iHaveNet.com
World - Do not Expect China to Budge on the Yuan | China
  • HOME
  • WORLD
    • Africa
    • Asia Pacific
    • Balkans
    • Caucasas
    • Central Asia
    • Eastern Europe
    • Europe
    • Indian Subcontinent
    • Latin America
    • Middle East
    • North Africa
    • Scandinavia
    • Southeast Asia
    • United Kingdom
    • United States
    • Argentina
    • Australia
    • Austria
    • Benelux
    • Brazil
    • Canada
    • China
    • France
    • Germany
    • Greece
    • Hungary
    • India
    • Indonesia
    • Ireland
    • Israel
    • Italy
    • Japan
    • Korea
    • Mexico
    • New Zealand
    • Pakistan
    • Philippines
    • Poland
    • Russia
    • South Africa
    • Spain
    • Taiwan
    • Turkey
    • United States
  • USA
    • ECONOMICS
    • EDUCATION
    • ENVIRONMENT
    • FOREIGN POLICY
    • POLITICS
    • OPINION
    • TRADE
    • Atlanta
    • Baltimore
    • Bay Area
    • Boston
    • Chicago
    • Cleveland
    • DC Area
    • Dallas
    • Denver
    • Detroit
    • Houston
    • Los Angeles
    • Miami
    • New York
    • Philadelphia
    • Phoenix
    • Pittsburgh
    • Portland
    • San Diego
    • Seattle
    • Silicon Valley
    • Saint Louis
    • Tampa
    • Twin Cities
  • BUSINESS
    • FEATURES
    • eBUSINESS
    • HUMAN RESOURCES
    • MANAGEMENT
    • MARKETING
    • ENTREPRENEUR
    • SMALL BUSINESS
    • STOCK MARKETS
    • Agriculture
    • Airline
    • Auto
    • Beverage
    • Biotech
    • Book
    • Broadcast
    • Cable
    • Chemical
    • Clothing
    • Construction
    • Defense
    • Durable
    • Engineering
    • Electronics
    • Firearms
    • Food
    • Gaming
    • Healthcare
    • Hospitality
    • Leisure
    • Logistics
    • Metals
    • Mining
    • Movie
    • Music
    • Newspaper
    • Nondurable
    • Oil & Gas
    • Packaging
    • Pharmaceutic
    • Plastics
    • Real Estate
    • Retail
    • Shipping
    • Sports
    • Steelmaking
    • Textiles
    • Tobacco
    • Transportation
    • Travel
    • Utilities
  • WEALTH
    • CAREERS
    • INVESTING
    • PERSONAL FINANCE
    • REAL ESTATE
    • MARKETS
    • BUSINESS
  • STOCKS
    • ECONOMY
    • EMERGING MARKETS
    • STOCKS
    • FED WATCH
    • TECH STOCKS
    • BIOTECHS
    • COMMODITIES
    • MUTUAL FUNDS / ETFs
    • MERGERS / ACQUISITIONS
    • IPOs
    • 3M (MMM)
    • AT&T (T)
    • AIG (AIG)
    • Alcoa (AA)
    • Altria (MO)
    • American Express (AXP)
    • Apple (AAPL)
    • Bank of America (BAC)
    • Boeing (BA)
    • Caterpillar (CAT)
    • Chevron (CVX)
    • Cisco (CSCO)
    • Citigroup (C)
    • Coca Cola (KO)
    • Dell (DELL)
    • DuPont (DD)
    • Eastman Kodak (EK)
    • ExxonMobil (XOM)
    • FedEx (FDX)
    • General Electric (GE)
    • General Motors (GM)
    • Google (GOOG)
    • Hewlett-Packard (HPQ)
    • Home Depot (HD)
    • Honeywell (HON)
    • IBM (IBM)
    • Intel (INTC)
    • Int'l Paper (IP)
    • JP Morgan Chase (JPM)
    • J & J (JNJ)
    • McDonalds (MCD)
    • Merck (MRK)
    • Microsoft (MSFT)
    • P & G (PG)
    • United Tech (UTX)
    • Wal-Mart (WMT)
    • Walt Disney (DIS)
  • TECH
    • ADVANCED
    • FEATURES
    • INTERNET
    • INTERNET FEATURES
    • CYBERCULTURE
    • eCOMMERCE
    • mp3
    • SECURITY
    • GAMES
    • HANDHELD
    • SOFTWARE
    • PERSONAL
    • WIRELESS
  • HEALTH
    • AGING
    • ALTERNATIVE
    • AILMENTS
    • DRUGS
    • FITNESS
    • GENETICS
    • CHILDREN'S
    • MEN'S
    • WOMEN'S
  • LIFESTYLE
    • AUTOS
    • HOBBIES
    • EDUCATION
    • FAMILY
    • FASHION
    • FOOD
    • HOME DECOR
    • RELATIONSHIPS
    • PARENTING
    • PETS
    • TRAVEL
    • WOMEN
  • ENTERTAINMENT
    • BOOKS
    • TELEVISION
    • MUSIC
    • THE ARTS
    • MOVIES
    • CULTURE
  • SPORTS
    • BASEBALL
    • BASKETBALL
    • COLLEGES
    • FOOTBALL
    • GOLF
    • HOCKEY
    • OLYMPICS
    • SOCCER
    • TENNIS
  • Subscribe to RSS Feeds EMAIL ALERT Subscriptions from iHaveNet.com RSS
    • RSS | Politics
    • RSS | Recipes
    • RSS | NFL Football
    • RSS | Movie Reviews
Do not Expect China to Budge on the Yuan
Joel Brinkley

