Gonzaga Debate Institute 2010 Bravo Lab China da

Hu Reform: Good for Econ

Chinese currency reform is good for both sort term financial stability and long term growth in China

Oliver 10. (Chris, MarketWatch's Asia bureau chief, based in Hong Kong. “China's president stresses willingness to reform currency.” MarketWatch. May 24, 2010. http://www.marketwatch.com/story/hu-stresses-chinas-willingness-to-reform-yuan-2010-05-23). LRH.
"Allowing the exchange rate to reflect market forces is important, not just to give China the flexibility necessary to sustain economic growth with low inflation, but also to reinforce incentives for China's private sector to shift resources to more productive, higher-value-added activities that will be important to future growth," Geithner said. Hu's comments basically reiterated statements Chinese officials had made on earlier occasions, though he appeared to go out of his way to highlight U.S. concerns about China's currency. Hu also said he hoped the dialogue would "build a foundation of mutual trust" between the two sides. Zhang Xiaoqiang, vice chairman on the National Development and Reform Commission, was cited in newswire reports as saying later Monday there had been no change in the basic principles of China's exchange-rate reform. Other Chinese officials echoed those sentiments, telling reporters that Monday's talks had focused on the global economy and didn't touch on issue of the yuan's exchange rate. Meanwhile, Geithner also urged freer trade between the two countries, part of an expected push to improve the U.S. trade account with the Chinese. "China has benefited enormously from the open and rules-based global system of trade and investment, as have we," he said. "Continued, reliable access to the large and growing United States market is an important underpinning of China's prosperity and growth." See story on U.S. side's hope to improve trade with China.
Gradual reform of Chinese currency will help maintain financial stability in China

The People’s Bank of China 10. (“Further Reform the RMB Exchange Rate Regime and Enhance the RMB Exchange Rate Flexibility.” The People’s Bank of China. June 19, 2010. http://www.pbc.gov.cn/english/detail.asp?col=6400&id=1488). LRH.
China´s external trade is steadily becoming more balanced. The ratio of current account surplus to GDP, after a notable reduction in 2009, has been declining since the beginning of 2010. With the BOP account moving closer to equilibrium, the basis for large-scale appreciation of the RMB exchange rate does not exist. The People´s Bank of China will further enable market to play a fundamental role in resource allocation, promote a more balanced BOP account, maintain the RMB exchange rate basically stable at an adaptive and equilibrium level, and achieve the macroeconomic and financial stability in China.

Hu Agenda Good - Collapse

There is no risk of collapse now, but continued central government reforms are necessary to keep it that way.

Freeman 10 (Will, analyst at GaveKal Dragonomics, “The accuracy of China’s ‘mas incidents’ ” Financial Times (London), March 2, http://www.ft.com/cms/s/0/9ee6fa64-25b5-11df-9bd3-00144feab49a,dwp_uuid=9511df10-6d6b-11da-a4df-0000779e2340.html?nclick_check=1) MKB

The central government is adapting to the challenge, to some extent. Beijing used to deny the existence of social unrest or blame it on foreign conspirators, but now accepts that social frictions stem from domestic problems will inevitably intensify. But since most complaints are against local officials or businesses, the central government argues that the chief problem is petty corruption stemming from bad eggs at the local level rather than systemic flaws that would undermine the legitimacy of the regime. Indeed, the sharp rise in petitions to Beijing about local abuses testifies to a widespread belief that the central government is more a potential solution to the problem, not its ultimate source. But this belief may be changing. Anecdotal evidence over the last five years suggests a rise in “anger-venting” mass incidents – large scale, often violent, riots that erupt from seemingly minor incidents and reflect general discontent rather than specific rights violations. In June 2008, over 10,000 rioters set fire to a police station in Guizhou province when police allegedly covered up a murder perpetrated by relatives of local government officials – the latest in a string of alleged misdemeanors. The party-state is in no danger of crumbling. But if the central government is serious about reducing growing social unrest, it must do three things: increase the accountability of local officials; break those officials’ grip on the courts; and improve the systems of public redress.

Rich/ Poor Gap = Instability

Income inequality in China is at a dangerous level, there is risk of massive social unrest

Qiang 10 (Guo, Journalist, “Income Gap Rings Alarm” Global Times, http://china.globaltimes.cn/society/2010-05/535803.html) MKB

Cong Yaping and Li Changjiu, economic analysts with Xinhua's Center of World Studies, warned that China's Gini Coefficient - an indicator of income inequality - has exceeded 0.5, threatening poor economic security, a weaker development outlook and social instability, the Xinhua-owned Economic Information Daily newspaper reported last week. The warning threshold, as commonly recognized by the international community, of the Gini Coefficient is 0.4. A World Bank report said the index for China surged to 0.47 last year. Income inequality in the country was also highlighted by a widening income ratio between urban and rural residents, which is at 3.33:1 this year, compared with 2:56:1 in 1997, according to the latest figures from the National Bureau of Statistics. Yang Yiyong, director of the Social Development Research Department at the NDRC, warned that China can't afford any further rises in the Gini Index, as growing disparity could result in social unrest and "could even cause distrust in the country's public-ownership economic system." "Social problems, including migrant workers consecutively taking their lives and serial attacks on schoolchildren, are related to conflicts stemming from the income gap," Yang said. Yang's words referred to seven unrelated attacks on primary school and kindergarten students in less than two months, in which more than a dozen children were killed. Also this week, the number of apparent suicides at Taiwanese company Foxconn hit 10. The rural-urban income gap constituted a major part in the overall gap, Yang said, urging the free mobilization of labor and the implementation of equal pay for equal work, both of which are hindered by the current household registration system, or hukou. People's Daily reported that the existing hukou system has helped push up the gap between the rich and poor. Citizens with rural hukou cannot generally enjoy the same social benefits as urban residents, even though they live and work in cities. The increasing gap between the rich and the poor has also raised concerns that China will follow some Latin American countries, such as Brazil, where the Gini index once reached 0.69.