Pronouncements(March 2021)
March 1 2021
by Gregory J. Hugh, Publisher – CEO, China Insight, Inc.
With a handful of snowstorms travelling through the country over the past few weeks, it may not feel like spring is coming anytime soon. But as we enter the month of March, the spring equinox isn't too far behind. According to the Old Farmer's Almanac, spring equinox in 2021 falls on Sat., March 20, at 5:37 a.m. This will mark the astronomical first day of spring in the Northern Hemisphere.
Asian American Unity Coalition (AAUC)
March 1 2021 According to the Asian American Unity Coalition (AAUC) Preamble: Asian Americans shall either win equal citizenship UNITED or suffer discrimination separately. To aspire to live as equals in a free market system like the U.S.A. where we represent one of the smallest minorities, we must UNITE to acquire sufficient strength to fight off discrimination
committee100Study_202103
March 1 2021
[NEW YORK, Feb. 8, 2021]
– Committee of 100 (C100), the nonprofit leadership organization of Chinese Americans in business, government, academia, healthcare, and the arts announced a landmark study on the historic contributions of Chinese Americans to the fabric of American society.
2 Physicists 202103
March 1 2021
by Elaine Dunn.
March 8 is International Women’s Day. Since 1911, women the world over have been honored for their achievements, be it in the cultural, economic, educational, historical, political or social fields on this day. March 8 is also a day for women from all backgrounds to come together to break down barriers for gender parity and women’s rights.
Bergad
family 202103
March 1 2021
This article by Sarah Lemagie, reprinted with permission from the Minneapolis Foundation, first appeared in the foundation’s website on Dec.7, 2020.
When the pandemic struck Minnesota this spring, Pearl Bergad reached out to her two sons and their wives: We’ve built up a pretty substantial reserve in our Donor Advised Fund at the Minneapolis Foundation, she pointed out. Let’s do something with it now.
Book Review 202103
March 1 2021
Reviewed by J.D. Mabbot, contributor
Niklas Hageback’s “The Downfall of China or CCP 3.0?” is an insightful look at inside the policies of the Chinese Communist Party (CCP) that will decide whether it will face an impending downfall, or yet again can manage to transform itself radically and weather the storm.
CNY Photos 202103
March 1 2021
by China Insight
View the wonderful photos from local Chinese New Year Celebrations.
Publisher’s Pronouncements (Feb 2021)
January 30 2021
by Gregory J. Hugh, Publisher – CEO, China Insight, Inc.
Now that Joseph R. Biden has been inaugurated as the 46th president of the United States, the country needs to unite again after experiencing a tumultuous period under the previous administration leading to a tragic demonstration at the nation’s capital on Jan. 6.
Garden fundraising
30 January 2021
By William Zajicek, contributor.
The St. Paul-Changsha China Friendship Garden, located in Phalen Park, Saint Paul, is seeking additional funds ($160,000) to complete Phase I of the garden construction and begin Phase II.
CNY do’s and don’ts
30 January 2021
By Elaine Dunn, China Insight.
Feb. 12 will be start of the Year of the Ox, which, according to Chinese tradition, is a symbol for wealth. So … here are a few tips on how to ring the year in the Chinese way.
App deadline for CGM
30 January 2021
by Elaine Dunn, China Insight.
The Chinese American WWII Veterans Recognition Project enters its fifth year with great anticipation for the award ceremony of the Congressional Gold Medal to more than 3,000 veterans who have applied for, and confirmed for this honor.
local national speedskating champion
30 January 2021
by Elaine Dunn, China Insight.
Whether the 2022 Winter Olympics will take place as planned in Beijing or not (China Insight, January 2021) is anyone’s guess at this point, but to the many hopeful participants, their training and laser-sharp focus are on getting to one of the three medal-winning podiums in their event in whatever city it may take place.
CGM
January 3, 2021
By Greg Hugh.
It has been a long and uncertain journey, but Chinese American veterans who served their country in World War II were finally awarded the Congressional Gold Medal on Dec. 9, 2020.
Efforts to enact the Congressional Gold Medal Act for these Chinese American veterans first began in December 2016. An exploratory committee led by the Chinese American Citizens Alliance (CACA) set out to secure the support of members of Congress. The bill, first introduced to the Senate and the House of Representatives in May 2017, was ultimately passed on and signed by President Donald Trump Dec. 20, 2018.
NY Chinatown images
December 31, 2020
by China Insight.
While air travel is still risky health-wise and lockdowns are common, here is a chance for us to “travel” and see New York City’s Chinatown.
The Museum of Chinese in America (MOCA) and the Center for Jewish History (CJH) are co-hosting a new online exhibition, “An Unlikely Photojournalist: Emile Bocian in Chinatown,” at https://exhibits.cjh.org/bocian.
Beijing 2020 Olympics
December 31, 2020
by Elaine Dunn, China Insight.
The 2008 Summer Olympics in Beijing opened with great fanfare. It was China’s debut on the world stage, an opportunity to showcase its history, culture and its athletes to a global audience. Fast forward to the 2022 Winter Olympics. Once again, Beijing will be the venue. However, circumstances are quite different.
2021 Chinese Holidays
December 31, 2020
Compiled by China Insight.
China’s 2021 holiday schedule will, per tradition, include two week-long holidays: Chinese New Year, aka Spring Festival, which will take place Feb. 11-17; and the National Day Holiday, Oct. 1-7.
Society Fat Size
December 31, 2020
compiled by China Insight.
On Nov. 11, a netizen posted an image of an apparel size chart seen at a Taiwanese chain store in China, saying, “I was shocked when I saw this size chart at a RT-Mart today. Am I completely rotten?” That image and post went viral and it enraged the online community, causing the company’s China Division to issue a public apology the following day.
Garden202011
November 2020
by Bill Zajicek, president, Minnesota China Friendship Garden Society.

