(North of Tokyo in Winter)Reflection on the Davos Forum and Chinese Secret Operations
(Réflexion sur le forum de Davos et le chinois opération secrète)
Now it is past the Sunday noon in Japan.
Snow is falling here and there in and around Tokyo.
I planned to take off work on EEE Reporter today, but late last night I watched a cable TV broadcast, a rare occasion for me in these days for some reasons, on a debate in the Davos Forum and felt like writing some even this Sunday.
It is Mr. George Soros' expression that got my attention: "The sixty year credit expansion based on US dollar as a key currency is going to end," or some meaning like that.
It was also impressive that Mr. Lawrence Summers supported, not as a panel but an audience at the front line of the seminary hall, an idea on installing a sheriff to monitor the world monetary system Mr. Soros proposed.
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A New Sheriff
Finally, Soros proposed the motion that the financial world needs a new sheriff. Left to their own devices, markets go from "euphoria to despair", he said. Globalization has allowed the US to suck up the savings of the world and consume 6% more than it produces. What the world is now witnessing is the end of a 60-year-old credit system based on the dollar. "I think we are seeing the end of the dollar as the international currency and we need a new sheriff," he said.
But, Nandan M. Nilekani, Executive Co-Chairman, Infosys Technologies, India; Member of the Foundation Board of the World Economic Forum, dismissed the idea as "impracticable, irrelevant and implausible." He said that the origin of the current woes is essentially domestic and, therefore, it is up to national institutions to resolve them. If existing international institutions are not able "to get their act together" in areas such as trade and the environment, there is little hope for any new financial sheriff. "The solution is certainly not a new sheriff who cannot shoot straight," he said.
From the floor, a participant said there is a need to reform existing institutions, such as the International Monetary Fund, to make them more representative. Summers said that he agreed with Soros that the authorities need to do what they have not been doing, but he doubted that this will involve the creation of a new sheriff. "We have a lot of people with sheriff responsibilities but they have been averting their gaze," he said. Another participant suggested that a new international steering committee is needed to bring together the world’s three economic superpowers – the US, the EU and China. Gurria urged better coordination and above all better communication between the financial authorities and the markets.
The vote went 25% to 75% against a new sheriff.
http://www.weforum.org/en/knowledge/KN_SESS_SUMM_23393?url=/en/knowledge/KN_SESS_SUMM_23393
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Additionally, another motivation for my writing today is related to the above another participant's comment: "Another participant suggested that a new international steering committee is needed to bring together the world’s three economic superpowers – the US, the EU and China."
This statement implies two things:
(1) Chinese secret agency's activities in the Davos Forum:
The Chinese Communist Party now has a huge budget for their activities to influence prominent people in the world, including Japan and the U.S.
You have to remember that China also used a huge fund to prevent Japan from becoming a permanent member of the Security Council of the United Nations a couple of years ago.
Chinese secret agencies are still actively involved in acquiring people who would act and speak in accordance with the strategic plan of the Chinese Communist Party.
So, in Davos, some participants spoke, as if so influenced or brainwashed by the Chinese Communist Party, in order to harm reputation of Japan, a responsible contributor to the global financial stability in decades, and misleadingly praise China, an irresponsible new comer to the global financial stage without respecting democracy, freedom, human rights, and the Holy Books including the Gospel.
(2) The lack of understanding the true state and structure of Chinese economy:
Most of participants in the Davos Forum did not look like having read a report issued by Congressional Research Service:
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[Table 1: China’s Foreign Exchange Reserves and Overall Current Account Surplus: 1995-2006
1995.......US$ 75.4 billion
1996..........107.0 billion
1997..........142.8 billion
1998..........149.2 billion
1999..........157.7 billion
2000.........168.3 billion
2001.........215.6 billion
2002.........291.1 billion
2003.........403.3 billion
2004.........609.9 billion
2005.........818.9 billion
2006........1066.3 billion]
(In 2007, the ranking of countries with larger foreign exchange reserves:
China...1528 bn
Japan.... 973 bn
EU......... 501 bn
Russia....478 bn
India.......288 bn
Taiwan....270 bn
South Korea..262 bn)
Chinese data indicate that the share of China’s exports produced by foreign-invested enterprises (FIEs) in China has risen dramatically over the past several years.
As indicated in Table 5, in 1986, only 1.9% of China’s exports were from FIEs, but by 1996, this share had risen to 40.7%, and by 2006 it had risen to 58.2%.
A similar pattern can be seen with imports: FIEs accounted for only 5.6% of China’s imports in 1986, rose to 47.9% by 2000, and to 59.7% in 2006.
FIEs import raw materials and components (much of which come from East Asia) for assembly in China, after which point, much of the final product is exported. As a result, China tends to run trade deficits with East Asian countries and trade surpluses with countries with high consumer demand, such as the United States.
These factors have led many analysts to conclude that much of the increase in U.S. imports (and hence, the rising U.S. trade deficit with China) is a result of China becoming a production platform for many foreign companies (who are the largest beneficiaries from this arrangement), rather than unfair Chinese trade policies.
The rising importance of FIEs may represent a fundamental change in trade between China and the United States that could affect the bilateral trade deficit independently of the exchange rate regime.
http://www.au.af.mil/au/awc/awcgate/crs/rl32165.pdf
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In sum, Chine is not yet in a position to guide the world, but China must continue to be monitored, supervised, and led by stakeholders such as Japan and the United States.
I once wrote that you should not trust in rich people gathering at the Davos Forum.
Indeed, some participants looked like acting for further boosting dangerous credit and credibility given to China for China's selfish interest in the coming era of limited natural resources.
Truly, the Chinese Communist Party is trying hard to survive without giving democracy, freedom, and safety to its one billion poor farmers and laborers while leveraging its position in the global economic structure and regime that has been bolstered by Japan peacefully for decades, since Japan has had no intention to politically control the world including China.
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The God has let the French bank's huge loss exposed as a timely warning to the Davos Forum.
If one employee in a bank in Europe could cause a billion dollars loss, what is a merit in such talks in Davos?
Financial security in the world today seems to be supported by an ethical level of workers in the financial sector, in addition to hard-working honest people in various sectors in the world.
But, there must be a big difference between dollars simply accumulated by some Islamic countries and Russia timely selling crude oil, dollars accumulated by China owing to business activities of foreign companies in China and their huge investment, and dollars earned by Japan, Taiwan, Korea, etc. due to hard work of their people in real industries in a tested manner based on their honest research and development activities for decades.
(Still the snow is falling.
Don't catch a cold since when it stops snowing the moisture from snow takes heat away from the body.)
Proverbs 26:1 As snow in summer, and as rain in harvest, so honour is not seemly for a fool.
Proverbs 31:21 She is not afraid of the snow for her household: for all her household are clothed with scarlet.