WCA January 2008

From the americas

Apparently this is deemed worth a try. On 19 th October, a day before the start of meetings in Washington of the International Monetary Fund, the G-7 finance ministers in their strongest words to date called on China to let the yuan float more freely vis-à-vis the dollar and other world currencies. (‘G-7 Steps Up Pressure On China on Currency,’ 20 th October). As the Chinese see it, however, accelerated appreciation of the yuan could have a destabilising effect in China. In the Chinese view, this contingency justifies the caution that others, with other priorities, see as foot-dragging. Mr Irwin wrote: “Hours before [the G-7 statement] was released, Wu Xiaoling, the deputy governor of the People’s Bank of China and one of its most powerful policymakers, said that, while the nation wishes to liberalise its exchange rate policy, any rapid change would be dangerous because things could spiral out of control and potentially disrupt the remarkable economic growth China has enjoyed in the past decade.” The Washington Times reported that Ms Wu, in arguing for a gradual approach, compared the rapid appreciation of the yuan that some Western economists advocate to the ‘shock therapy’ for economic liberalisation undertaken by post-Soviet states in the early 1990s. That approach ended badly for many of them. At the Peterson Institute for International Economics in Washington, she said: “Maybe some of you in this meeting are not as patient as we are. If we risked things too much, that would hurt the Chinese economy and thus the world economy.” No one doubts that the Chinese are more ‘patient’ than almost anyone else. Some members of the US Congress, answerable to restive exporters in their home states, have been declaring their patience wearing thin for years now. ❖ The American public likes Chinese imports much more than Washington does The claim that China is keeping the value of its currency artificially low, making its exports cheaper and imports more expensive, is not the US government’s sole complaint about Chinese trade practices. Recent disclosures about tainted food, lead-coated toys, and other questionable imports from China – many of them resulting in recalls of products from the shelves of retail outlets in the US – have led the administration of President George W Bush to set up a cabinet group to improve inspections of imports from all countries. But, according to a New York Times/CBS News poll conducted 12 th -16 th October, the American consumer declines to be stampeded into a wholesale rejection of goods from China. The poll found that, while 35% of respondents viewed Chinese imports as more dangerous than imports from other countries, a clear majority – 55% – said the recent wave of recalls does not mean that Chinese imports are any more harmful: it merely created that perception. Given that the American public is seen as increasingly health and safety conscious, these results are remarkable

– especially since 71% of respondents said they knew a product’s country of origin when they made a purchase. But even in this aware group, only a minority – 40% – said they viewed products from China as more dangerous than those of other countries. Writing in the New York Times (‘Americans Are Open to Chinese Goods, Poll Finds,’ 19 th October), Steven Weisman and Marjorie Connelly noted that the survey of 1,282 adults nationwide found the American public divided on whether the US should establish normal trade relations with China. 45% said China should have the same trade benefits enjoyed by other friendly nations; 38% said it should not. Some 17% had no opinion. The poll has a margin of sampling error of plus or minus three percentage points. Full results and the methodology of the New York Times/CBS News poll are available at www.nytimes.com/polls Japanese cars are tops in Consumer Reports reliability survey Reporting 17 th October, in advance of the 6 th November publication date of the annual Consumer Reports reliability issue, Associated Press auto writer Dee-Ann Durbin said that the influential magazine would once again rate Asian automobile brands well higher than their American rivals. Honda Motor Co and its luxury Acura nameplate topped the 2007 list, which predicts the reliability of 2008 model year vehicles on the basis of past performance. The Lexus, Scion, and Toyota brands from Toyota Motor Corp all made it into the top ten brands. Both auto makers are Japanese. Consumer Reports is published by the independent non- profit testing and information organisation Consumers Union (Yonkers, New York). Its auto ratings are based on surveys of approximately 1 million online and print subscribers who are also drivers. The 2007 survey, conducted in the spring, covered 1.3 million vehicles from the 1998 to 2007 model years. Toyota had 17 vehicles on the list of the 39 most reliable models, far more than any other auto maker. But, in addition to reporting on cars in service, the reliability issue uses the collected data to spot trends, and Ms Durbin reported that Consumer Reports found Toyota to be ‘showing cracks in its armour.’ Toyota buyers had problems with the automatic trans- mission in the V6 version of the company’s Camry sedan, the four-wheel-drive system in the V8 version of the Tundra pickup, and the accessories and audio system in the all wheel-drive Lexus GS sedan. Accordingly, when Toyota releases a new or re-designed vehicle it will no longer receive the highly prestigious and coveted automatic recommendation from Consumer Reports. The top-rated US brand was Buick, in 10 th place. Detroit-based Ford was found to be making its most reliable vehicles in years. Hummer and Land Rover were rated least reliable. As for European brands, including Jaguar and Mercedes-Benz, Ms Durbin noted that they have earned ‘dismal ratings’ from Consumer Reports over the past few years, and 17 of the models on the magazine’s least-reliable list are from Europe. Automotive

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Wire & Cable ASIA – January/February 2008