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Korean Job Discussion Forums
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Wangja
Joined: 17 May 2004
Location: Seoul, Yongsan
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 Posted: Mon Oct 24, 2005 7:39 pm Post subject: |
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| Why is it ok for the Chinese to buy American debt and not American-owned oil fields? Which do you think is more dangerous to the US in the long run? |
Oh, bloody good point H, bloody good.
The USD has had a bit of a bounce in the past few days, but is it a "dead cat bounce"? Remember the panic a few months ago when the Koreans sold some dollars for Euros? What if the Chinese followed?
(And no, I am not in favour of a weak dollar, although I reckon that's what is coming). |
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Pligganease
Joined: 14 Sep 2004
Location: The deep south...
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| Posted: Mon Oct 24, 2005 8:25 pm Post subject: |
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| hypnotist wrote: |
| Pligganease wrote: |
| The Chinese will never play fairly in global business. |
| Pligganease quoting the BBC wrote: |
| Foreign companies have been positioning themselves to take advantage of the opening of China's banking sector to full competition, a precondition of China's admission to the World Trade Organization (WTO). |
Never?
Why is it ok for the Chinese to buy American debt and not American-owned oil fields? Which do you think is more dangerous to the US in the long run? |
No, I really don't think China will ever play fair. They can't. The existance of their country, which is essentially one large corporation, makes them unable to play fair. But, that's just my opinion.
As far as the debt goes, you are correct in that purchasing the debt could be bad. However, it's not as important as the oil. All of the debt is already outstanding, and the terms of the bonds/loans are already determined. The Chinese would be unable to re-negotiate the terms. Also, if war were to occur, which I don't think it ever will, it's only paper.
China could really screw up the U.S. economy by siphoning a large percentage of the oil that they would have owned back to China. That would drive oil prices even higher and raise the CPI in the States to a higer level than it's already record-high level.
And as far as the movie goes, I stand corrected. However, in my defense, I have been in Korea and this is the first time I had heard of it.
And, OH, don't be naive. You don't care about China because no one ever says that you are a part of China. Everyone acts in their own best interests, including Canada. Some countries just have more pull than others. Tell me, please, about some really good Canadian movies that could fill the void left by a Hollywood boycott. |
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hypnotist
Joined: 04 Dec 2004
Location: I wish I were a sock
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| Posted: Mon Oct 24, 2005 9:29 pm Post subject: |
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| Pligganease wrote: |
| No, I really don't think China will ever play fair. They can't. The existance of their country, which is essentially one large corporation, makes them unable to play fair. But, that's just my opinion. |
My opinion is that America is much the same, albeit with rather more autonomy granted to the individual parts. The main difference is that America often claims to want to play fair. China is quite clear that it doesn't think it fair to expect it to play fair at this stage of its economic development.
| Quote: |
| As far as the debt goes, you are correct in that purchasing the debt could be bad. However, it's not as important as the oil. All of the debt is already outstanding, and the terms of the bonds/loans are already determined. The Chinese would be unable to re-negotiate the terms. Also, if war were to occur, which I don't think it ever will, it's only paper. |
But:
a) Unocal's reserves (mainly gas, I think) were mostly being pumped around Asia. As a US oil producer providing the US with oil, it was tiny - 58,000 barrels a day (only 0.8 percent of US production and 0.3 percent of US consumption).
b) The bonds are priced in dollars. China has a LOT of dollars. They certainly can manipulate the terms and the value of the bonds by manipulating the price of the dollar. The US economy isn't insular enough for the price of its currency on the international market not to matter. Now, whether they'd want to is another matter - current thinking is that it'd be economic suicide for them to start screwing with the dollar. But as W says, if they moved out of the dollar in a big way (big in market terms but still small in terms of their reserve), they could really upset the apple wagon.
| Quote: |
| China could really screw up the U.S. economy by siphoning a large percentage of the oil that they would have owned back to China. That would drive oil prices even higher and raise the CPI in the States to a higer level than it's already record-high level. |
Not with the tiny amounts of oil they could get from Unocal. But it's not impossible to foresee a scenario where instability in the dollar causes OPEC to start pricing oil in Euros (or just hike prices in dollar terms).
Anyway, most of us in the rest of the world are quietly satisfied that the price of oil in the US is finally reaching realistic levels. Not happy about the human cost, particularly to the poor, but it's long overdue.
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| And as far as the movie goes, I stand corrected. However, in my defense, I have been in Korea and this is the first time I had heard of it. |
Well, fair enough, but as I said even my gf here had heard of it. Then again she likes Penguins  |
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