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

[gambit]

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.



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?

The Plaza Accord was necessary because the alternative was protectionism. Do you think that the export oriented Japanese economy would survive if her largest customer -- the US -- engages a trade war ? The American economy grew because of the combination of improved export and reformed internal economic policies, not because of the lowered yen alone.

 

[Chinese-Dragon]

The Plaza Accord was necessary because the alternative was protectionism. Do you think that the export oriented Japanese economy would survive if her largest customer -- the US -- engages a trade war ? The American economy grew because of the combination of improved export and reformed internal economic policies, not because of the lowered yen alone.

Yet Japan did not see any benefits from it, their growth immediately collapsed, leading to them being forced to lower interest rates, leading to an even bigger crash.

Japan's economy has been stagnant since then, with multiple decades of zero growth. A severe economic blow, one of the worst in recent history.

It was only America and American exporters who benefited, and who did exceptionally well after the 1980's.

Only America benefited from the Plaza Accord, which was designed specifically to help the struggling American economy and domestic industries. There was no way that Japanese exporters were ever going to benefit from such a huge forced appreciation of the Yen, which killed their competitiveness in favor of American exporters.

 

[Jlaw]

Effects of Plaza Accord:

The US agreed to cut the federal deficit and to lower interest rates. Japan promised a looser monetary policy and financial-sector reforms, and Germany agreed to institute tax cuts. France, the UK, Germany and Japan agreed to raise interest rates.

The impact of the intervention was immediate and within two years the dollar had fallen 46% to the deutsche mark (DEM) and 50% to the Yen (JPY). By the end of 1987, the dollar had fallen by 54% against both the D-mark and the yen from its peak in February 1985.The US Economy became geared more toward exports, while Germany and Japan increased their imports.


US really conned, or forced the Japanese to stagnant their economy.

 

[gambit]

Yet Japan did not see any benefits from it, their growth immediately collapsed, leading to them being forced to lower interest rates, leading to an even bigger crash.

Japan's economy has been stagnant since then, with multiple decades of zero growth. A severe economic blow, one of the worst in recent history.

It was only America and American exporters who benefited, and who did exceptionally well after the 1980's.

Only America benefited from the Plaza Accord, which was designed specifically to help the struggling American economy and domestic industries. There was no way that Japanese exporters were ever going to benefit from such a huge forced appreciation of the Yen, which killed their competitiveness in favor of American exporters.

Let us take a look again at what Aaron Back of the Wall Street Journal said about the IMF's position...

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

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.

“Put another way, excessive stimulus was adopted in part because there was excessive concern about the impact of appreciation.”

The Japanese did not know how the yen's appreciation would affect their economy so they overreacted by over stimulating internal consumption and investment.

The IMF’s version of events serves not only its campaign for greater appreciation of the yuan; it also reinforces the organization’s view that dangerous asset bubbles may currently be forming in China, just as they did in Japan in the late 1980s.

What the IMF is saying here is that they see parallels in China of what they saw in Japan BEFORE THE YEN'S APPRECIATION.

The safe assumption here is that no one then, and probably now, fully understood what economic bubbles can negative do to an economy. So the cautionary note here is not to overreact like the Japanese did and to temper the responses.

The IMF is saying that the Plaza Accord cannot be blamed for Japan's Lost Decade. Can you technically refute what the IMF said ? No, because like I say about all of the Chinese members here, you guys can barely balance a checkbook or manage your credit but got no problems making pronouncements about global economics.

 

[xunzi]

Let us take a look again at what Aaron Back of the Wall Street Journal said about the IMF's position...

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

The Japanese did not know how the yen's appreciation would affect their economy so they overreacted by over stimulating internal consumption and investment.


What the IMF is saying here is that they see parallels in China of what they saw in Japan BEFORE THE YEN'S APPRECIATION.

The safe assumption here is that no one then, and probably now, fully understood what economic bubbles can negative do to an economy. So the cautionary note here is not to overreact like the Japanese did and to temper the responses.

The IMF is saying that the Plaza Accord cannot be blamed for Japan's Lost Decade. Can you technically refute what the IMF said ? No, because like I say about all of the Chinese members here, you guys can barely balance a checkbook or manage your credit but got no problems making pronouncements about global economics.

Think the Plaza Accord like that of the Battle at Stalingrad that broke Nazi Germany's Camel back. Of course, there are a number of issues with Japan in the 1980s but the Plaza Accord seal their fate and force them into constant retreat, and overreact with macro economic policy. This wouldn't have happened if Japan wasn't pressure into submission by their US master.

 

[Chinese-Dragon]

Let us take a look again at what Aaron Back of the Wall Street Journal said about the IMF's position...

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

The Japanese did not know how the yen's appreciation would affect their economy so they overreacted by over stimulating internal consumption and investment.


What the IMF is saying here is that they see parallels in China of what they saw in Japan BEFORE THE YEN'S APPRECIATION.

