Chinese Cheap Labor Threatens Mexican Economy

The Arizona Republic reports that growth of Chinese exports are threatening the Mexican economy. While Chinese exports to the United States grew at 29 percent last year, Mexico's increased by a paltry 1.9 percent. And its not just competition for the lucrative American market that is affecting Mexican manufacturers; the Chinese are gaining market share within domestic market sectors as well. China's entry into the World Trade Organization in 2001 means that Mexico has until 2006 to comply with international law by eliminating protectionist tariffs on a range of goods. Dynamic importing firms should be able to take advantage of this rare opportunity. Unfortunately for Mexico's economy, its beleagured manufacturing sector may suffer yet another blow.

Chinese motorcycles selling on price

Chinese motorcycle sales in India recently suffered a huge loss when Japanese brands reduced their prices. In fact, Chinese sales decreased 40 percent when the Japanese cut prices just 7 percent. This doesn't bode well for Chinese motorbike distributors here in the U.S. either. It demonstrates that the demand for their products is fueled almost entirely by low prices. Should these prices rise--either with a revaluation of the Yuan or with an economic downturn in China--motorbike dealerships in the U.S. may suffer.

If you want to make some money selling Chinese bikes right now, while their price remains artificially low, e-mail us at Faculty Imports. We can help you find some really nice bikes at amazing prices.

China currency policy discussed, but no change announced

Recognizing the rapid growth of the Chinese economy--and the dependence of the entire world on the cheap goods produced there--the world's seven richest nations finally invited China to lunch. The G7 invited China's finance minister and central bank minister to discuss global macroeconomic outlooks, and of course to apply more pressure on the Asian giant to float its currency. The Yuan has been pegged at 8.28 to the dollar since 1995, yet during this time the Chinese economy has grown more than 10 percent each year. While the Chinese accept the idea of a market-based exchange rate in principal, their current policy has so many benefits for the export-based economy that party officials are reluctant to part with it. Nonetheless, as the country's leaders work towards a soft landing, a revaluation of the currency will probably be necessary. In the short term, millions importers of Chinese products will continue to hope the status quo can last.

SWEET!!

Expectations of China floating its currency on foreign exchange markets, with large implications for the global economy, have dimmed after industrialised nations declined to increase pressure on Beijing. Those of us in the import business will continue to reap the rewards.

More from the China Currency Coalition

The Chinese Currency Coaltion, an isolationist industry association, is gaining some traction, this time from the Business Report of New Zealand. While China has promised to move toward free-market valuation of its currency, U.S. treasury secretary John Snow insists that the country's leaders have been saying this for the last five years. And Faculty Imports clients have been loving it...