China and Japan must remember the spirit of their 1978 peace treaty

[Chinese-Dragon]

Here you go...

IMF to China: Plaza Accord Didn’t Sink Japan - China Real Time Report - WSJ

Like I said, America wants us to do a "Plaza Accord" to ourselves.

The Chinese government is not buying it.

We have already set out the path for our upcoming financial reforms in the next two years, starting with interest rate liberalization, currency reform and then capital account reforms.

The main thing is these changes will be slow, it will not be a one-off large-scale appreciation like the Plaza Accord, which Japan's domestic industries had NO chance to catch up with.

And we have the funding to achieve it, our currency reserves alone are over $4 trillion (more than the rest of the world combined), and our surpluses are so large that even our massive overseas investment drive cannot absorb it.

America will have to wait patiently while our financial reforms are revealed over the next two years, and the pace of reform will be very slow and very steady. For our own benefit, not for the benefit of America.

 

[gambit]

Like I said, America wants us to do a "Plaza Accord" to ourselves.

The Chinese government is not buying it.

We have already set out the path for our upcoming financial reforms in the next two years, starting with interest rate liberalization, currency reform and then capital account reforms.

The main thing is these changes will be slow, it will not be a one-off large-scale appreciation like the Plaza Accord, which Japan's domestic industries had NO chance to catch up with.

And we have the funding to achieve it, our currency reserves alone are over $4 trillion (more than the rest of the world combined), and our surpluses are so large that even our massive overseas investment drive cannot absorb it.

America will have to wait patiently while our financial reforms are revealed over the next two years, and the pace of reform will be very slow and very steady. For our own benefit, not for the benefit of America.

Your charge that Plaza Accord was somehow a nefarious plot by the US in order to put Japan in her proper place was debunked by the IMF itself.

It is funny that China is a recent capitalist convert and most of you barely know how to balance a checkbook and yet have no problems making pronouncements on global economic issues.

 

[Chinese-Dragon]

Your charge that Plaza Accord was somehow a nefarious plot by the US in order to put Japan in her proper place was debunked by the IMF itself.

It is funny that China is a recent capitalist convert and most of you barely know how to balance a checkbook and yet have no problems making pronouncements on global economic issues.

Apparently you did not even read your own link.

In an unusual move, the IMF devoted an entire three-page section of the report to dissecting and rebutting the argument that the Plaza Accord of 1985—in which Japan agreed to a substantial rise in the yen against the dollar—led to its economic crisis later that decade.

The real problem, the IMF argues, was that Japanese authorities were overly concerned about the effect of yen appreciation and overreacted to a slowdown in the first half of 1986, which led them the implement “a sizeable macroeconomic stimulus” that year.

Even they themselves said that it was the overreaction to the appreciation of the Yen (Plaza Accord) which caused the Japanese economic crash. Which wouldn't have happened if there was no Plaza Accord.

As for "nefarious plot", I don't think ANYONE denies that the Plaza Accord was carried out because of the poor performance of the US domestic economic and domestic industries in the 1980's, it was meant to help the US economy.

Plaza Accord - Wikipedia, the free encyclopedia

There is no "nefarious plot" since it was openly acknowledged that the Plaza Accord was designed to help the struggling US economy and their domestic industries.

And Japan was the one who suffered for it, leading to the end of their economic growth story.

If Japan had a choice, they would have never implemented such a drastic appreciation of their currency, especially when their economic growth was dependent on exports.

 

[gambit]

Apparently you did not even read your own link.



Even they themselves said that it was the overreaction to the appreciation of the Yen (Plaza Accord) which caused the Japanese economic crash. Which wouldn't have happened if there was no Plaza Accord.

As for "nefarious plot", I don't think ANYONE denies that the Plaza Accord was carried out because of the poor performance of the US domestic economic and domestic industries in the 1980's, it was meant to help the US economy and companies.

Plaza Accord - Wikipedia, the free encyclopedia

There is no "nefarious plot" since it was openly acknowledged that the Plaza Accord was designed to help the struggling US economy and their domestic industries.

And Japan was the one who took the hit, leading to the end of their economic growth story.

I read the link, but you did not understand it.

The agreement have burdens on everyone, including the US which devalued the dollar. For Japan, she was to be more liberal in access to internal markets.

The IMF debunked your argument. Deal with it...

 

[Chinese-Dragon]

I read the link, but you did not understand it.

The agreement have burdens on everyone, including the US which devalued the dollar. For Japan, she was to be more liberal in access to internal markets.

The IMF debunked your argument. Deal with it...

No, the IMF said it was the "overreaction" to the Plaza Accord which caused Japan's economic crash. Which would never have happened if the Plaza Accord did not exist.