HOME > WORLD

 

SocialTwist Tell-a-Friend

Unemployment in the United States stands at 9.6 percent -- the highest rate since 1983. Republicans blame President Obama for the soaring deficits that, they say, are drawing the economy toward ruin. Democrats blame former President George W. Bush, during whose administration huge deficits paid for his tax cuts as well as the wars in Afghanistan and Iraq.

I see another villain seldom accorded the blame it deserves: China.

It's hard to avoid news right now about China's undervalued currency and the coming "currency war," as the Brazilian finance minister recently put it. But for most people, this seems like an arcane technical issue, the province of bankers and trade officials -- far removed from their lives. Not so.

The Chinese government, not the free market, sets the value of the nation's currency, the yuan. It's variously estimated to be worth 20 percent to 40 percent more than the government-set rate. Let's say, for argument's sake, it's undervalued by 30 percent.

Now imagine you need to buy a new stove. If one store offers all of its stoves at 30 percent less than the others, wouldn't you be more likely buy your stove there? That's the problem. China sells its products at unusually low prices because when you use dollars, say, to buy products in yuan, the currency is worth so little that the products are effectively heavily discounted.

For China, conversely, buying foreign products is prohibitively expensive because the currency used to buy those products is so undervalued.

What does all that have to do with the unemployment rate? Just imagine how many new jobs would be created if the Chinese currency were adjusted upward to its actual value and, as a result, China, the world's most populous nation, could afford to buy more American goods.

As it is, the International Monetary Fund says the world's major economies are growing at an average rate of 2.7 percent this year. But the fund says China's growth rate is 10.5 percent -- the highest among major nations, in large part because if China's currency imbalance.

That's why President Obama and Treasury Secretary Timothy Geithner, among others, are so exercised about the Chinese currency problem. That's why the House of Representatives passed a bill late last month that would levy sharp tariffs on Chinese goods if the nation doesn't raise the yuan's value.

The possibility of a currency war dominated the IMF meeting in Washington last weekend. Despite heated discussion, nothing significant was done.

The Chinese government insists it cannot adjust its currency. Wen Jiabao, the Chinese premier, speaking in New York during the United Nations General Assembly last month, asserted: "There is no basis for drastic revaluation of the yuan, and a 20 to 30 percent rise would cause the bankruptcy of numerous enterprises and severe unemployment," adding that "China would suffer major social upheaval."

And there lies the true explanation for China's dangerously selfish behavior. A Chinese government mantra is the goal of building "a harmonious society." For China, that means a society where everyone is employed. As several Chinese commentators have noted recently, Chinese who are able to earn a comfortable living for themselves and their families rarely challenge authority.

Mindful of that, economic development is the Chinese dictatorship's single-minded goal. That's one reason it doesn't seem particularly concerned when its companies export toxic wallboard, deadly cat food, poisoned medicines and so many other defective products. An export is an export. For the leadership, nothing is more important than keeping the populace fed and content.

Last spring, China promised to allow the yuan's value to rise "gradually." Well, in the months since, it has risen by just under 2 percent. China made the same promise to former President Bush, but then made barely noticeable changes.

So what's to be done? You can't expect American companies to boycott China. They are responsible to shareholders and customers to remain competitive, and unless every company stopped buying from China at once, those that did would be at a competitive disadvantage.