There were two large volunteer projects at the garden this summer/fall. As a result, the rock garden was completely weeded and mulched; the donor stanchion received a new coat of paint, the Hmong Heritage Wall was painted, and as a gift from the Minnesota Peony Society, nine peonies were planted: three each of herbaceous “Krinkled White,” herbaceous “America Red” and tree peonies (Fuji-Zome-Goromo, Renkaku, Tai Hai)!!!
HKU
November 2020
By Elaine Dunn

The Hong Kong University (HKU) appointed two mainland Chinese scholars to its governing council, one of whom is alleged to have direct ties to the Chinese Communist Party (CCP).
Book Review 202011
November 2020
By China Insight

You may notice the more-than-usual number of books included this issue. With Christmas giving around the corner and the snowy winter approaching, China Insight thought these titles may provide gift ideas or just material for a “good read” in front of the fireplace.
Enjoy!
GoodJob_Deed
November 2020
[ST. PAUL]
– Minnesota Department of Employment and Economic Development (DEED) Commissioner Steve Grove announced the #GoodJobsNow campaign with Rick Trontvet from Marvin Windows in Warroad and Traci Tapani from Wyoming Machine in Stacy.

By Yu Yongding and Fu Yu, China Daily

China's trade surplus climbed in July to its highest level in 18 months, raising new questions about whether the country's currency remains undervalued despite government efforts to introduce a more flexible exchange rate. Chinese officials claim the pace of reform and appreciation is gradual and controllable, but nonetheless the United States Congress has pushed to pass measures penalizing Chinese exporters, especially as the November midterm elections approach. Yu Yongding, an academician of the Chinese Academy of Social Sciences and former member of the Monetary Policy Committee of the People's Bank of China, recently spoke on currency reform and the trade balance between China and the U.S. in an interview with China Daily reporter Fu Yu.

By Yu Yongding and Fu Yu, China Daily

China's trade surplus climbed in July to its highest level in 18 months, raising new questions about whether the country's currency remains undervalued despite government efforts to introduce a more flexible exchange rate. Chinese officials claim the pace of reform and appreciation is gradual and controllable, but nonetheless the United States Congress has pushed to pass measures penalizing Chinese exporters, especially as the November midterm elections approach. Yu Yongding, an academician of the Chinese Academy of Social Sciences and former member of the Monetary Policy Committee of the People's Bank of China, recently spoke on currency reform and the trade balance between China and the U.S. in an interview with China Daily reporter Fu Yu.

Q: Is the re-introduction of a flexible exchange rate partly a response to foreign pressure?

A: To allow the renminbi to appreciate when there is an excess supply of U.S. dollars is in China's own interests. It is not a matter of yielding to foreign pressure. In fact, early this year when the Chinese economy had achieved a strong V-shaped rebound, a plan to return to a more flexible exchange rate was already in the works. Rumblings from U.S. politicians delayed rather than prompted the yuan's depegging.
 
China knows well that, despite its tremendous progress, its economic development is unbalanced and unstable, and hence it must speed up the paradigm shift in how it develops. To allow the yuan exchange rate to reflect supply and demand on the foreign exchange rate market is an indispensable element of China's paradigm shift.

China has been running the so-called twin surpluses (current account surplus and capital account surplus) for two decades. This irrational pattern of international balance of payments represents a gross misallocation of resources. When a country with an inflexible exchange rate is running twin surpluses, the country has to pile up foreign exchange reserves. The accumulation of the borrowed reserves means that China has failed to translate capitals it attracted with high costs into imports of capital goods, technology and managerial skills. Instead, it lends the capitals back to the U.S. with very low returns.

Besides the fact that persistent twin surpluses and the resultant accumulation of foreign exchange reserves represent a massive wealth transfer from China to the U.S., securities from the U.S. government are not as safe as we used to believe, due to the steady increase in the U.S.' net foreign debt and the rapid deterioration of its fiscal outlook.

