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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (405789)	1/21/2011 3:49:52 PM
From: longnshort	Respond to of 794009

China undervalves it's currency "Why Does China Wish to Undervalue the Yuan? China’s engine of growth is exports. The lower the value of the Yuan, the better it is for China’s exporters. Basically, if 1 Dollar buys 7 Yuans, and a exporter sells a Chinese Shirt for 10 dollars – he pockets 70 yuans. But if one Dollar was worth only 5 Yuans, the exporter would only be able to pocket 50 yuans. By How Much is the Yuan Undervalued? It is really impossible to tell by how much the Yuan has been undervalued, but estimates suggest that this range is between 15% – 40%. A direct consequence of keeping the local currency undervalued is inflation, and since China faced rather high inflation rates in 2008 – it did plan to let its currency appreciate in 2008 (but that was before sub-prime)."