China 's Currency Manipulation And World Trade

Chapter 11: Global negotiations leave groups more fortunate. A government that is purposefully maintaining inflated currency is robbing buyers of imports and creators of exports. A deflated value has an opposing effect, making imports cheaper and exports less challenging. One piece of currency across the west reduces negotiations and encourages price transparency. However, the United States as an individual country are

The major exportation of silver and only silver led to an imbalance of trade between these countries. Not only did a crash in China’s paper money play a role in the patterns of global silver trade, but the major exportation of silver led to hyperinflation within the countries

Currency intervention is the action of one or more governments, central banks, or speculators that increases or reduces the value of a particular currency against another currency – this is according to Wikipedia.

The combination of increasing unemployment rate and food price created severe poverty across the nation (Goldfinger par. 1-3). The currencies in China, too, went through a lot of changes to accommodate the increasing trade. At first, the silver Spanish dollars became rare and increased in value so much that it was outlawed as a usable currency. However, at the same time, the Chinese copper currency were also being used less due to the fact that the metal was becoming rare and the administration of the currency was extremely poor. The Mexican dollar was introduced but the problem was not solved until paper money were used in 1853 (Goldfinger par. 2). To make the economy worse, during the First Opium War, China had to pay six million silver dollars to ransom Canton, and an additional nine million dollars were paid to foreigner traders for their loss. Later, twelve million taels of silver were paid to Britain and France under the treaties negotiated after the Second Opium War. All of those factors weakened the Chinese economy in the 1800s (Allingham par.5-9). However, the Opium Wars’ impact is everlasting, for “the Chinese have embarked on a long and arduous struggle to expunge the humiliations which they suffered during and since the Opium War…Foreign industrialists may continue to dream of the supposedly unlimited China market, but the Chinese…are determined to keep the 'open door' sufficiently ajar to import vital technologies, while keeping all unwanted

The world trading system would clearly be affected by such a development. Currently China enjoys a somewhat privileged status within the World Trade Organization as a ―developing country. Such a rise to eminence, however, would clearly force it to become a full and equal member, with all the rights and responsibilities. China would also be in a position to actively affect the terms of trade between many countries. On the monetary front, one would expect that China would have to have

1. What are the implications of China’s exchange rate policy on doing business with and “against” China?

China, the largest growing market in the world, currently has a policy regarding monetary regulation that allows the Yuan to “float”. This has seen the Yuan appreciate by approximately 24% over the past few years. Today, the exchange rate between the Chinese Yuan and the American Dollar is approximately 6.3 Yuan to 1 Dollar. Some argue that China should revalue the Yuan again the dollar, establishing a more fixed exchange rate. Others believe that current should allow

Finally given the slowing economy in Asia the International Monetary Fund (IMF) has reclassified the yuan. Previously the IMF considered it to be “substantially undervalued” compared to other currencies. The IMF has softened its tone toward the Chinese yuan and it is now considered “moderately undervalued”. This new designation makes it harder for the United States government to make a case against and therefore policies to target the imports based on the Chinese yuan. (Davis, 2012)

Over the last 30 years, China has been one of the leading emerging economies in the world. In this time China has experienced a growth in capital inflows into the country which has led to having to make choices between exchange rate stability and monetary independence. The Chinese yuan is the official currency of the Peoples Republic of China. It is an emerging currency that some think will vie for an alternative to the US dollar or the Euro as a leading currency in the international foreign exchange markets. The United States is the leading economy in the world and has been for decades. The US dollar is the most used currency in the world. Several countries besides the United States use it as their official or de facto currency.

We could not blame a country too much for the aim of keeping a relative stable exchange rate, but it is in some way contrary to the original intention of the floating exchange rate, so we need to find out the real motivation of China’s dirty float. As previously cited, exchange rate policy has important effect on international relationship. The most likely reason why China adopted a dirty float regardless of foreign pressure is domestic politics.

Secondly, the fixed dollar-pegged exchange rate system and monetary policy, the independence of the existence of a fundamental conflict, undermine the effectiveness of monetary policy cannot meet the needs of economic development. Monetary policy autonomy is essential for China’s macroeconomic stability; monetary policy should take precedence over the independence of significant exchange rate stability. But the Yuan against the U.S. dollar exchange

In the recent decades, China has achieved remarkable economic development. Therefore, more and more attention has paid to the internationalization of Chinese currency (RMB). Benjamin J. Cohen suggests that, with huge and well connected economic base, the opportunity for RMB’ internationalization is obvious, but China 's underdeveloped financial system and financial markets, cumbersome capital control, make RMB internationalization face difficulties (Cohen, 2008). This paper departure from international currency, and then further discusses about the meaning and current situation of RMB internationalization, and the costs and benefits of RMB internalization, and then related to the current Chinese economic circumstances, give some opinion about the process.

Several rules prohibit nations from deceitfully enhancing exports and reducing imports through exchange rate manipulation. Traditional hesitancy to pursue currency manipulations exists among policymakers even today. Some policymakers commiserate with purposes of currency manipulation, especially as protection against economic shockwaves and for providing income for upcoming generations when nonrenewable resources are exhausted. Although the unemployment figures have perceivably plunged in recent times, the economic downturn of 2008 has left a trail of economic and social displacement. The United States has already lost millions of jobs due to currency interventions by other countries. Will the ascension of a handful of greedy and fraudulent Wall Street traders coupled with China 's hunger to be the world 's most powerful economy, descend the global economy into a bottomless pit in

In recent years, China’s balance of payments always keeps “double favorable balance”. In 2005, China’s national economy developed quickly and stably. The exchange rat of RMB became more flexible. The current account surplus increased obviously and the capital account surplus decreased. The foreign exchange reserve still increased quickly. In 2005, Chinese government did some fiscal policy and monetary policy. Such as decreased government expense, raise the tax rate, used managed floating system, improve the foreign exchange management, enlarged the foreign exchange market. We can conclude that china’s BOP will still keep “double favorable balance” and keep

Our Currency, Your Problem is a case involving the issue of exchange rate regimes and the impact currency manipulation has on economies and trade. The United States and Europe argued that the Renminbi (RMB) was undervalued and claimed that the People’s Bank of China (PBoC) deliberately manipulated the exchange rate to lower the prices of exports, which caused the US and Europe to run huge trade deficits with China.