Comments on: China on a Tightrope http://the-diplomat.com/2010/03/30/china-on-a-tightrope/ Know The Diplomat, Know Asia Thu, 24 May 2012 01:55:35 +0000 hourly 1 http://wordpress.org/?v=3.0-alpha By: David Gibson http://the-diplomat.com/2010/03/30/china-on-a-tightrope/comment-page-1/#comment-1493 David Gibson Tue, 06 Apr 2010 06:33:38 +0000 http://the-diplomat.com/?p=3946#comment-1493 C. Wong - Yours is a typical domestic argument against revaluation of the Yuan, however, the "high-tech products"that you speak of are not sold to China for a variety of reasons. Many of these products are multi-use technology, which means they can be used for either civilian or military purposes. Clearly the United States do not want to just give away these types of technologies, that could be easily converted and used by the Chinese military. Secondly, because intellectual property rights protection is virtually non-existent in China, many companies are not willing to sell their products to China for fear of their products being replicated, or trade secrets being stolen and unfairly used, and thus losing that market. Furthermore, this type of "high technology" argument does not outweigh the above described economic benefits of revaluation of the yuan achieved through an open capital account and a free floating exchange rate. C. Wong – Yours is a typical domestic argument against revaluation of the Yuan, however, the “high-tech products”that you speak of are not sold to China for a variety of reasons. Many of these products are multi-use technology, which means they can be used for either civilian or military purposes. Clearly the United States do not want to just give away these types of technologies, that could be easily converted and used by the Chinese military. Secondly, because intellectual property rights protection is virtually non-existent in China, many companies are not willing to sell their products to China for fear of their products being replicated, or trade secrets being stolen and unfairly used, and thus losing that market.

Furthermore, this type of “high technology” argument does not outweigh the above described economic benefits of revaluation of the yuan achieved through an open capital account and a free floating exchange rate.

]]> By: C. Wong http://the-diplomat.com/2010/03/30/china-on-a-tightrope/comment-page-1/#comment-1233 C. Wong Thu, 01 Apr 2010 18:05:34 +0000 http://the-diplomat.com/?p=3946#comment-1233 China is NOT a capital-poor country with a very large foreign reserve, most of which is in U.S. dollars and which cannot be spent domestically. The things that China needs cannot be bought in U.S. dollars outside China, i.e., either in Europe or in the U.S., in particular, because China needs high-tech products which countries in the West and in the U.S. do not want to sell to her. China is NOT a capital-poor country with a very large foreign reserve, most of which is in U.S. dollars and which cannot be spent domestically. The things that China needs cannot be bought in U.S. dollars outside China, i.e., either in Europe or in the U.S., in particular, because China needs high-tech products which countries in the West and in the U.S. do not want to sell to her.

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