US is trying to create new policy at their parliament. The unfair trade surplus and jobless rate prompt them urgently create new law. US citizens blamed their government for failing to create enough job domestic. The US government pointed China's undervalued yuan as a reason of their crisis. US constantly urged China to appreciate their currency to match their development. However Beijing was so cautious to follow US's concern and only marginally appreciate its currency. I'm not trained as economist and I really don't understand how does it related. Being layman, it's macro and hard to understand such worldwide issue.
China's export sector got competitive edge from the advantage of undervalued yuan because yuan depreciation make their products considerably cheap against their rival products from worldwide. On the same time, they make all imported things become expensive and effectively block the consumer spending power. By this way, they became upper hand in any bilateral trade world against any country. No other country able to compete the China product in term of manufacturing and market price if the quality of the products is same. At some point, China could sell the better quality product at low price due to their advanced mass production as well as low labour wages. No wonder, China overcome Germany and Japan to gain world's 2nd biggest economy in the world. Only US is sitting on the top spot and this place also now shaken by China's rapid progress in all area.
US feel it's totally unfair China government subsidy its currency stay at lowest possible to generate their products remain competitive. Being layman, I couldn't understand why China are so refused to appreciate their currency. I thought every government would happy to see their currency appreciate against world currencies. I was definitely wrong when I try to understand the trend a bit. Finally the circumstance forced US to come out with double standard policy which need to take more import tax to products from China and similar country if any. This news make China angry and China are quick to respond the unwanted news. Some economist guess it can lead to trade war between US and China if the parliament pass the draft law to reality. Last week Upper house already passed and only lower house vote is needed to pass the law now. At the same time, US secretary Hillary urged other countries to join US in the mission to force China take necessary measure to appreciate yuan. She was so confident that devalued yuan is not only American problems but other countries. It contributed all exporting countries become loser in the long run.
At the moment, Europe is struggling to cope their own problem in saving the euro. US is also facing their problem with the own version. The middle east is uprising and going to increase fuel price at the market which make things expensive. Then what China is doing while other are struggling? China is trying to take advantage from troublesome countries around the world. China is investing almost every country across 5 continents. Of course, my country is another core target by big boy since my country rich natural resources. In real life, we are still relying on Chinese cheap products since we are one of the poorest countries. China export their almost rejected things to our country and import the best natural resources from us. However, they still enjoying trade surplus from doing business with us. It seems we are exchanging our best with their worst. It's disgusting to understand the real things as we seem being semi-colonial by China. It's arguably truth that China has a big influence on our leaders.
Let me get back on the track of this post. US is urging China to appreciate yuan. What if China follow US's demand. For sure, China products will no longer cheap and our people will suffer from that change. Then, is it good for most countries if China remain depreciate? Probably yes for poorer countries like us. May be Europe and US won't like to see China currency remain unchanged. Anyway, we are more likely to bear the consequence of fighting between those two giants.
May the world able to find win-win situation to save our world's economy and prevent from potentially falling into new recession.
China's export sector got competitive edge from the advantage of undervalued yuan because yuan depreciation make their products considerably cheap against their rival products from worldwide. On the same time, they make all imported things become expensive and effectively block the consumer spending power. By this way, they became upper hand in any bilateral trade world against any country. No other country able to compete the China product in term of manufacturing and market price if the quality of the products is same. At some point, China could sell the better quality product at low price due to their advanced mass production as well as low labour wages. No wonder, China overcome Germany and Japan to gain world's 2nd biggest economy in the world. Only US is sitting on the top spot and this place also now shaken by China's rapid progress in all area.
US feel it's totally unfair China government subsidy its currency stay at lowest possible to generate their products remain competitive. Being layman, I couldn't understand why China are so refused to appreciate their currency. I thought every government would happy to see their currency appreciate against world currencies. I was definitely wrong when I try to understand the trend a bit. Finally the circumstance forced US to come out with double standard policy which need to take more import tax to products from China and similar country if any. This news make China angry and China are quick to respond the unwanted news. Some economist guess it can lead to trade war between US and China if the parliament pass the draft law to reality. Last week Upper house already passed and only lower house vote is needed to pass the law now. At the same time, US secretary Hillary urged other countries to join US in the mission to force China take necessary measure to appreciate yuan. She was so confident that devalued yuan is not only American problems but other countries. It contributed all exporting countries become loser in the long run.
At the moment, Europe is struggling to cope their own problem in saving the euro. US is also facing their problem with the own version. The middle east is uprising and going to increase fuel price at the market which make things expensive. Then what China is doing while other are struggling? China is trying to take advantage from troublesome countries around the world. China is investing almost every country across 5 continents. Of course, my country is another core target by big boy since my country rich natural resources. In real life, we are still relying on Chinese cheap products since we are one of the poorest countries. China export their almost rejected things to our country and import the best natural resources from us. However, they still enjoying trade surplus from doing business with us. It seems we are exchanging our best with their worst. It's disgusting to understand the real things as we seem being semi-colonial by China. It's arguably truth that China has a big influence on our leaders.
Let me get back on the track of this post. US is urging China to appreciate yuan. What if China follow US's demand. For sure, China products will no longer cheap and our people will suffer from that change. Then, is it good for most countries if China remain depreciate? Probably yes for poorer countries like us. May be Europe and US won't like to see China currency remain unchanged. Anyway, we are more likely to bear the consequence of fighting between those two giants.
May the world able to find win-win situation to save our world's economy and prevent from potentially falling into new recession.
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