Thursday, January 29, 2004
Re: Outsourcing

Picking up the Outsourcing issue again:

1) Kerry's proposal #7 talks of a "Manufacturing Extension Partnership which helps American manufacturers remain competitive." Any info about this MEP? While Kerry talks about the unfair subsidies that China gives its manufacturing units, what does the MEP envisage?

2) What about proposal #9, reforming the health-care system, made you nod? How do you think they will go about it? Also, I'm not sure I understand how it will impact the manufacturing economy.

3) What did you think of proposal #3, using domestic tax-incentives?

4) About the currency manipulation by Asian economies: Isn't it true that the Chinese RMB would fall against the $ if it was unpegged? In that case, wouldn't it increase the price competitiveness of Chinese goods? Explain to me the funda here. I presume that the Chinese must be using an artificially hi exchange-rate to facilitate certain imports. To what extent do Chinese exports depend in imports of inputs? I do recall that pre-reform, the artificially hi exchange rate was maintained because of their import-substitution economy.

Would be great if u could shed any light on these points, especially pt (4).

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