As Pressure Builds, Will China Let Yuan Rise?

From a Q&A from Reuters:

WHY IS CRITICISM OF THE YUAN HEATING UP AGAIN?

In a nutshell, U.S. domestic politics.

With many U.S. lawmakers facing re-election in November and unemployment hovering just below 10 percent, pressure is building on President Barack Obama’s administration to push China to break the yuan’s nearly two-year-old peg to the dollar.

Although many economists believe yuan appreciation would do little to reduce the overall U.S. trade deficit, a vocal group of lawmakers in Washington says an undervalued currency subsidises Chinese exports at the expense of U.S. firms and jobs.

Also related, see “U.S. Presses China Over Trade, Yuan” from the Wall Street Journal and “Beijing stays firm on yuan: analyst” from Global Times.

Read more about the yuan rate and U.S.-China economic relations via CDT.

June 11, 2010 12:56 PM
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