Read your own link, it's right there.

I read the link, but you did not understand it.

The agreement have burdens on everyone, including the US which devalued the dollar. For Japan, she was to be more liberal in access to internal markets.

How did it burden the USA?

The USA's domestic industries were struggling greatly due to the high value of the dollar, Japan was benefiting greatly from the low value of the Yen.

Why would Japan, an export-dependent economy, willingly volunteer to drastically appreciate their currency, therefore killing the competitiveness of their exports?

America only benefited from it, Japan only lost out from it.

And as for American advice about the Yuan, if their advice is so great, how come America's economy is currently in NEGATIVE economic growth?

 

[Aepsilons]

Plaza Accord had nothing to do with it. Period.

 

[Chinese-Dragon]

It is funny that China is a recent capitalist convert and most of you barely know how to balance a checkbook and yet have no problems making pronouncements on global economic issues.

And ironically, America is the new socialist convert, courtesy of Obamacare.

If America asked your country of origin (Vietnam) to sign a new version of the Plaza Accord, to drastically reduce Vietnamese competitiveness and increase American competitiveness via currency values, do you think Vietnam would accept it?

Plaza Accord had nothing to do with it. Period.

Apparently the IMF, which is mostly controlled by America, disagrees with you.

They said it was the Japanese overreaction to the Plaza Accord (forced appreciation of the Yen) that caused the Japanese economic crash.

Tell me Nihonjin, honestly, why would an export-dependent Japan willingly volunteer to massively appreciate their own currency, just to help American exporters? How did that benefit Japan?

 

[Aepsilons]

And ironically, America is the new socialist convert, courtesy of Obamacare.

If America asked your country of origin (Vietnam) to sign a new version of the Plaza Accord, to drastically reduce Vietnamese competitiveness and increase American competitiveness via currency values, do you think Vietnam would accept it?



Apparently the IMF, which is mostly controlled by America, disagrees with you.

They said it was the Japanese overreaction to the Plaza Accord (forced appreciation of the Yen) that caused the Japanese economic crash.

Tell me Nihonjin, honestly, why would an export-dependent Japan willingly volunteer to massively appreciate their own currency, just to help American exporters? How did that benefit Japan?

The dollar became cheaper just as Japan was reaching the height of its economic prowess in manufacturing and at a time when most Japanese had huge amounts of personal savings.

The Bank of Japan had lowered interest rates from 5 percent in 1985 to 2.5 percent by early 1987.

Japanese banks, which had previously lent mostly to corporations, now had ample funds to lend at a time when their major corporate customers were flush with cash thanks to their trade surpluses and the availability of worldwide equity markets, which competed directly with Japanese banks.

So the banks began freely lending to Japanese firms and individuals, who purchased real estate, which increased the paper value of land assets. This created a vicious cycle in which land was used as collateral to obtain further loans, which were then used to speculate on the stock market or to purchase more land. This drove up the paper value of land further, while the banks continued to grant loans based on the overvalued land as collateral.

There was little questioning by either the government or the banks themselves over how the loans would be repaid or what would happen once land values started dropping.

 

[Chinese-Dragon]

The dollar became cheaper just as Japan was reaching the height of its economic prowess in manufacturing and at a time when most Japanese had huge amounts of personal savings.

The Bank of Japan had lowered interest rates from 5 percent in 1985 to 2.5 percent by early 1987.

Japanese banks, which had previously lent mostly to corporations, now had ample funds to lend at a time when their major corporate customers were flush with cash thanks to their trade surpluses and the availability of worldwide equity markets, which competed directly with Japanese banks.

So the banks began freely lending to Japanese firms and individuals, who purchased real estate, which increased the paper value of land assets. This created a vicious cycle in which land was used as collateral to obtain further loans, which were then used to speculate on the stock market or to purchase more land. This drove up the paper value of land further, while the banks continued to grant loans based on the overvalued land as collateral.

There was little questioning by either the government or the banks themselves over how the loans would be repaid or what would happen once land values started dropping.

And why did they have to lower interest rates? Because of the Plaza Accord, which forced the Yen to significantly appreciate, hurting the Japanese export-led growth model. The only way for them to save themselves was to lower interest rates and spark a credit boom, but a credit boom based on collapsing exports is never a good idea.

Again: Tell me Nihonjin, honestly, why would an export-dependent Japan willingly volunteer to massively appreciate their own currency, just to help American exporters? How did that benefit Japan?

 

[Jlaw]

Here you go...

