[Peace-discuss] Fw: [gangboxnews] Implications of China's Currency Policy on Trade

[E. Wayne Johnson]

Americans should consider what is going on behind the scenes.  Indeed 
there are many Chinese-Foreign Joint Venture companies and even 
Foreign-Owned Companies operating inside China.  Part of the contract of 
some of these companies with the PRC is that they are exporters.

The current fascination with the undervalued reminbi (RMB) yuan is 
nothing new at all.  The yuan has been undervalued for many years.  
Estimates of 40% are ridiculous.  The RMB has been undervalued by a 
factor of 2 or more for the 15+ years that I have been following it.

Americans who think they want this corrected are barking up the wrong 
tree.  The RMB will decouple from the Dollar.  But folks, that peg of 
the RMB to the Dollar is one of the last threads that preventing 
free-fall of the Dollar and skyrocketing inflation in the US.

The Fundamental problem behind hollowed out American domestic companies 
has nothing to do with China.



On 11/20/2009 6:48 AM, unionyes wrote:
> ----- Original Message -----
> *From:* wilsoncharless <mailto:chasmn at hotmail.com>
> *To:* gangboxnews at yahoogroups.com <mailto:gangboxnews at yahoogroups.com>
> *Sent:* Thursday, November 19, 2009 10:23 PM
> *Subject:* [gangboxnews] Implications of China's Currency Policy on Trade
>
> *Implications of China's Currency Policy on Trade*
> Three Reports from Congressional Research Service
> *Excerpts below*
> *from: *http://www.ncseonline.org/NLE/CRSreports/08Jun/RS21625.pdf 
> <http://www.ncseonline.org/NLE/CRSreports/08Jun/RS21625.pdf>
> - - - If the yuan is undervalued vis-à-vis the dollar (estimates rage 
> from 15% to 40% or higher), then Chinese exports to the United States 
> are likely cheaper than they would be if the currency were freely 
> traded, providing a boost to China's export industries (and, to some 
> degree, an indirect subsidy).- - - *Such a policy, in effect, benefits 
> Chinese exporting firms (many of which are owned by foreign 
> multinational corporations)* at the expense of non-exporting Chinese 
> firms, especially those that rely on imported goods.
> **
> *- - -  Chinese statistics indicated that more than half of its 
> exports to the world are produced by foreign-invested firms in* 
> *China, many of which have shifted production to China in order to 
> gain access to low-cost labor.*
> **
> *- - - These factors imply that much of the increase in U.S. imports 
> (and hence, the rising trade deficit with China) is largely the result 
> of China becoming a production platform for many foreign companies, 
> rather than unfair Chinese trade policies.*
> **
> *5-8-08 Report in six page pdf at:* 
> http://www.ncseonline.org/NLE/CRSreports/08Jun/RS21625.pdf 
> <http://www.ncseonline.org/NLE/CRSreports/08Jun/RS21625.pdf>
> *1-9-08 Report in 57 page pdf at:* 
> http://www.fas.org/sgp/crs/row/RL32165.pdf 
> <http://www.fas.org/sgp/crs/row/RL32165.pdf>
> *6-17-09 Report in 12 page pdf at:* 
> http://www.fas.org/sgp/crs/row/RS21625.pdf 
> <http://www.fas.org/sgp/crs/row/RS21625.pdf>
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