Ricard

Chinese Wind Power Plant Coming to U.S. Soil

Great comment.

1) Perhaps I am not seeing your point here. If the Chinese invest in a project in America using American dollars today, it will prove to be a misstep economically if they do decouple the yuan, as future profit streams would come to them in the form of devalued dollars. That leads to your point #2:

2) Agreed that this move seems to be much more politically motivated than by other factors.


On Nov 18 05:33 PM Mark Bern wrote:

> John - This is a very positive story, so I don't want to ruin it
> with a negative spin. One thing I do wonder is that if the Chinese
> are interested in making investments in manufacturing on US soil
> there must be a reason. Two reason, I think.
>
> 1. If China decouples the yuan from the US$ their investments here
> may become cheaper for them than investments in their homeland.<br/>
>
> 2. The obvious political gains they make with such a huge project
> could open doors for them to make additional investments in the future
> with less scrutiny and questions about why now.
>
> After all, they want to make money from US consumption, one way or
> the other, so they can use their profits to continue their efforts
> to increase domestic demand. A third motive could be to shore up
> their biggest customer through a more direct investment approach
> to ensure that we are able to pay the interest on their Treasury
> investments. They need our economy to strengthen for their economy
> to run on all cylindars. The Chinese are not stupid.

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