Only if Beijing knew that the developed world was united in demanding change, or China would face collective penalties, would there be any chance Chinese leaders would listen.

But the major nations squandered one opportunity for that during the IMF meeting last weekend. Now every country is looking out only for itself. Brazil, Japan, South Korea and some others are beginning to lower the value of their own currencies. The U.S. is also letting the dollar drift downward. What lies ahead, most likely, is economic chaos.

 

Joel Brinkley, a professor of journalism at Stanford University, is a Pulitzer Prize-winning former foreign correspondent for the New York Times

SocialTwist Tell-a-Friend

 

Available at Amazon.com:

The End of the Free Market: Who Wins the War Between States and Corporations?

Running Out of Water: The Looming Crisis and Solutions to Conserve Our Most Precious Resource

Bottled and Sold: The Story Behind Our Obsession with Bottled Water

Water: The Epic Struggle for Wealth, Power, and Civilization

The Great Gamble

At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes

 

  • Economic Woes Put Brittle Nations on Edge
  • A Divided and Insular European Union
  • Do not Expect China to Budge on the Yuan
  • Why on Earth Does America Want a Stronger Chinese Currency?
  • Nuclear Club Has Yet Another Applicant
  • Nuclear Armament Still Our Central Issue
  • Embattled Islam
  • 'Europe Looks East' Hints at the Future
  • Choosing Between the Evil of Two Lessers In Afghanistan
  • Chavez Lost Ground but Will Fight Back
  • Education Too Important to Be Left in Government Hands
  • Latin America In Denial About the Quality of Its Schools
  • Millennium Development Goals for Women Largely Unmet
  • North Korean Succession Plans Are Shrouded in Mystery
  • Rogue BFFs North Korea and Iran Make Quite a Pair
  • American Role in Israeli-Palestinian Talks Is a Problem
  • Iraq Reluctant to Pay Its Fair Share of Security Costs
  • Iran's 'Shaky' Ahmadinejad
  • United States Could Be Alone as Europe Turns Inward
  • Hugo Chávez May Lose Even if He Wins
  • Brazil Needs Dose of Constructive Paranoia
  • Latin American Commodity Exporters Need to Diversify
  • Stoned on Righteousness
  • Our Man in Moscow
  • Widening Divide in American-Chinese Commercial Interests
  • The New Old World Order
  • Global Human-Rights Cause Gets a Shot in the Arm
  • Obama's Foreign Policy Performance
  • New Russia Takes Root in Saint Petersburg and Moscow
  • Dismantling Worst-Case Proliferation Scenarios
  • A Numbers Game in the Middle East
  • Middle East Peace Talks: Here We Go Again
  • Obama and Clinton Revive Middle East Peace Talks
  • Guess Who's Coming to the Table
  • Iraq: Unanswered Policy Questions on U.S. Troops
  • Iraq: Implications of a Pointless War
  • Iraq: Book Review
  • Iraq: No Drums and No Bugles: None Dare Call It Victory
  • Pakistan's Leadership Sustains Flood Damage
  • A French Leftist Ritual Takes on Sarkozy
  • United States Losing Latin America Market Share
  • The Power of Being Multilingual
  • Chavez's Obsession With Past Turns Creepy and He's Not Alone
  • Obama Could Help Stop Mexico's Bloodshed
  • Interdependency Theory: China, India and the West
  • The Dangerous Dog Days of Summer
  • The Next 500 Years
  • A New Plan For Nuclear Postures
  • Strengthening the Political - Military Relationship
  • Hydraulic Pressures: Into the Age of Water Scarcity?
  • South Korea: Prosperity and Anxiety
  • China Wealthy? That's Rich!
  • Islamism Unveiled: From Berlin to Cairo and Back Again
  • Beyond Moderates and Militants: Charting a New Course in the Middle East
  • Middle East Peace Talks: Pointless Talks
  • Why Israel Can't Rely on Deterrence Against Iran's Nuclear Program
  • How to Handle Hamas
  • Bringing Israel's Bomb Out of the Basement
  • Iraq: Anxious Iraqis Look at Uncertain Future
