The Proposed Bill, Currency Exchange Rate Oversight Reform Act Of 2013

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The proposed bill, Currency Exchange Rate Oversight Reform Act of 2013, is the thoughtful way to center the Chinese currency manipulation as the cause of economic downturn. Even though it has been six years after the Great Recession, there are approximately 8 million people unemployed and unable to enter the labor market. (Economic Policy Institue 2013) Since the Great Depression which ended in mid 1940s, United States has never been through such an economic downward in both national and global level.(Global Economic Crisis 2013) Due to the congressional dysfunction, the prospect for neither fiscal nor monetary policies to combat the sluggish economy has disappeared. Realigning exchange rate as the tool of macroeconomic stabilization could…show more content…
(Yu 2013) Moreover, the bill is the violation of the rules of World Trade Organization. Nevertheless, it is undeniable that US must do something with the devalued yuan. The relationship between Washington and Bejjng has been about competition. Each days China becomes more and more influential and powerful. In this new world order, China builds and strengthening the networks to other countries and associations including the one which US is not the member such as BRICS (Brazil, Russia, India, China, and South Africa) and ASEAN plus three. China’s intervention in its foreign exchange markets gives China rapid growth. Yuan increasing becomes more important in as the means of exchange. For instance, in 2011 Japan and China, the second and third largest world economies, came up with plans to promote “the direct exchange of their currencies”. They want to “by pass the need to use dollar”. Moreover, this becomes the trend for the economies around the world to do “currency swap” agreements. They agreements would lead to the end of “Dollar Hegemony” and the start of “new international financial architecture”. (Yu 2013) United States should wait until China takes the action to devalue yuan by itself which will happen in the near future judging
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