Hi ep,
My own thoughts regarding this so-called "pressure" on the Chinese to revalue the yuan is that it is nothing more than a bit of premature election year rhetoric, nothing more and nothing less... The media reports make for good reading back home for the politicians.
Anyone who is competent knows, or should know, that any proposed revaluation will not create nor save even one job on this side of the Pacific Ocean. Any perceived Chinese manufacturing advantage(s) is mostly because of China's huge pool of willing and available low-cost workers, not some currency peg.
If the Chinese were to revalue, heck, let's say allow their currency to float, the immediate result would be price increases in all those inexpensive components made in China that are used in American (and elsewhere around the globe) assembly plants, forcing inflationary price increases, and corresponding decreases in consumer demand, especially in US markets. A Chinese revaluation could easily become the hatchet that kills the goose that lays the golden eggs, and most everyone knows it, whether or not they'll admit to it...
Just my opinion, though...
KJC |
