ACCESSION NUMBER:330318
FILE ID:ECO101
DATE:03/07/94
TITLE:ECONOMIC HIGHLIGHTS, MONDAY, MARCH 7 (03/07/94)
TEXT:*94030701.ECO ecohilites: TRADE:DISP, MONEY ODESSEY/js
ECONOMIC HIGHLIGHTS, MONDAY, MARCH 7
(China, Monetarists) (430)
CHRISTOPHER SEES NO CHANGE ON CHINA SATELLITE SANCTIONS
Washington -- Secretary of State Warren Christopher says the United States
might allow launch of another U.S. satellite by China but indicates such
approval would not reflect a change in U.S. policy.
Christopher made the remarks at a March 7 press conference in Canberra,
Australia. The secretary is scheduled to travel March 11 to Beijing, where
he has said he will press the government on human rights.
The United States prohibited export to China of certain U.S. commercial
satellites for launching there after China allegedly violated Missile
Technology Control Regime obligations by sharing missile technology with
Pakistan.
In January the United States allowed China to launch two U.S. satellites
that contained no critical advanced technology. Christopher said an export
license might be approved for a third satellite because the U.S.
manufacturer removed advanced encryption technology from it.
1
"I would hope, but without predicting, that there can be a positive
outcome," he said.
"I think it simply sends a signal of even-handed treatment that was not a
particular favor we were doing to China," Christopher said. "It was
something that was consistent with our law and served our commercial
purposes."
MONETARIST ECONOMISTS PREDICT FURTHER INTEREST RATE RISES
Washington -- A group of monetarist economists predicts that short-term
interest rates will have to rise further to prevent an acceleration in
inflation because of what the members perceive as excessively rapid money
supply growth in the past.
The group, the Shadow Open Market Committee, announced its views at a March
7 press conference. The committee meets twice a year to criticize the
Federal Reserve's policy-making group, the Federal Open Market Committee
(FOMC).
In February the Federal Reserve did push up short-term interest rates, the
first such action in five years.
The Shadow Committee members predicted inflation would start to accelerate
in 1994 or 1995 without further action by the Federal Reserve. They said
the Federal Reserve should target not interest rates but monetary
aggregates, specifically the monetary base, which comprises bank reserves
and currency.
Economist Erich Heinemann predicted the federal funds rate, regarded as one
key signal of Federal Reserve policy, would rise from just above 3 percent
now to nearly 6 percent in 1995. The federal funds rate is the interest
rate banks charge each other for short-term loans.
Federal Reserve Chairman Alan Greenspan has testified that the central bank
stopped using monetary aggregates as targets because the longstanding
relationship between them and U.S. economic performance had broken down.
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