Free trade with China. What are your thoughts?

[Ixion]

No, it doesn't have to come back in. A net outflow simply gets taken up by a reduction in living standards - everybody has less money.

Initially this shows up as reduced standards of services - public transport, health education. The country finds it can't afford hospitals and operations, can't afford to pay teachers, can't afford new roads. Then it ripples down to individual living standards. More people can't afford decent housing. Unemployment rates go up. And so on.

Simply put,every dollar that multinational corporates send overseas comes out of someones wage packet. The more money the corporates take out of the country, the less there is for us.

Say no to globalisation. Vote communist.

[scumdog]

Simply put,every dollar that multinational corporates send overseas comes out of someones wage packet. The more money the corporates take out of the country, the less there is for us.

Say no to globalisation. Vote communist.

Then in oh, say 80 years we can ditch the communism and do it back to them!

[Finn]

Say no to globalisation. Vote communist.

China is communist and they have finally seen the light and are opening up their market to globalisation. Capitalism will always win in the end.

Religion, Dictators and Helen Clark must go!!!

[chickenfunkstar]

I can't see why that's true in the long run.

New Zealand dollars can only be spent in New Zealand. Sure there's a big capital inflow at the moment, but that should decrease when interest rates go down and the economy starts to cool down. The value on the NZ$ will start to fall making it a really good time to be an exporter. Its already starting to happen.

[scumdog]

I can't see why that's true in the long run.

New Zealand dollars can only be spent in New Zealand. Sure there's a big capital inflow at the moment, but that should decrease when interest rates go down and the economy starts to cool down. The value on the NZ$ will start to fall making it a really good time to be an exporter. Its already starting to happen.

And a really bad time to be an importer.

Anybody got an idea how much of our product 'on the shelves' in NZ is imported? (Motorbikes, leathers, dvd players etc etc)

[chickenfunkstar]

Heaps, there'll be even more if we open up our trade barriers. Then we can concentrate on producing what we're good at. China can do the same. Who's the loser?

[scumdog]

Heaps, there'll be even more if we open up our trade barriers. Then we can concentrate on producing what we're good at. China can do the same. Who's the loser?

We are. See post #86

[Streetwise]

do you really think that are going to want to import from us. Like what milk products, Thats about the only thing we have over them at this stage. But that will not be for long as fonterra is teaching the asian market how to do everything themselves. Right through to opening a plant over there. its a win lose situation and we will be the loosers.

[chickenfunkstar]

We are. See post #86

I'm not really sure why you think that. If its because we're going to be buying more stuff from China, thereby sending all our money that could have gone to NZ firms then thats not true.

If we buy heaps of goods from China then there's gonna be a whole heap of NZ$ in China. However NZ$ can't buy anything in China so They'll have to be swapped to Chinese money. If there's enough NZ$ in China, The Chinese will hardly be able to give them away so the NZ$ will depreciate. Then exporters will find it cheaper to send stuff to China, Chinese tourists will find it cheaper to come over here and spend up large as tuorists tend to do.

All we've lost is is the inefficiency of us trying to make shoes and of the Chinese trying to grow stuff / be a tourist destination.

[Ixion]

I can't see why that's true in the long run.

New Zealand dollars can only be spent in New Zealand. Sure there's a big capital inflow at the moment, but that should decrease when interest rates go down and the economy starts to cool down. The value on the NZ$ will start to fall making it a really good time to be an exporter. Its already starting to happen.

International trade is not conducted in NZ dollars. And a falling dollar aids exporters,yes. But, since the premise is free trade , that necessitates us having something to export that China wants. And doesn't have cheaper themselves . Which is ?

And conversely a falling dollar increases prices of everything we import. Like oil. And bikes . And most everything you see around you. NZ is a net importer , a falling dollar worsens the living standard of everyone except farmers.

Moreover , in product sectors where we export we are price takers, in sectors where we import we are price acceptors. Our exports are commodities , we do not have any ability to adjust prices. We are at the mercy of the whim of the international cartels.

Do not look for relief in lower interest rates either. A collapsing economy, interest rates stay high. Because of those increased prices on imports, leading to inflation. And the only weapon the Reserve Bank wants to use to control inflation is interest rates (there are other, and better ones, but they will not use them - ideologically incorrect) .

[Ixion]

..
If we buy heaps of goods from China then there's gonna be a whole heap of NZ$ in China. However NZ$ can't buy anything in China so They'll have to be swapped to Chinese money. If there's enough NZ$ in China, The Chinese will hardly be able to give them away so the NZ$ will depreciate. ..

International trade is almost never denominated in $NZ. It is in Euros, $US or sometimes sterling.

We do not send New Zealand dollars to China. We sell in $US , China buys in $US. China is quite happy to build up $US credit balances (which can handily be spent on weapons).

And the Chinese yuan is not convertable into anything. The Chinese *talk* free trade, but, like the USA , they never practice it. I actually have a roll of Chinese renminbi in my drawer, about $100 worth at the notional exchange rate. Can I exchange it for NZ dollars (or anything else)? No, not a chance.No bank will take them. The Chinese government do not allow their currency to be exchanged. Or to be taken out of the country either .

Free trade is what Bubba practices with his new cell mate. "I give you a root up the arse, you give me a blowjob. We're both giving each other something , that's fair isn't it. Now bend over"

[Grahameeboy]

China is communist and they have finally seen the light and are opening up their market to globalisation. Capitalism will always win in the end.

Religion, Dictators and Helen Clark must go!!!

No Mr Finn..................

[chickenfunkstar]

International trade is almost never denominated in $NZ. It is in Euros, $US or sometimes sterling.

We do not send New Zealand dollars to China. We sell in $US , China buys in $US. China is quite happy to build up $US credit balances (which can handily be spent on weapons).

Great then, the currency will fall against the US$, there's lots of stuff we can export there. What is all this NZ money gonna do while its in the US$. How does it not come back to NZ in the end?

[Streetwise]

Great then, the currency will fall against the US$, there's lots of stuff we can export there. What is all this NZ money gonna do while its in the US$. How does it not come back to NZ in the end?

dosnt the us has a protected market ???,

[Streetwise]

does anyone here belong to the Printing and engineers union,??? If so you dollars support this labour govt and there ideas, Ive heard recently that a percentage of the funds giving to the union goes directly into the coffers for the labour govt, Now thats support....