posted on Jan, 18 2011 @ 01:26 PM
reply to post by hapablab
China makes their currency "low" so that Chinese people cannot afford US Goods (because it takes nearly 7 Yuan to make a US Dollar.. most Chinese
are paid so poorly it would take a lot of saving to buy a good in US Dollars)
This means US companies cannot export much to China
But it makes Chinese Goods very, very cheap.. so we buy their crap by the ton while they buy none of ours..
Thus, it's unfair currency manipulation due to the trade surplus the Yuan should be extensively higher.
It also has a lot to do with wages in China.. it's ok to have a high currency if the wages of the people matched the value (like the Yen in Japan
which is usually around 100yen to a Dollar)
China's average income per person is $4,400 (8,100 Yuans) USD if the Yuan were higher, they'd make more, thus afford more.
Japan as a comparison is $29,000 USD (3,700,000 Yen) Thus they can afford more US Goods.
yay economics is fun