Q: Will the reform inevitably lead to the appreciation of the yuan?

A: According to the People's Bank of China, the yuan exchange rate will be based on market supply and demand, and determined with reference to a basket of currencies.
If the yuan exchange rate is entirely decided by demand and supply in the foreign exchange market, it may appreciate significantly because of the excess of the U.S. dollar vis-à-vis the yuan in the foreign exchange market.

However, if the yuan pegs to a basket of currencies, it may appreciate or depreciate depending on changes to the exchange rates of the U.S. dollar against other major currencies in China's chosen basket of currencies regardless of an excess of U.S. dollars.

Q: Will the stronger yuan reduce the trade surplus significantly?

A: The exchange rate is just one of many factors that decide trade balance. Beside the exchange rate, China's trade balance is also influenced by growth in the global economy as well as the domestic economy.

Generally speaking, other things being equal, the yuan appreciation will reduce China's trade surplus. by reducing exports and increasing imports. China's terms of trade will be improved, its non-tradable sector will be boosted, and its outbound foreign direct investment will increase.

The appreciation will lead to the bankruptcy of certain export enterprises and trading companies, which in turn will lead to an increase in unemployment in certain sectors and regions.

However, while acknowledging the effect of currency appreciation on trade balance, its effectiveness should not be exaggerated either because China's trade pattern is characterized by the domination of processing trade.

The yuan appreciation will cause some troubles for some exporting firms, but overall the benefits will outweigh the costs. As long as the Chinese government can strike a fine balance between growth and structural adjustment, most exporters will survive and prosper. With a more balanced economy, China will be well placed for growth for another decade.

Q: Paul Krugman stated that in his back-of-the-envelope calculations, he found that for the next couple of years, Chinese mercantilism might end up reducing U.S. employment by around 1.4 million jobs. What's your view?

A: China's economic structure is vastly different from that of the U.S. China's exports to the U.S. rarely compete directly with U.S.-made goods. According to a former minister of commerce of China, the country would have to sell 800 million shirts to afford one Airbus. This is a very good illustration of the trade pattern between China and developed countries, including the U.S.

As pointed out by the former Assistant Secretary of Treasury Philip Swagel, China's trade surplus does cost jobs, "but they were lost in Malaysia, Honduras, and the other low-cost countries from which U.S. clothing and toys will be sourced as Chinese exports slow." To cut current account deficits, the U.S. must reduce its investment-savings gap. Otherwise, the appreciation of the renminbi vis-à-vis the dollar will not lead to an improvement to the U.S. trade account.

Q: Will a trade protectionist policy solve the current Sino-American trade dispute?

A: The policy dilemma for the U.S. government is how to reconcile two contradicting objectives. On the one hand, the U.S. government must use fiscal deficits to lift the economy out of recession. On the other hand, the U.S. government should reduce its current account deficit.

Promoting exports in order to reduce its current account deficit is no doubt the right policy for the U.S. This policy will achieve two objectives at the same time: growth and a reduction in the current account balance.

To achieve the reduction by artificially suppressing imports with a trade protectionist policy is counterproductive. Trade protectionism will drag the growth of the global economy down that boomerang will come back and nip U.S. exports in the bud. Instead of resorting to protectionism, the solution for the U.S. government lies in an increase in exports, which in turn depends on the American people's hard work, innovation, and creativity. Confrontation will solve nothing.

Q: Also according to Krugman, China's policy of keeping the yuan undervalued has become a significant drag on the global economic recovery. What do you think?

A: This overlooks the fact that the growth rate of China's trade surplus fell significantly in 2008 and turned negative in 2009. In real terms the growth rate of China's exports compared with the rest of the world and that of its imports were negative 10.5 percent and 1.7 percent in 2009, respectively. This is an outcome that is in no small part because imports have held up quite well due to the Chinese government's massive stimulus. package.

Moreover, as taught in every introductory macroeconomics course, when calculating the contribution of the trade balance to overall economic growth, it is the change in trade balance - not the absolute size - that matters.

Because China sucked in imports at a greater pace than it pushed out exports in 2009, it made a positive contribution to the global recovery. As pointed out by Pieter Bottelier, a former head of the World Bank's office in Beijing, "China did more than any other country to pull the world out of the recession".

Reprinted by permission of China Daily.

 

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CHINAINSIGHT (CI) is published monthly ((except July/August and November/December are combined) by China Insight, Inc., an independent, privately owned company started in 2001 and headquartered in the Twin Cities area of Minnesota.

CHINAINSIGHT is the only English-language American newspaper to focus exclusively on connections between the United States and the People’s Republic of China (PRC).

Our goal is to develop a mutual understanding of each other’s cultures and business environments and to foster U.S.-China cultural and business harmony.