IMF to China: Plaza Accord Didn’t Sink Japan - China Real Time Report - WSJ

After the September 1985 Plaza Accord, in which leaders from the world’s five biggest economies made agreements on economic policy, the yen appreciated and economic growth fell from 4.4 percent in 1985 to 2.9 percent in 1986.

You know that during beginning of 2014 japan devalued its currency by printing money, as a result, Japanese stock market rose by 25% by the next four months.

the comments by the people in your article are lot smarter than the IMF author for selling lies.

Chinese officials are also not that stupid to believe the lies.

 

[Aepsilons]

Again: Tell me Nihonjin, honestly, why would an export-dependent Japan willingly volunteer to massively appreciate their own currency, just to help American exporters? How did that benefit Japan?

Yes we did sign the Plaza Accord with 5 other countries, which depreciated the dollar against the yen and was to increase US exports by making them cheaper. But it also made it cheaper for Japanese companies to purchase foreign assets. And they went on an overseas buying spree, picking off properties like the Rockefeller Center in New York and golf courses in Hawaii and California.

By December 1989, the benchmark Nikkei 225 stock average had reached nearly 39,000. But beginning in 1990, the stock market began a downward spiral that saw it lose more than $2 trillion by December 1990, effectively ending the bubble era.

During the Bubble Era, @Chinese-Dragon , there was too much confidence on our (US and Japanese) part that the accord would help both of us out. It was revealed after the crash of the corrupt activity within Japanese and even American firms , due to the unregulation of insider trading etc.

 

[Chinese-Dragon]

Yes we did sign the Plaza Accord with 5 other countries, which depreciated the dollar against the yen and was to increase US exports by making them cheaper. But it also made it cheaper for Japanese companies to purchase foreign assets. And they went on an overseas buying spree, picking off properties like the Rockefeller Center in New York and golf courses in Hawaii and California.

By December 1989, the benchmark Nikkei 225 stock average had reached nearly 39,000. But beginning in 1990, the stock market began a downward spiral that saw it lose more than $2 trillion by December 1990, effectively ending the bubble era.

During the Bubble Era, @Chinese-Dragon , there was too much confidence on our (US and Japanese) part that the accord would help both of us out. It was revealed after the crash of the corrupt activity within Japanese and even American firms , due to the unregulation of insider trading etc.

How does helping American exporters, at the expense of Japanese exporters, help Japan?

Why was it that only Japan's growth rate collapsed after the Plaza Accord? Not America's?

How come it is Japan's economy that has suffered several lost decades of zero growth, not America?

In fact, the American economy soared after the 1980's. Thanks in part to the large boost to their exporters from the Plaza Accord, and the weakening of an economic competitor like Japan.

 

[Jlaw]

Yes we did sign the Plaza Accord with 5 other countries, which depreciated the dollar against the yen and was to increase US exports by making them cheaper. But it also made it cheaper for Japanese companies to purchase foreign assets. And they went on an overseas buying spree, picking off properties like the Rockefeller Center in New York and golf courses in Hawaii and California.

By December 1989, the benchmark Nikkei 225 stock average had reached nearly 39,000. But beginning in 1990, the stock market began a downward spiral that saw it lose more than $2 trillion by December 1990, effectively ending the bubble era.

During the Bubble Era, @Chinese-Dragon , there was too much confidence on our (US and Japanese) part that the accord would help both of us out. It was revealed after the crash of the corrupt activity within Japanese and even American firms , due to the unregulation of insider trading etc.

You have a slave mentality. In the 80s, Nikkei 225 was close to 40,000. Now it's 15,128 in 2014. Do the math.

 

[Aepsilons]

How does helping American exporters, at the expense of Japanese exporters, help Japan?

Why was it that only Japan's growth rate collapsed after the Plaza Accord? Not America's?

How come it is Japan's economy that has suffered several lost decades of zero growth, not America?

In fact, the American economy soared after the 1980's. Thanks in part to the large boost to their exporters from the Plaza Accord, and the weakening of an economic competitor like Japan.

20/ 20 hindsight is always good, buddy. At the time, we didn't expect it to cause such an effect.

What can we do. We can't go back in time.

 

[Chinese-Dragon]

20/ 20 hindsight is always good, buddy. At the time, we didn't expect it to cause such an effect.

What can we do. We can't go back in time.

Now maybe you can see why we always reject America's "suggestions" that we do a massive upwards appreciation of the Yuan in a one-off revaluation. Which would simply benefit America's exporters, while killing our own.

America benefited hugely from the Plaza Accord, their economy went from being stagnant during the early 1980's, to soaring hugely for the next two decades after it.

Whereas Japan went into stagnation after it.

Only America benefited. And it makes sense, why would they sacrifice their own economy to help an economic competitor? No one would do that.

@Developereo, what do you think?