Passage 2But now the dollar has fallen, and the very reverse has happened: commodity prices have con­tinued to tumble from the peak they reached in the second quarter of 1984. When calculated in a more representative basket of currencies , such as the Special Drawing Right , the fall looks even more precipitous. In May of this year, for example, the IMF’s food price index was a further 10 per cent below its level in the second quarter of 1985. There are signs that the worst of the fall may now be over；indeed, one key commodity, sugar, has rebounded impressively from the lows of last year, though even the sugar price remains below the most efficient grower's cost of production, and its rally appears to have run out of steam. For the rest, no body is bold enough to forecast a major improve­ment either this year or next. The IMF, for its part, believes that the prices of most commodities will fall substantially in 1986—with only sugar, tropical timber and hides among the softs likely to rise significantly.Why is S.D.R. adopted, generally speaking?

Passage 2But now the dollar has fallen, and the very reverse has happened: commodity prices have con­tinued to tumble from the peak they reached in the second quarter of 1984. When calculated in a more representative basket of currencies , such as the Special Drawing Right , the fall looks even more precipitous. In May of this year, for example, the IMF’s food price index was a further 10 per cent below its level in the second quarter of 1985. There are signs that the worst of the fall may now be over；indeed, one key commodity, sugar, has rebounded impressively from the lows of last year, though even the sugar price remains below the most efficient grower's cost of production, and its rally appears to have run out of steam. For the rest, no body is bold enough to forecast a major improve­ment either this year or next. The IMF, for its part, believes that the prices of most commodities will fall substantially in 1986—with only sugar, tropical timber and hides among the softs likely to rise significantly.What does“rebound” mean in the text?

Passage 2But now the dollar has fallen, and the very reverse has happened: commodity prices have con­tinued to tumble from the peak they reached in the second quarter of 1984. When calculated in a more representative basket of currencies , such as the Special Drawing Right , the fall looks even more precipitous. In May of this year, for example, the IMF’s food price index was a further 10 per cent below its level in the second quarter of 1985. There are signs that the worst of the fall may now be over；indeed, one key commodity, sugar, has rebounded impressively from the lows of last year, though even the sugar price remains below the most efficient grower's cost of production, and its rally appears to have run out of steam. For the rest, no body is bold enough to forecast a major improve­ment either this year or next. The IMF, for its part, believes that the prices of most commodities will fall substantially in 1986—with only sugar, tropical timber and hides among the softs likely to rise significantly.Which commodity prices will not fall in 1986?

More than one-third of China's exports come from foreign—mainly Asian—owned facto­ries. The big beneficiaries are Hong Kong and Taiwan. By integrating Chinese factories into produc­tion strategies, their companies can compete globally. Factory wages on the mainland—less than $ 1000 a year—are one 10th those in Taiwan. Companies from Hong Kong, a trading port of six mil­lion people, now employ more than three million workers in China. For Japanese businesses grap­pling with the strong yen, China is especially attractive. Japan's domestic market is sagging, and yen-based costs are pricing its exports too high. China offers a thriving market and a cheap produc­tion base. Nearly one of every 10 yen that Japanese companies invest this year will end up in China, by one estimate.

Economists reckon that the euro will slide to less than parity with the dollar within a year.

Japan has set targets to cut taxes, rein in powerful trade unions and reduce public spending.

Because RMB is not fully convertible, it cannot be attacked by foreign speculators.

With its growing economic and military clout, China is playing an important role in the world.

Energy shortage and antiquated infrastructure make it difficult to attract foreign investment.

Even countries with strong foreign exchange positions try to use countertrade as leverage to tap the networks of global firms.