The safe assumption here is that no one then, and probably now, fully understood what economic bubbles can negative do to an economy. So the cautionary note here is not to overreact like the Japanese did and to temper the responses.

The IMF is saying that the Plaza Accord cannot be blamed for Japan's Lost Decade. Can you technically refute what the IMF said ? No, because like I say about all of the Chinese members here, you guys can barely balance a checkbook or manage your credit but got no problems making pronouncements about global economics.

Again you failed to read and understand your own source.

According to the IMF, it was the overreaction to the Plaza Accord that did the most damage.

So it was still the Plaza Accord, since without the Plaza Accord there would be no question of overreacting to it. If it never existed, the overreaction could never have happened.

Regardless, the Plaza Accord was about benefiting American exporters, and the sluggish American economy at the time. It was not intended to benefit Japan, and in fact it had catastrophic effects on Japan, compounded by their overreaction to it.

America asked us to do the same thing, to massively appreciate the Yuan in order to take the pressure off American exporters, which would come at the cost of our own exporters. But you know our response.

 

[Chinese-Dragon]

You know, America did the same thing by the way. When their growth rates started falling, they lowered their interest rates to boost spending and credit. American interest rates have been lowered to essentially ZERO for the past several years!

So how can you blame Japan for lowering their interest rates?

The Plaza Accord forced the Yen to appreciate massively, which killed the competitiveness of Japan's exporters, and dropped their growth rate in half.

So what did they do? The same thing that America is doing today, they dropped their interest rates and started to inject stimulus into their economy, same as American quantitative easing today.

In fact American interest rates today are lower than Japan's back then, and America is still in NEGATIVE growth.

 

[mike2000]

The Plaza Accord was necessary because the alternative was protectionism. Do you think that the export oriented Japanese economy would survive if her largest customer -- the US -- engages a trade war ? The American economy grew because of the combination of improved export and reformed internal economic policies, not because of the lowered yen alone.

i agree with Gambit, the plaza accord was kind of necessary, and it avoided a trade war/protectionism. You people should know that Japan is even now still a quite close economy/society compare to the west/U.S Japan still doesnt wants to agree for more free trade, and its imposes huge trade tariffs on imports of most U.S goods like automobiles/electronics etc. In fact even recently, United States farming groups are urging that, if Japan continues to insist that it should keep import duties on its ultra-sensitive agricultural products – rice, wheat, beef and pork, dairy products, and sugar and starch – it should be excluded from Trans-Pacific Partnership (TPP) negotiation, and japanese farmers/politicians have been insisting they wont buge on this issue and many others. What do you want the U.S to do, when it provides an equal footing for japanese goods in the U.S but Japan doesnt want to provide the same to the U.S. If anything i think the U.S hass been/is too lenient on Japan(mainly because the U.S still sees it as its main ally/unsinkable aircraft carrier in Asia.).
The Japanese Government has been protecting Japan's automakers through preferential allocation of foreign currency, providing technical assistance for auto parts makers, restricting foreign investment, restricting vehicle imports, putting protective tariffs on imports, leveling high commodity taxes on large cars, establishing complex type-approval procedures, and by banning use of imported vehicles by government office. The cumulative effect of these restrictions resulted in a drop in foreign share of Japan's market, from 60% in 1953 to around 1% in 1960 and today it still stands at just about 6%.
If China took al these measures like Japan did/does, then believe me i think even the automobile industry in China will look very different today(being dominiated by European/U.S/Japanese companies). I have been both to china and Japan, and studied quite alot about both countries, and i can attest that surprisgly for me, Japan is even far more closed than China
But Japan shouldnt take the U.S good will towards it as meaning it can do whatever it wants while restricting U.S goods on its soil.

 

[xunzi]

i agree with Gambit, the plaza accord was kind of necessary, and it avoided a trade war/protectionism. You people should know that Japan is even now still a quite close economy/society compare to the west/U.S Japan still doesnt wants to agree for more free trade, and its imposes huge trade tariffs on imports of most U.S goods like automobiles/electronics etc. In fact even recently, United States farming groups are urging that, if Japan continues to insist that it should keep import duties on its ultra-sensitive agricultural products – rice, wheat, beef and pork, dairy products, and sugar and starch – it should be excluded from Trans-Pacific Partnership (TPP) negotiation, and japanese farmers/politicians have been insisting they wont buge on this issue and many others. What do you want the U.S to do, when it provides an equal footing for japanese goods in the U.S but Japan doesnt want to provide the same to the U.S. If anything i think the U.S hass been/is too lenient on Japan(mainly because the U.S still sees it as its main ally/unsinkable aircraft carrier in Asia.).
The Japanese Government has been protecting Japan's automakers through preferential allocation of foreign currency, providing technical assistance for auto parts makers, restricting foreign investment, restricting vehicle imports, putting protective tariffs on imports, leveling high commodity taxes on large cars, establishing complex type-approval procedures, and by banning use of imported vehicles by government office. The cumulative effect of these restrictions resulted in a drop in foreign share of Japan's market, from 60% in 1953 to around 1% in 1960 and today it still stands at just about 6%.
If China took al these measures like Japan did/does, then believe me i think even the automobile industry in China will look very different today(being dominiated by European/U.S/Japanese companies). I have been both to china and Japan, and studied quite alot about both countries, and i can attest that surprisgly for me, Japan is even far more closed than China
But Japan shouldnt take the U.S good will towards it as meaning it can do whatever it wants while restricting U.S goods on its soil.

