Commentary Magazine


Topic: co-founder

Buying China

Legendary investor (and co-founder, with George Soros, of the Quantum Fund) Jim Rogers, speaking at an ABN Amro conference in Amsterdam on Tuesday, said that he hopes to sell all his assets denominated in U.S. dollars. What’s the investment legend buying? “I don’t see how one can really lose on the renminbi in the next decade or so,” he said, referring to China’s currency. “It’s gotta go. It’s gotta triple. It’s gotta quadruple.”

If it’s gotta do anything, Jim, it’s gotta collapse. Although it’s hard to argue with the guru who in 1999 correctly predicted the bull run in commodities, Rogers absolutely has to learn more about China.

It is true, as Rogers says, that the Bush administration has been trying to devalue the American currency. Treasury Secretary Henry Paulson may talk about his strong-dollar policy, but he is not doing much to maintain the value of the greenback. On the contrary, he is trying to weaken it. And he is succeeding. The dollar is trading at historic lows against the euro and other currencies, including the Chinese one. Yesterday, for instance, the yuan, as the Chinese currency is informally known, broke the CNY7.5=US$1 mark—after blasting through 7.6 on July 3. The renminbi has appreciated about 8 percent against the dollar since July 21, 2005, when China unpegged its currency from America’s.

The yuan would go up about 35 percent—give or take twenty percentage points—if Beijing allowed its currency to trade freely. But these predictions of appreciation all assume that China will be able to maintain its elaborate capital controls. If they come down, so will the renminbi. Chinese businesses and citizens, if given the chance, will put some of their money abroad. When they do so, demand for the renminbi will shrink as they exchange local currency for foreign ones. China’s economy certainly looks strong with its 11.5 percent GDP growth, but its apparent success is built on government-created distortions that cannot be maintained for long. The Chinese know this.

All developing economies endure crisis at one time or another. Argentina’s, which started in the beginning of this decade, might be the template for China’s. When Beijing faces market turbulence of its own, all that Jim Rogers knows will become obsolete within minutes. If we have learned one thing from panics in the last hundred years, it’s that they follow the rapid creation of wealth. Chinese leaders have created a massive bubble in their country, and, despite repeated advice from others, have not really tried to stop the boom. China does not have a market economy; therefore, few mechanisms are in place to make necessary adjustments that minimize imbalances as they arise. When crisis comes, it will come big.

Crisis in China? It’s gotta happen, Jim, and when it does, you’re gonna lose a lot of money.

Legendary investor (and co-founder, with George Soros, of the Quantum Fund) Jim Rogers, speaking at an ABN Amro conference in Amsterdam on Tuesday, said that he hopes to sell all his assets denominated in U.S. dollars. What’s the investment legend buying? “I don’t see how one can really lose on the renminbi in the next decade or so,” he said, referring to China’s currency. “It’s gotta go. It’s gotta triple. It’s gotta quadruple.”

If it’s gotta do anything, Jim, it’s gotta collapse. Although it’s hard to argue with the guru who in 1999 correctly predicted the bull run in commodities, Rogers absolutely has to learn more about China.

It is true, as Rogers says, that the Bush administration has been trying to devalue the American currency. Treasury Secretary Henry Paulson may talk about his strong-dollar policy, but he is not doing much to maintain the value of the greenback. On the contrary, he is trying to weaken it. And he is succeeding. The dollar is trading at historic lows against the euro and other currencies, including the Chinese one. Yesterday, for instance, the yuan, as the Chinese currency is informally known, broke the CNY7.5=US$1 mark—after blasting through 7.6 on July 3. The renminbi has appreciated about 8 percent against the dollar since July 21, 2005, when China unpegged its currency from America’s.

The yuan would go up about 35 percent—give or take twenty percentage points—if Beijing allowed its currency to trade freely. But these predictions of appreciation all assume that China will be able to maintain its elaborate capital controls. If they come down, so will the renminbi. Chinese businesses and citizens, if given the chance, will put some of their money abroad. When they do so, demand for the renminbi will shrink as they exchange local currency for foreign ones. China’s economy certainly looks strong with its 11.5 percent GDP growth, but its apparent success is built on government-created distortions that cannot be maintained for long. The Chinese know this.

All developing economies endure crisis at one time or another. Argentina’s, which started in the beginning of this decade, might be the template for China’s. When Beijing faces market turbulence of its own, all that Jim Rogers knows will become obsolete within minutes. If we have learned one thing from panics in the last hundred years, it’s that they follow the rapid creation of wealth. Chinese leaders have created a massive bubble in their country, and, despite repeated advice from others, have not really tried to stop the boom. China does not have a market economy; therefore, few mechanisms are in place to make necessary adjustments that minimize imbalances as they arise. When crisis comes, it will come big.

Crisis in China? It’s gotta happen, Jim, and when it does, you’re gonna lose a lot of money.

Read Less

Who is James Abourezk?

James Abourezk is a co-founder of the American-Arab Anti-Discrimination Committee and a former United States Senator: he represented South Dakota for one term, from 1973 until 1979. Last month, Abourezk was interviewed on al-Manar, the Hizballah television station. Sitting in a lushly-appointed Damascus plaza, he gushed to his interviewer that he watches al-Manar regularly in the United States, claims that “the Arabs who were involved in 9/11 cooperated with the Zionists,” and says that Hizballah’s war against Israel last year was “a marvel of organization, of courage and bravery.”

