China GDP 11.9% for Q1 2010

So much for the claim currency manipulation has nothing to do with China's economy, it grew by an astounding 11.9% in Q1 2010 and exports jumped 29%. Bloomberg has more details.

Consumer prices rose 2.4 percent in March from a year earlier, today’s data showed, compared with 2.7 percent in February. Economists’ median estimate was 2.6 percent.

Industrial production climbed 18.1 percent in March, less than a 20.7 percent gain in the first two months, and retail sales increased 18 percent, today’s data showed. Car sales leapt 76 percent in the first quarter from a year earlier, with Mercedes-Benz (China) Ltd. reporting a doubling.

China to "slightly" increase currency value, token move to claim the U.S. did somethin' while doing nothin'

What a surprise. Here comes the ineffectual response on Chinese currency manipulation so the U.S. can pass the buck again.

The Chinese government is preparing to announce in coming days that it will allow its currency to strengthen slightly and vary more from day to day, a move being taken for domestic policy reasons in China but likely to please the Obama administration, people with knowledge of the emerging consensus in Beijing said on Thursday.

The article goes on to claim this is a political windfall for the Obama administration.

But, of course any annoucement could be delayed:

Treasury Delays China Currency ManipulationReport

The U.S. Treasury has delayed a currency manipulation report on China according to the New York Times. The report was due out mid-April.

For now, the United States is setting aside the most potentially divisive issue, deferring a decision on whether to accuse China of manipulating its currency, the renminbi, until well after Mr. Hu’s visit, according to a senior administration official. That decision, the official said, reflects a judgment that threatening China is not the best way to persuade it to allow the renminbi to appreciate against the dollar.

Many economists expect China to act on its own to loosen the tight link between the renminbi and the dollar — a policy that keeps the currency’s value depressed and makes Chinese exports more competitive in global markets.

USTR - No Mention of China's Currency Manipulation in Report

The Office of the United States Trade Representative has issued a report on foreign trade barriers. Contained within is no mention whatsoever of Chinese currency manipulation. There is mention of VAT manipulation, tariff-rate quotas and even a 35% tariff on raisins. (who knew?)

While the press is calling this report hard line, I find it kind of wimpy and even question some of the trade figures quoted.

China CEOs are all for a Floating Yuan!

This is an astounding headline. According to Bloomberg, Chinese Business Executives are meeting right now with President Obama and are for increasing the value of Chinese currency in relation to the U.S. dollar.

Chinese executives are joining U.S. President Barack Obama in backing a stronger yuan, even as Premier Wen Jiabao says the currency isn’t undervalued.

Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group Ltd., said gains would boost consumers’ purchasing power. Qin Xiao, chairman of China Merchants Bank Co., said an end to the yuan’s 20-month peg to the dollar would let lenders set market-based interest rates. Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group Co., said a stronger currency would cut import costs.

China Killed IMF Report on Their Currency Manipulation

Buried in the article IMF warns wealth nations of debt is this gem:

The I.M.F.’s staff concluded in a report last summer that the renminbi was “substantially undervalued, ” and that this was contributing to China’s large trade surpluses in recent years. But China has blocked the release of that report, a prerogative of the I.M.F.’s member countries, although most allow the release of the I.M.F. staff’s reports on their economies.

China didn't like the IMF call out their currency manipulation so they bury the report? Gets even better. Be prepared for a propaganda war due to a statistical anomaly, (really, who does trust official Chinese statistics on their economy?), China will report a trade deficit:

Paul Krugman Takes on China's Currency Manipulation

Anyone reading this site knows we have talked in depth about China's currency manipulation. Now Paul Krugman takes it on, which is good news due to the devastating impact currency manipulation has on the U.S. economy, especially jobs and manufacturing.

Widespread complaints that China was manipulating its currency — selling renminbi and buying foreign currencies, so as to keep the renminbi weak and China’s exports artificially competitive — began around 2003. At that point China was adding about $10 billion a month to its reserves, and in 2003 it ran an overall surplus on its current account — a broad measure of the trade balance — of $46 billion.

China bidding on yet more American Infrastructure - this time High Speed Rail

Ya know how new, emerging technologies were supposed to rebuild the U.S. Economy? Instead we find the DOE has awarded billions to foreign companies and created jobs in foreign countries under the hype of green jobs? Remember those, the hyped out and touted jobs of the future, even promoted as something to boost U.S. domestic minorities job opportunities?

Well, we're at it again. This time it's High Speed Rail. Even worse, the Obama administration is claiming to cooperate with China. There are currently $8 billion dollars in grants up for bid.

Our Current Policy is to Beg

Our Current Policy is to Beg - Ralph Gomory

Gomory is referring to the United States response to the mercantile trade practices of China. In the piece, The Innovation Delusion, Gomory exposes the absurdity the United States can create intellectual property, advanced R&D and innovate it's way out of the trade deficit. Gomory also calls out Thomas Flat Brain Friedman, one of my favorite things to see. (I have yet to figure out how such nonsense even gets published never mind on the best sellers' list!)

China is Running out of Workers

Yes, you read that right and no, the source is not The Onion. China, with the world's largest labor force of 812.7 million, is running out of workers.

The immediate cause of the shortage is that millions of migrant workers who traveled home for the long lunar New Year earlier this month are not returning to the coast. Thanks to a half-trillion-dollar government stimulus program, jobs are being created in the interior.

But many economists say the recent global downturn also obscured a longer-term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.

Maybe they will have to offshore outsource!