This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Victor Bryson ECO 570 Assignment 3 April 11, 2010 Research how the value of Chinese currency is determined and what political pressures are being placed on the Chinese government to change their method of determining their currency's value. Discuss how this affects the world's trade with China. Does the current method give China any trade advantages? If so, what are they? China’s exports have been bolstered by its policy of keeping its currency, known as the renminbi or yuan, pegged at a nearly fixed rate to the dollar. Many members of Congress and economists say that by spending several hundred billion dollars each year to hold down the value of the renminbi, China has made its exports extremely competitive in foreign markets and taken away sales from manufacturers in the United States and other countries. But if China allows only a small move in the renminbi, the effects on the American trade deficit may also be small. Chinese companies are formidably competitive and, while labor costs deficit may also be small....
View Full Document
- Spring '10
- International Trade, United States dollar, Victor Bryson ECO