You only reinforce the notion that Japan is a puppet, cannot defy the US, fear of abandonment, and so on...Basically Japan is not as strong and independent. This is why I kept saying that Japan relied on the goodwill of the US for its survival. Unlike us, we don't give a rat *** about the US pressure. We do whatever we like.

 

[mike2000]

You only reinforce the notion that Japan is a puppet, cannot defy the US, fear of abandonment, and so on...Basically Japan is not as strong and independent. This is why I kept saying that Japan relied on the goodwill of the US for its survival. Unlike us, we don't give a rat *** about the US pressure. We do whatever we like.

Well i wont deny Japan is a quasi colony/subodinate of the U.S everybody knows that. Japan is strong, but not independent. But yes you are kind of right, Japan kind of relies on U.S goodwill and tend to abuse it at times. I believe its one of the main reason the U.S is in a dilemna, because it has a much more deep/important economic relationship with china, and with each passing year it will only keep increasing, In a decade or 2 from now, the 2 countries will be so big/interconnected economically that it will be like they are the 2 countries running Asia/the world economy. This is/will be a dilemna for the U.S, since it has/will have a much more deep interest/market for its goods in China than Japan, since Japan is still quite closed to U.S goods. Travel there and you hardly see any western Goods dominating the country. Japanese consume Japan. So i think this is one reason im sure the U.S will never go to any such war(apart from the Obvious MAD) with China even for a country like Japan. The stakes for the U.S and its companies are just too high for it to risk that, whoch is unfortunate for countries like Japan, since with each passing year China and many other Asian countries will keep growing at a faster rate than Japan(India, South Korea, Indonesia Malaysia etc) which will greatly reduced Japans little influence it still has In Asia.
So overall, i dont envy Japan, not that i blame it, since its only trying to do what it thinks is best for her economically, but it also has its side effects. Afterall, you cant expect the U.S to sacrifice its corporations huge profits/market they have in China for Japans sake, which refuses to give same U.S goods access to its market. So i thinkt the coming decades in Asia will be interesting to watch to say the least.

 

[terranMarine]

I already said it many times before, Japan is entering its 3rd lost decades, the land of the rising sun is finished first ignited by the US and now contributed by the Asian tech giants. Not only because Japanese export hasn't recovered ever since, they are facing many strong competitions in the tech sectors coming from China, South Korea and TW. It's no surprise the once famous big Japanese brands such as Sharp and Panasonic have been facing tough times for a while and Sony has already abandoned the PC market this year. The purchase of Diaoyu islands have only hurt Japanese cars export to China. As a highly developed nation there's not much room for growth, the island has no natural resources, is plagued by earthquakes and tsunamis, extremely low birth rate plus the government seems to be spending a large chunk of the cash in building up its military defense.

Now looking at China, it is a super large market for foreign companies. Massive population, still a developing nation so the maximum potential won't be reached for a long time. With 4 trillion reserves , we can invest in whatever we like. Japan, Pinoys and VN can never beat us in an arms race. It's even a joke if they believe they can challenge us in a fight in the first place.

 

[ChineseTiger1986]

The Plaza Accord was the death knell for the Japanese growth story.

Japan back then (and even today) was dependent on exports in a way China never was, China's growth story is almost entirely driven by domestic investment.

There is NO way Japan would have "voluntarily" accepted the Plaza Accord, and destroyed the foundation for their economic growth of their own free will.

America forced it on them, they had no choice to refuse it, they destroyed their own economy on America's orders, just to help revive America's long-suffering domestic industries.

They can't do the same to China, but that doesn't stop them whining about the value of the Yuan every other day. They are hoping that we will do a "Plaza Accord" to ourselves.

That will never happen. China's economic reforms will be slow and steady, for the benefit of our own economy.

Poor Nippon, still suffering from the bubble burst created by the Plaza Accord.

 

[mike2000]

When we go to war against Japan we will nuke them and after their unconditional surrender we occupy them brutally and sign a new peace treaty. This peace treaty will be far more memorable.

Huh....are you dreaming or being sarcastic?

 

[UKBengali]

When we go to war against Japan we will nuke them and after their unconditional surrender we occupy them brutally and sign a new peace treaty. This peace treaty will be far more memorable.

No, China is much better than this.

Please don't try to make China look like a monster.

 

[Chinese-Dragon]

No, China is much better than this.

Please don't try to make China look like a monster.

Isn't that the entire point of him setting up that user account?

To defame China by trying to make us look like lunatics?

Nobody in their right mind talks about using nukes in every single post.