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Rousseff and Obama to discuss ways to counteract China’s undervalued Yuan

Friday, February 4th 2011 - 21:21 UTC
Full article 8 comments

Brazilian President Dilma Rousseff will discuss with her U.S. counterpart Barack Obama ways to counteract the threat posed by an undervalued Yuan and cheap imports from China, a Brazilian official said. Read full article

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  • I

    Wow is USA stabbing China in the back again, did USA forget that China can devalue the U$ anytime they wish ?? Obama better be carefull on the words he uses to create the wedge between Brazil and China, Chances are that Brazil and China have no need for the bad heat USA is blowing, it would be a good advice to stay as far away from USA as we can, Egypt didn't do it and look what's happening in Egypt.

    Feb 04th, 2011 - 10:35 pm - Link - Report abuse 0
  • xbarilox

    oh, it sounds like a declaration of war haha I hope Dilma will keep an eye open, these deceivers are bloody trators when it comes to business.

    Obama ao ritmo do samba
    http://www.youtube.com/watch?v=IHKl63d-TfM

    Feb 04th, 2011 - 11:42 pm - Link - Report abuse 0
  • Forgetit87

    @I

    Brazil is actively seeking US help. Without the US, Brazil can do nothing against China but to lift import tariffs. Still, IMO, with or without the US, the chances that China will give in to international pressure are null. Instead of worrying about other countries' currencies, Brazil should devalue its own. Apparently it'll not do so for the government is too chicken to do something against foreign “investors” who are speculating with the Brazilian currency. Frankly, I already repent having voted for Dilma. Serra at least had was clear that he intended to devalue the real and reduce interests rates. Brazil will probably have a balance of payments crisis soon. I hope that, after that, the government will have the guts to no longer acquiesce to the whims of unproductive speculators.

    Feb 05th, 2011 - 12:38 am - Link - Report abuse 0
  • I

    just busyness ??LOL that's the first 2011 understatement, what ? are you working on becoming a politician ? the 2000 spaces allocated for each comment aren't enought to descrive how many things are wrong when talking about USA, hopefully some of those biofuel ideas and windmill will stick to abama when he visits Brazil.

    Feb 05th, 2011 - 12:40 am - Link - Report abuse 0
  • Fido Dido

    “Without the US, Brazil can do nothing against China but to lift import tariffs.”

    Nonsense, Brazil can anytime just raise the import tariffs from China. You don't need help the US. If Chinese RMB is pegged to the Dollar. If the Chinese (it's matter of time) just doing that, boom, the dollar will fall (losing purchasing power) and Chinese Yuan is gaining purchasing power. The Chinese Yuan versus the Brazilian real will be a win for the Brazilians without devaluing it by manipulation or any Q.E. Again, a stable but strong real is good and what Brazil need is..TAX REFORM (actually everywhere)

    http://inflation.us/videos.html

    Feb 05th, 2011 - 01:26 am - Link - Report abuse 0
  • xbarilox

    @ 4 Calm down you SOB. It's not my fault that you're living in Canada, rata cobarde, te hubiéses quedado en Argentina, instead of running away from problems, so stop faking patriotism, you don't have any. Imbecile. Morfón.

    Feb 05th, 2011 - 01:36 am - Link - Report abuse 0
  • Forgetit87

    @Fido: There are limits as to how much a country that is a member of the WTO can raise imports tariffs. If I'm not mistaken, a tariff of 35% of the product value is the limit imposed by that organization. Some days ago the government said it would impose a 35% tariff on certain Chinese imports. In response to the announcement a member of CNI, an industrialists' lobby, quipped: against China, only a 500% tariff would do. Brazil can't raise tariffs ad infinitum. But it can devalue the currency, which has the same effect to the domestic market as imposing tariffs. And it boosts exports.

    That a strong currency is what Brazil needs, is not right. A strong currency results in current account deficits; and current account deficits, when too wide and carried for too long, cause dependence on foreign investment and, ultimately, balance of payments crisis and the investment dries out. The 1999 crisis in Brazil was caused by an inflated currency.

    To devalue the currency might spur inflation, but inflation is not a worse outcome for the economy than an economic crisis.

    Feb 05th, 2011 - 02:13 am - Link - Report abuse 0
  • JoseAngeldeMonterrey

    Many countries in the world are taking a beating from China´s offensively manipulated currency. But the game is changing because countries around the world are passing from words to action.
    China won´t allow it currency to go up simply because it the main reason why it keeps getting foreign investment flowing into the country. China had excess of flows of rural workers moving to China´s industrial centers for the last 30 years but it is now beginning to reach the Lewis Turning Point (http://www.businessweek.com/news/2010-06-11/china-reaches-lewis-turning-point-as-labor-costs-rise-update1-.html) This is the point when your labor offer becomes a shortage or a deficit and salaries begin to rise. China´s competitive advantage is eroding as Chinese wages rise and oil prices impact transportation costs.
    They are holding steadfast to their cheap currency but they face huge challenges ahead as other countries begin to devalue their currencies and to develop trade agreements with other countries to counteract China´s strategy and boost their exports.

    Feb 05th, 2011 - 03:39 am - Link - Report abuse 0

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