patrick.net

The value of a currency is what it can buy.

Machinery: $213,108,199,000 (13.5% of total exports)
Electronic equipment: $165,604,449,000 (10.5%)
Mineral fuels including oil: $148,426,743,000 (9.4%)
Vehicles excluding trains and streetcars: $133,640,479,000 (8.5%)
Aircraft and spacecraft: $115,380,944,000 (7.3%)
Optical, technical and medical apparatus: $84,281,276,000 (5.3%)
Pearls, precious stones, precious metals and coins: $72,830,232,000 (4.6%)
Plastics: $60,836,970,000 (3.9%)
Organic chemicals: $46,510,903,000 (2.9%)
Pharmaceutical products: $39,742,717,000 (2.5%)

thunderlips11 says

RMB now #5 World Payment Currency - was #14 December 2012

Still 2% of total trade. Western currencies still have the monopoly.

This feels like an episode of Letterman's "Will It Float?"

I would add to the definition of currency value: the fidelity of the issuing nation, willingness and ability to pay its debts.

Quigley says

I would add to the definition of currency value: the fidelity of the issuing nation, willingness and ability to pay its debts.

China has no problem in that department.

Everytime the US tries to sanction a BRIC, expect the RMB to look more and more useful.

Just another fiat currency.

They can no longer debase their currency over the long haul, i.e. it will become more valuable.

China Invests in Technology, Manufacturing highest and lowest tech. Textiles to Lasers, Nanotechnology to Toys.

You would expect a rising economy.

What do we expect to happen when countries avoid manufacturing, low, med, and high tech?

IMO they have malinvested, they have built empty cities, train stations, airports. The core reason is that the Apparatchiks get bonus money for GDP, GDP has a lot of book cooking, as in empty cities. This makes things look better than they are.

From a macro view they have been practicing mercantilism for 20 years. They can no longer devalue the Yuan as it would cause too much inflation and the people would be pushed beyond the breaking point as their standard of living as been very low because of keeping the value of the Yuan so low for so long.

Quigley says

I would add to the definition of currency value: the fidelity of the issuing nation, willingness and ability to pay its debts.

Said Fidelity depends on controlling Malinvestments?

thunderlips11 says

Everytime the US tries to sanction a BRIC, expect the RMB to look more and more useful.

Especially for those countries with their own abundant energy resources that don't need middle eastern oil and want to buy consumer and industrial goods. :)

China, the USA of the 60s.

thunderlips11 says

Quigley says

I would add to the definition of currency value: the fidelity of the issuing nation, willingness and ability to pay its debts.

China has no problem in that department.

Everytime the US tries to sanction a BRIC, expect the RMB to look more and more useful.

That's only the tip of the iceburg. Lots of people looking to bypass the usd these days for many reasons. China is looking to take advantage every way they can. Going to be a hard road though. No one really knows what's on china's books.

bob2356 says

No one really knows what's on china's books.

And that's the downside. Asia Bear Jim Chanos and Asia Bull Marc Faber alike have said it's not a question of whether a Chinese Company's books are cooked, only to what degree.

thunderlips11 says

Asia Bull Marc Faber

Is that true?

indigenous says

thunderlips11 says

Asia Bull Marc Faber

Is that true?

From memory yes, everybody who deals in China seriously (beyond "Hey look at how cool and international I am" MBA types) knows that fraud and misrepresentation is the norm in Chinese business. It's considered foundational, and transparency considered a dumb Golden Mountain Idea that can help your competitors destroy you.

No, i mean him being bullish on asia.

indigenous says

No, i mean him being bullish on asia.

Well Generally Faber has been and still is generally an Asia bull, though I think he's been talking about a downtown recently.

Sactly how can he not.

Entitlemented says

What do we expect to happen when countries avoid manufacturing, low, med, and high tech?

Russia.