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Here's a brief interview that covers stock trading for beginners. STUART:I'm joined in Dalian, China by one of my mentors, Daryl Guppy. I know you do a lot of work in China, so it's great to see you here in this amazing city, and I think every city in China is becoming amazing because they're growing so much. I just wanted to ask a few questions. I guess because we're in China and you do a lot of work here, and we're all worried about this global financial crisis and the recession talk and everything, how's China handling all this? It seems to be doing okay overall. DARYL:China's doing okay compared to other places. But a pullback of even just a few percent in terms of GDP is as significant as a pullback of a few percent in Australia. So Australia's talking a GDP of what? 2? 2-1/2 percent? Whereas, China's pulled back from 11 percent to 9 percent. That's a 2 percent drop. It doesn't seem much because 9 percent sounds much, much better than 2-1/2 percent. STUART:Sure does. Yes, yes. DARYL:But it still has a significant impact on the Chinese economy. So the key factor in the Chinese economy is it strengthens domestic demand. That's what's really driving this economy, and that's the major political factor that the government has to consider. It has to keep domestic demand strong and keep the drivers strong, and it will turn away from overseas work to concentrate on what's happening domestically because overall exports for China represent about 2 percent of GDP, 1-1/2 to 2 percent. So it's not that significant, but for us of course, exports from China are a significant part of our economy. STUART: Could China actually emerge out of all this as the leading economy in the world. I mean, people want to put their money here, don't they? DARYL:Certainly that's the case, and there are currently discussions at the moment to establish the yuan as a reserve currency, and now we had three reserve currencies: the U.S. dollar, the euro, and Japanese yen. Now to recapitalize world financial markets, we really have to draw on Chinese yuan reserves. So the current discussion that's taking place is at a ministerial level in China. First of all, they want a seat at the table in the discussion of how to resolve this world financial crisis. All of this turmoil does not make it easy for stock trading for beginners. Part of the price of their admission is the potential for the yuan to act as a reserve currency. And certainly the West needs to be able to draw on other resources or other sources of funding to be able to restore liquidity to capital markets.
STUART:I actually heard an opinion today. I'm not sure if it's right or not. And you know the U.S. dollar has appreciated against so many currencies so well over the last two or three months. He put that down to people saying the U.S. dollar is a bit of a safe haven because if you don't want your money in anything else, buy U.S. dollars. It's stable. It's secure. So many people have been pouring their money into the U.S. dollar as a safe haven, which potentially it may not be a safe haven, but people see it as that. Is that fair, do you think? DARYL:With respect to that analysis, yes, perhaps not 100 percent in the sense that there has been a tremendous flow of money out of what we call emerging or developing markets, U.S. money back to the U.S. It's a flight of fear, not a flight of quality. This is part of what's driving the U.S. dollar up at the moment, and counterpoint the dramatic declines in AUD, in euro, and Japanese yen, etc. I mean, you have 16 percent moves overnight. These are not things that are normal in currency markets. It is not an easy time for stock trading for beginners.
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