Read More

James Abourezk is a co-founder of the American-Arab Anti-Discrimination Committee and a former United States Senator: he represented South Dakota for one term, from 1973 until 1979. Last month, Abourezk was interviewed on al-Manar, the Hizballah television station. Sitting in a lushly-appointed Damascus plaza, he gushed to his interviewer that he watches al-Manar regularly in the United States, claims that “the Arabs who were involved in 9/11 cooperated with the Zionists,” and says that Hizballah’s war against Israel last year was “a marvel of organization, of courage and bravery.”

But a moment even more telling occurred towards the end of the interview, in a discussion of the “Israeli lobby:”

Interviewer: So who is controlling who?

James Abourezk: The lobby is controlling the Congress.

Interviewer: But you said that the U.S. is not in need of Israel, but rather, Israel needs the U.S.

James Abourezk: Yes, that’s right. But how they . . .

Interviewer: It’s very paradoxical.

Indeed. If the United States “is not in need of Israel,” why is the world’s superpower wasting so much money and political capital on this tiny country? The fashionable answer, these days, is to point to precisely the mysterious lobby Abourezk and his interviewer are discussing. But the idea that a small group of Evangelical Zionists and moneyed, influential Jews could warp a nation’s policy completely against its own interests—as proponents of this theory argue—is absurd on its face.

Abourezk and his ilk frequently decry the power of this lobby. Here is one of the United States’ most prominent Arab lobbyists at work: shilling on a television station operated by an outfit deemed a terrorist organization by the United States government, accusing his own country of being run by a sinister cabal. What do Messrs. Walt and Mearsheimer have to say about this?

Read Less

Pasqualini, Out of Print

Almost a decade ago, in October 1997, the human rights activist Jean Pasqualini died in Paris at 71. Born in Beijing to a French Corsican father and Chinese mother, Jean worked as a translator for the U.S. military and the British Embassy in Beijing until he was arrested in 1957, charged with counterrevolutionary activity, and sentenced to the nefarious Laogai system of penal colonies, also known as China’s “Gulag.” In 1964, thanks to his French background, Jean was released by Mao after France recognized China, whereupon he was exiled to France; there, some years later, I had the pleasure of getting to know him.

Jean’s 1973 book Prisoner of Mao, about his seven years in the Laogai, is a pioneering classic, although, sadly, Penguin has allowed it to go out of print. The ever-timely Prisoner of Mao should be reprinted immediately, especially as even out-of-print copies available from Amazon.com and Barnes & Noble.com are challenging to find, detectable only by Jean’s Chinese name, Bao Ruo-Wang. An author search for “Jean Pasqualini” on both sites confusingly brings up the French edition of his book (which remains available from Gallimard).

Read More

Almost a decade ago, in October 1997, the human rights activist Jean Pasqualini died in Paris at 71. Born in Beijing to a French Corsican father and Chinese mother, Jean worked as a translator for the U.S. military and the British Embassy in Beijing until he was arrested in 1957, charged with counterrevolutionary activity, and sentenced to the nefarious Laogai system of penal colonies, also known as China’s “Gulag.” In 1964, thanks to his French background, Jean was released by Mao after France recognized China, whereupon he was exiled to France; there, some years later, I had the pleasure of getting to know him.

Jean’s 1973 book Prisoner of Mao, about his seven years in the Laogai, is a pioneering classic, although, sadly, Penguin has allowed it to go out of print. The ever-timely Prisoner of Mao should be reprinted immediately, especially as even out-of-print copies available from Amazon.com and Barnes & Noble.com are challenging to find, detectable only by Jean’s Chinese name, Bao Ruo-Wang. An author search for “Jean Pasqualini” on both sites confusingly brings up the French edition of his book (which remains available from Gallimard).

In a 1978 essay, the Belgian sinologist Pierre Ryckmans (born in 1935, who publishes under the name Simon Leys) called Prisoner of Mao the “most fundamental document on the Maoist ‘Gulag’ and, as such, the most studiously ignored by the lobby that maintains that there is no human-rights problem in the People’s Republic.” There, as Jean later revealed, brainwashed prisoners were forced to “reconstruct socialism with their two hands,” in order to “reform themselves.” Once safely in France, Jean remained an ardent supporter of human rights in China, despite a catastrophic series of ailments, including cancer and diabetes, caused by his imprisonment. In 1992 he co-founded the Laogai Research Foundation with the activist Harry Wu (Wu Hongda), author of the definitive Bitter Winds: A Memoir of My Years in China’s Gulag and the equally essential Troublemaker: One Man’s Crusade Against China’s Cruelty.

Jean radiated charm and humor, key tools for survival. His appetite for joy was reflected in his humorous anecdotes about how he worked for Columbia Pictures’ distribution branch in postwar China. Jean delighted in the most overblown Hollywood screen musicals, from The Jolson Story to Hello Dolly, as well as jokes about Columbia’s comic-villain studio boss Harry Cohn. At serious moments, Jean would confide that even after years away from the Laogai, Mao remained the most important person in ex-prisoners’ lives. As part of the “re-education” process, prisoners were driven to such mental anguish and self-recrimination for their “crimes against society” that one fellow prisoner—imprisoned for alleged sex crimes—was driven to self-mutilation as penance for his supposed offense. A brave, noble survivor whose humanity and sense of humor miraculously survived his ordeals, Jean Pasqualini deserves a better fate than to languish out of print.

Read Less




Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.