Korean Job Discussion Forums

[dogshed]

How does China control the Yuan?

Obviously people outside China can buy and sell
Yuans at whatever price they want.

[sojourner1]

I understand it used to be pegged to the US dollar up until like July 2005 and now it is pegged to a number of currencies, but America seeks to get it to float at market value now. China says it's too early to float their currency, but over time China will allow its currency's exchange rate to increasingly reflect market value.

[yushin]

more yank bullshit!!! jesus won't you guys ever grow up!

[sojourner1]

The Yanks are talked about because they have played a main role in todays global economy and policies surrounding it. It sounds like someone does not like Americans here which is fine since you are not forced to like them, just forced to be affected by their many policies that shaped the world as we know it today.

[bobbyhanlon]

its not a case of america being evil many countries willingly peg their currencies to the US dollar, and the US doesn't really have a choice in that matter. china pegs its currency at an artificially low value, which makes chinese products cheap in america, and thus helps chinese industry at the expense of american industry. it is totally reasonable of the usa to want china to float its currency.

as america will become less important over time, countries will switch their pegs to baskets of currencies, including dollars, euro, yen, pounds, etc. also with the dollar in the toilet, there is even more of an incentive to do this.

[lastat06513]

The rmb IS STILL pegged to the US$$, but the rate is slightly lower than before (I think it is about 7.2 or something to the US$$...)

Also, Americans have every right to be pissed.
Ever since China got favored-trade status with the US, the trade deficit with China has gone through the roof.....

Please correct me if I am wrong because I am not good with economics....

[ernie]

i'm interested in the OP's question as well, and i don't think anyone has really answered it yet: since people in the world market can freely exchange yuans for whatever price they want, how can China control the value of its money?

is it just that their government will always exchange x yuans per US dollar? what if someone thinks that this is a bad deal?

[bobbyhanlon]

yep, they just continuously exchange their own money for US dollars at that rate..
china alone has well over a trillion of those increasingly worthless dollars, and the *beep* will really hit the fan if they, russia, japan, korea, arab countries, etc., decide to switch.

[dogshed]

So if I buy some Yuan will it drop in value along with the dollar
as China sells their Yuan cheap to keep the Yuan low?

Are they "printing" more Yuan to sell or are they taking Yuan
out of circulation?

I guess you want to buy Yuan the day before it becomes unpegged.
What kind of clues should I look for? I would guess they will start
slowly charging more dollar for the Yuan.

[skindleshanks]

I'm also very tempted to buy the yuan, but wonder if it might be just as well to invest in Chinese stocks.

[adeline]

they undervalue their own currency, this promotes trade. sure you could buy it for more, but that is like paying $8 for a sandwitch when you can just walk around the corner and pay $2, who would do that?

[Wangja]

[Wangja]

[adeline]

[lastat06513]

Ok....
What they are truly doing is both undervaluing their currency AND undervaluing their teachers by paying them on average about 5,000rmb a month (mind you....this is for a bad teacher.....) for what their counterparts in Korea do (which is about 2.2 million won and this is for an average-below par teacher)......

My question is; where and when do thing balance out?