Author: vincent01

Is Barack Obama's re-election good news for China?   [Copy link] 中文

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Post time 2012-11-7 14:00:38 |Display all floors
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Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois.

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Post time 2012-11-7 14:01:25 |Display all floors
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Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois.

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Post time 2012-11-7 14:02:17 |Display all floors
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Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois.

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Post time 2012-11-7 14:03:12 |Display all floors
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Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois.

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Post time 2012-11-7 14:04:42 |Display all floors
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Supporters of US President Barack Obama celebrate as CNN projects victory for Obama on election night November 6, 2012 in Chicago, Illinois.

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Post time 2012-11-7 14:20:11 |Display all floors
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Writer's real name is Lau Guan Kim.  lau_guan_kim is for commentary and analysis. He writes also under another alter ego jinseng. I will respond to good reasoned debate. Mudslingers shall be ignored. What I do not like are ignorance, stupidity, chauvinism and bigotry. The other party has as much right as I have until it resorts to insults and nuisance.

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Post time 2012-11-7 15:04:44 |Display all floors
I don't think it's good news for China - because Obama will most likely continue his spending frenzy and keep increasing debts - which means the market price of US treasury bonds will likely decrease. So the asset of China and the Chinese people will pay for a large share of what Obama spends. China can choose to either buy the new treasury bonds (and straightly pay) or to not buy (and let the FED print more money, for the assets to be bought). If China decides to not buy more assets, it might have to either face a recession (the Yuan would appreciate, China'd be less competitive) and if it buys, and inflation (China buys its Dollars with Yuan - so there'd be more Yuan in the market.)

Because substantial tax increases are as unlikely in the USA as it would be for China to sell all its US-dollar assets, I don't think that China won in this election.

However, considering political power, China might have as well cut itself a deal: Obama focuses less on the USA's international influence and aims to make the US military smaller, which might increase China's influence in the Asian-Pacific region - a valuable asset, if China wants to become a regional super power!

Bottomline, Obama might harm China economically more than Romney would have - but Romney would have certainly been tougher on China politically, so Obama's election might, at least in the short term, increase China's political influence both, regionally and globally.

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