Global Sources (GSOL) CEO on China's currency and textile quotas (1Q05 conf call)

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Global Sources (ticker: GSOL) Chairman and CEO Merle Hinrichs hosted his company's Q1 2005 earnings results conference call on May 12th. While Hinrichs faced brutal attacks from callers claiming management misled investors, he did offer some frank thoughts on Chinese currency re-valuation and the possibilities for US imposed textile quotas:

On currency re-valuation

....First, on the re-evaluation of the Renminbi, it would take a substantial change -- it would have to be a substantial change to make a difference in the attractiveness of exports of consumer products from China -- substantial meaning 20, 25%. I don't think that is going to happen. If there is a re-evaluation, it should be probably something less or south of 10%, and that will not have a major impact from (indiscernible) the attractiveness or the price-attractiveness of Chinese exports. In fact, with the re-evaluation of the Renminbi, it's going to make most commodities -- of course that's much cheaper, at least those commodities that are imported to China.

On textile quotas

....First of all, I don't see the U.S. imposing -- (technical difficulty) -- a blanket quota across all textile categories. In fact, the contrary -- the Chinese government or (indiscernible) has indicated that -- (technical difficulty) -- not be a substantial cause of substantial diminution in exports from China. If the currency is revalued and there is, of course, great anticipation that that will take place, I think, as you will see, the issue regarding quotas to go away, literally.

(Quotes are from the CCBN StreetEvents transcript.)

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