Most US Senators feel that the revaluation move was too small and that China needs to allow the currency to increase in value, especially since 2.5% pales in comparison to the RMB’s predicted undervaluation of 30-40%. China is keeping its 0.3% percent daily trading band against the dollar, which means that even with this move there will not be a lot of volatility in the currency pair. China has many reasons to want to revalue their currency. The revaluation also makes imports cheaper for China. This comes at a critical time when commodity prices are rising.
An increased amount of debt owed to China therefore works to counter the US influence in world politics in favor of China. Moreover, this has aided to keep the interest rates in the US low. This is to the advantage of the US economy though. Were the interest rates to rise, the recession of the US economy would soar uncontrollably. Therefore, the holding of a big US debt by China leads to China having huge influence over US policies; foreign relations policy and also economic policies.
Foreign Direct Investment in China 1.0 Introduction I found this article "Foreign direct investment: Companies rush in with the cash" on the financial times website (www.FT.com) published December 11, 2002 written by John Thornhill. The reason for choosing this article is my personal interest in the Chinese economy and its attractiveness to the foreign investors. Apart from the foreign direct investment this topic has also helped me in understanding the impact of Chinese economy on the global market. China the land of giant panda has also become the land of numbers and achievments. Official figures shows that China's economy is the fourth largest in the world when measured by nominal GDP and is predicted to surpass Germany to take the third place in early 2008.
Introduction There have been numerous calls by the US policy makers for China to allow its currency to float freely. Critics have pointed out that China policy of manipulating its currency preventing it from appreciating has given its manufacturers undue advantage. Both goods sold domestically and those exported by Chinese Manufacturer are relatively cheaper than those of manufacturers from economies whose Chinese currency is undervalued against; especially the US. This aspect has been accused of contributing majorly to the annual large US trade deficits. Probably due to pressure, China has been allowing its currency to appreciate.
http://www.americanprogress.org/issues/2004/09/b193700.html The United States and China share the most imbalanced bilateral trade relationship in the world. The United States imports more goods from China than it exports to a tune of $202 billion dollars each year. All told, China alone accounts for nearly 26% of the United States' $725.8 billion trade deficit. “Increasingly, this imbalance has been the subject of a major political backlash within the U.S. congress, where some have charged that the US is destroying its industrial base to support a communist country's industrialization." http://worldnews.about.com/od/china/a/china_trade.htm What Causes the Trade Deficit?
This paper aims to argue why China’s surplus is neither good for China nor the U.S. in terms of “exchange rate manipulation” and “high savings rate”. Therefore, the intention of this research is to study how these forces may affect the economic development of both countries as well as their current consequences. LITERATURE REVIEW The economic relationship between U.S. and China has been expanding considerably over the last three decades. According to the World Trade Organization (WTO) data (2008), the total U.S.-China trade has increased from $5 billion in 1980 to $409 billion in 2008. Furthermore, in 2008, China was the second largest U.S. trade partner, its third most principal export market... ... middle of paper ... ... producer would be also convenient for the consumer.
Globalization is not a new concept – trade, migration, market integration and capital flows have been practiced in various forms dating back centuries. China is at the epicenter of our globalized world and their success is attributed to the tenets of Adam Smith’s Wealth of Nations. However, opponents of the globalization believe if Smith were alive today, he would be repulsed by our modern day international business strategies. The general consensus among dissenters of globalization is the misguided belief that capitalism at any level is missing the moral sentiment espoused by Smith’s philosophical viewpoints. Even though Adam Smith would acknowledge that some Chinese citizens are casualties of globalization, he would conclude the economic development of China’s poverty stricken society unequivocally raised their standard of living.
That commercial seemed a little extreme, so for this paper, I seek to correct these sorts of misconceptions, or to at least show that some arguments about the national debt are a little wrong. Probably the most important misconception about the national debt is the misconception that China owns most of the national debt, and that such a situation makes the United States government a puppet to China. The latter misconception doesn't take much research to see as an exaggeration of the truth. Unlike personal debt, national debt isn't enforced by some higher power. Money owed to China is a deal between the borrower and China, and there aren't any higher powers to force the collection of debts.
Between the years 2001 and 2013 there has been a steady trend of manufacturing jobs leaving America, which totaled to about 3.2 million positions (Katherine Peralta). There is no doubt that China is a major powerhouse of industry. However, with China producing goods so cheaply and quickly, quality of goods may suffer, as well as the environment. Is there a way to get quality, safe, and environmentally responsibly produced goods that are low cost from China? Does the U.S. need to suspend trade with China to make them comply with quality and safety standards?
“Made in China” is a label we can find nearly every product in the US consumer market, moreover the world market. The products that are made-in-China replaced the made-in USA gradually and nowadays it is hard to find the products which are not made in China, all over the world. The US was the biggest supporter of the growth in Chinese Economy and the National power, unintentionally. China was able to take over world’s processing industry because America gave up the industry. It allowed China to become the world number one merchandise manufacturer in these days.