  • Iraq: U.S. Combat Troops' Departure Leaves Uncertainty in its Wake
  • Iraq: A Promise Kept?
  • An Unlikely Trio: Can Iran Turkey and the United States Become Allies?
  • Staying Power: The U.S. Mission in Afghanistan Beyond 2011
  • Long Road Ahead for Afghan Security Forces
  • Afghanistan's Dirty Little Secret
  • Russia's New Nobility
  • Mexico Needs U.S. Help But Not Troops
  • Mexico's Narco Problems Are Our Problems, and Vice Versa
  • No 'I' in 'Team,' but Plenty of 'I' in India
  • Afghanistan - There Can Be No Graceful Exit
  • Afghanistan Timetable Remains a Factor of Uncertainty
  • We Are Playing Fidel Castro's Game
  • Has the Time Come to Legalize Drugs?
  • Handling Tensions on the Korean Peninsula
  • Richard C. Holbrooke: Pakistan Aid Inadequate
  • Afghanistan Leaks Answer Few Questions
  • Afghanistan & The Karzai Problem
  • Afghanistan - Winds of Changing Policy
  • Obama's Juggling Act in the Middle East
  • Defusing Lebanon's Powder Keg
  • Germany's Good Fortune Tips the Scales Against its Neighbors
  • End Poverty: Export Capitalism
  • Haitian Quake Hasn't Dislodged Status Quo
  • Why We Go Back to Haiti
  • Iraq - Mission Accomplished II
  • The Fight Escalates Against Fake Drugs
  • China's Coal Addiction
  • Afghanistan: The Pentagon's Lost War
  • Afghanistan: The Cost of Nation Building
  • Afghanistan: Pentagon Papers Redux?
  • Behind Iraq's Long Political Indecision
  • Venezuela - Colombia Spat to Pass, Return
  • Will China Rule the World?
  • NATO's Future Involves More Global Partnerships
  • Gloom Awaits U.S. Climate Diplomacy
  • U.S. - U.K.: Difficult Duet in Afghanistan
  • 'Pariah of the Pacific' Has Ham-handed Grip on Fiji
  • Turkey Takes the Veil
  • For Israel a Two-State Proposal Starts With Security
  • Is It Too Late to Stop Iran
  • The Middle East's Private Little War
  • Reality and Reform for How the EU Keeps Its Peace
  • Chancellor Angela Merkel's Sinking Support
  • The Real Reason Why Afghanistan Is a Lost Cause
  • The War Drones On
  • When the 'Right War' Goes Wrong
  • The Afghanistan Paradox
  • Pakistan's Gambit in Afghanistan
  • Obama Wasting Opportunities in Latin America
  • Stopping Nuclear Proliferation Before It Starts
  • Veiled Truths: The Rise of Political Islam in the West
  • Steps to Stop Iran From Getting a Nuclear Bomb
  • Iran: The Nuclear Containment Conundrum
  • Iran: The Right Kind Of Containment
  • China Is the Key to Handling Nuclear North Korea
  • Coping With China's Financial Power
  • What China's Currency Reform Means For Investors
  • Russian-American Obstacles Overshadow Obama-Medvedev Meeting
  • Russia's Courtship of Silicon Valley
  • Ukrainian Blues: Viktor Yanukovych's Rise and Democracy's Fall
  • Russia: Prisoners of the Caucasus
  • The Afghan Challenge Is Far Tougher
  • New Guard, Old Policy on Afghanistan
  • Fear and Uncertainty in Afghanistan
  • Afghanistan: Bribing the Enemy
  • Afghanistan Poses Difficult Challenges
  • Defining Success in Afghanistan
  • Sad Stan, Famous Petraeus
  • The Challenge of Reconciliation in Kenya
  • The Tyranny of Unity in Zimbabwe
  • Mexico: The New Cocaine Cowboys
  • Under Santos Colombia Could Rise to the Next Level
  • Autocrats' Latest Weapon: Indirect Censorship
  • Latin America's Rich Should Be More Generous
  • Castrocare in Crisis

 

(C) 2010 Joel Brinkley

 

Recommend

Search Powered By Google

Google Search   

ADVERTISEMENT

Advertisement

Advertisement

ADVERTISEMENT

Job & Career Search

career & job search                    job title, keywords, company, location
  • HOME
  • WORLD
  • USA
  • BUSINESS
  • WEALTH
  • STOCKS
  • TECH
  • HEALTH
  • LIFESTYLE
  • ENTERTAINMENT
  • SPORTS

World - Do not Expect China to Budge on the Yuan | Global Viewpoint

  • Services:
  • RSS Feeds
  • Shopping
  • Email Alerts
  • Site Map
  • Privacy