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People's Daily Online>>Opinion

Euro depreciation affects Asian manufacturing

By Ji Peijuan, Yu Qing, Bai Yang (People's Daily)

08:18, December 22, 2011

Edited and translated by People's Daily Online

The market reaction to "bearish euro" is stirring resonance. The information of Asian foreign exchange market on Dec. 19 showed that the euro to U.S. dollar exchange rate still remained at a low level.

The ratings agency Moody's said on Dec. 16 that France was more likely exposed to a debt crisis than other euro zone countries with the highest rating, triggering another upswing of market risk aversion. Euro may continue to decline and exert a negative influence on Asia’s manufacturing.

Unfavorable Asian exports to Europe

Asia’s exports to Europe have faced an unfavorable situation since the beginning of this year. South Korea's exports to all of the 27 E.U. member states had declined 9 percent from January to September this year. Although China’s exports to these countries increased 6 percent in the same period, this growth was much lower than that of China’s overall exports.

Professor Xing Yuqing from the Research Institute under Asian Development Bank said that the continuous decline of euro to U.S. dollar exchange rate would have a great impact on Asia’s export-oriented economy.

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PD User at 2011-12-24219.78.6.*
In growing up in US/Canada, I was taught that the ever-improving technology is intended to allow workers to be more and more efficient so that the corporations can be more streamlined in terms of worker head-count. In other words, an employer is more likely to hire you as a worker if you can replace say 2 or more workers. We were, however, never taught how to create jobs when the economy is bad.
Canada at 2011-12-2270.36.49.*
The U.S. blames China"s currency for unemployment, but a big contributor may be overtime. If overtime statistics are available in the U.S., they should be examined. A reason unemployment in Canada, and probably in the U.S. can be high, is corporations lay off employees, & then use a lot of overtime, as at a certain point overtime is cheaper than paying payroll taxes and benefits to employees. It is popular with some employees, especially those with low incomes. Some have argued that to stop overtime it should be paid at half time [never done]. Perhaps the best way to stop it is to legislate that all hours in excess of 8 hours/day must be paid at double time, only 2 hours/day overtime can be worked, and employees must be given a 10 or 15 minute paid coffee break after completing their 8 hour shift and before starting the overtime. Some unions have a policy that members should not work overtime, but in many jurisdictions employers have the right to fire employees if they refuse overtime. I always refused to work overtime for the employer. As the saying goes - how can I have a job if you"re holding down two? The U.S. government won"t tackle overtime because of corporate pressure, but obviously the government"s ability to tackle it, reduce unemployment & create jobs, is within their power.

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