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Fox
Joined: 04 Mar 2009
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 Posted: Sat May 16, 2009 10:05 pm Post subject: Chinese Currency Policy |
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China and the United States (and Europe) have been going over this issue for a while now, with China complaining of protectionism and the West complaining of currency manipulation. Some snippets from the article:
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China slammed the United States and European Union for "unfair" and "protectionist" actions to counter its booming textile exports while dismissing claims it manipulated its currency to gain an unfair trade advantage.
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"We do have a surplus with the US. However we also have (trade deficits) with many of the European countries ... and also with the Southeast Asian region," Wei said at a forum in Singapore.
"So how do you manipulate your currency just to get a surplus with the US?"
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The US Treasury report stopped just short of saying China was a currency manipulator under a US legal definition, which could have opened the way to US sanctions, but warned it may earn that label if "current trends continue".
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The European Union cranked up the tensions Tuesday when its executive arm launched emergency measures that could lead to limits on T-shirts and flax yarn from China if Beijing does not take more action to rein in its exports.
On Wednesday, European Commission chief Jose Manuel Durao Barroso added to the pressure, saying the EU was "ready to go further" than the emergency measures.
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US critics claim that Chinese exports in general have enjoyed a massive boost from an artificially weak yuan, placing Beijing under mounting international pressure to revalue the currency.
The US Senate is due to vote in July on a bipartisan bill that would slap a 27.5 percent tariff on all imports from China if Beijing does not scrap the yuan-dollar peg within six months.
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Opinions on which side (if either, or both) has genuine and just basis for complaint? |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sat May 16, 2009 10:28 pm Post subject: |
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This article is from 2005.
The Yuan now floats within a band and is not pegged to the dollar.
America won and now doesn't have a trade deficit with China anymore (ha ha!). |
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Fox
Joined: 04 Mar 2009
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| Posted: Sat May 16, 2009 10:54 pm Post subject: |
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The particular article is from 2005 (as I said, it's been going on a while), but I was under the impression it hadn't really been put to rest. What gave me that impression was that it's still being talked about, although perhaps not as strongly:
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| The conclusion clashes with Geithner's January 22 statement to a Senate panel that ``President Obama - backed by the conclusions of a broad range of economists - believes that China is manipulating its currency.'' Today's shift may anger some US lawmakers and trade unions who have sought measures to punish the Chinese and other trading partners perceived to have undervalued exchange rates. |
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| China limited appreciation of the yuan against the dollar in July 2008 after the currency rose 21% against the dollar following the end of a fixed exchange rate three years earlier. From July 1 to the end of the year, the yuan rose 0.4%. Its value has been little changed since the beginning of the year, closing today at 6.8325 to the dollar. |
Do you feel that cause for concern has vanished with the alteration in Chinese policy mentioned in the article you posted, even if they are keeping their currency down through other means? Do you feel it's not correct to say that despite unpegging they're still deliberately keeping it down? |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sat May 16, 2009 11:16 pm Post subject: |
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Some China hands argue a complete free-float of the yuan would make the Chinese market unstable.
Right now China has frozen its exchange rate as a response to bad economic climate. Meanwhile, the Fed invented $1.25 trillion of money. I feel the Fed's actions are exponentially worse than China's could ever be, and that freezing appreciation of the RMB is a tool it may use to intervene in extraordinary circumstances. |
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mises
Joined: 05 Nov 2007
Location: retired
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rollo
Joined: 10 May 2006
Location: China
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| Posted: Fri May 28, 2010 3:32 pm Post subject: |
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| China is going to allow the yuan to rise a little this summer to help cool of the economy. |
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Mr. Pink
Joined: 21 Oct 2003
Location: China
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| Posted: Fri May 28, 2010 6:41 pm Post subject: |
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As someone currently working in China, I wish it wasn't 6.82 RMB to the US $...that rate only changes marginally like 6.83 to 6.82...not a lot of wiggle room.
China owns 2.5 TRILLION dollars in foreign currency...that is amazing. They have to keep buying foreign currency to keep their RMB pegged at the rate they dictate.
Both the US and China are currency manipulators. The difference is China is doing it and at the same time increasing the value of their economy. The US is decreasing the value of their economy. This is probably why the US is complaining so much. They aren't getting the value added that the Chinese are in how they manipulate their currency.
In reality the RMB should be around 5 yuan to the US dollar...maybe even 4.xx...I doubt they will let it move below 6 RMB per US dollar though.
I can't wait until it does start to move. Even 6 RMB per US dollar is going to mean about 4-5 grand more money for me per year. |
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The Happy Warrior
Joined: 10 Feb 2010
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chellovek
Joined: 29 Feb 2008
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| Posted: Thu Oct 07, 2010 6:58 pm Post subject: |
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I think they will eventually work something out, or it will simply rumble along at low-frequency.
China aside, my personal currency policy is to get more of it. |
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Wai Mian
Joined: 03 Sep 2010
Location: WE DIDNT
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| Posted: Thu Oct 07, 2010 7:31 pm Post subject: |
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| The US has a long and storied history of allowing NE Asian economies to distort prices for some reason or another. Why stop now? |
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rollo
Joined: 10 May 2006
Location: China
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| Posted: Thu Oct 07, 2010 11:55 pm Post subject: |
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| We are in the opening battle of a trade war. Currency is a beginning. |
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