to exagerate a point.

[Kuciwalker]

China keeping exports cheap

[Qilue]

Originally posted by Lul Thyme


And this exhibit, perfect example of scale manipulation to exagerate a point.

Huh?

[Kuciwalker]

Look at the numbers on the left side of the graph. The drop is exaggerated by altering the scale so it looks bigger.

[Qilue]

I looked at that and at the progression along the bottom and both have linear progression although the y axis is somewhat truncated.

Do you mean that the x axis should have been in increments of say 1 rather than .05?

[Kuciwalker]

No, I mean that the drop is visually large because the scale of the graph is small. If you viewed it with the y axis going to, say, zero, it would look much less impressive.

[:) Smiley]

Even still, a 5% change is a lot when talking about things of international economic significance.

[Kuciwalker]

Take it up with Colon. I was just explaining what he was talking about.

[Whoha]

Originally posted by Kuciwalker

But it's not like China isn't getting benefits from it either. They get the benefit of economies of scale in producing for the US market, allowing them to make stuff for themselves cheaper also.

Not really the damage to the economy from tarrifs almost always exceeds any benefits.

Well China's damage so far is that they are creditors and producers. The benefit to our economy is that we are debitors and consumers of their goods. And because none of those industries will come back over night, if/when China finally raises prices(forced to or not) we have to pay it for lack of substitute goods.

[Lul Thyme]

Originally posted by Smiley
Even still, a 5% change is a lot when talking about things of international economic significance.

Sure.
But the big drop on that grap is about 2-3 % which is big but not as big as the graph would lead you to believe.

Vertical cutoff of axis is a tool used in publicity and is avoided in science. I'll let you decide which sense of the fence this graph is on..


EDIT :
to make it clearer, the point is that with a vertical cutoff, you can make ANY change appear AS BIG as you want.
Even going for a million to a million and one can be made to seen like a huge increase, while on a scale that starts at 0, the relative increase is obvious.

[Kuciwalker]

Well China's damage so far is that they are creditors and producers.

They would still be producers with free trade - that's their competitive advantage. They'd be getting more money for it though. They'd still be creditors, too - that's due to market forces, not the PRC's attempted distortion of them.

The benefit to our economy is that we are debitors and consumers of their goods.

Again, that would be true even with perfectly free trade.

And because none of those industries will come back over night, if/when China finally raises prices(forced to or not) we have to pay it for lack of substitute goods.

We'd've been paying the higher prices anyway, but this way we get free stuff for a while. And if the industries stayed in the US we'd pay even higher.

[Whoha]

Originally posted by Kuciwalker
They would still be producers with free trade - that's their competitive advantage. They'd be getting more money for it though.

"money"/wealth/value doesn't come from no where, there is only so much they can get. By prolonging the game until the inevitable collapse, they can get more of the total.

We'd've been paying the higher prices anyway, but this way we get free stuff for a while. And if the industries stayed in the US we'd pay even higher.

We'd pay more, but the money wouldn't leave our economy.

[Kuciwalker]

"money"/wealth/value doesn't come from no where, there is only so much they can get. By prolonging the game until the inevitable collapse, they can get more of the total.

... what?

They produce stuff and sell it to us for less than the market value [would be without subsidies]. In the end, we have more stuff than we would have.

We'd pay more, but the money wouldn't leave our economy.

The money comes back to our economy - it's called foreign investment. And when all is said and done, the model you espouse is just obviously wrong. Take it to its logical conclusion: we should cut off all trade and have full subsidies for every industry... that's absurd and impossible. We could reap further benefits from cutting of trade between each state! And 100% subsidies are obviously impossible - money has to come from somewhere. Subsidies are just the government's way of deciding that the market isn't allocating resources correctly, and 99% of the time the government is wrong.

[Colon™]

Originally posted by Lul Thyme


And this exhibit, perfect example of scale manipulation to exagerate a point.

That is your standard Yahoo! Finance graph, there's nothing to manipulate about. I would expect anyone who reads a graph would be able to figure out he needs to read the scales but maybe because it's been a recent discovery to you that you even need to bother mentioning.

And it was in reply to Theben who was getting worked about about the seeming irrelevance of the gap between the 21st July high point and the previous high point: the graph shows a 3-4% rise from low to high, and a continuing rise of the Yuan, which is something that does matter.

So, for goodness sake, go **** elsewhere.