The Yuan problem

A week after leaders of the G-20 met in South Korea to discuss the global monetary policy situation, the Americans are sounding the alarm about the situation in China, another powerful country that exports significant manufactured goods.

 

A semi-annual report by the US-China Economic and Security Review Commission released Tuesday indicates that China deliberately keeps  its currency value low.

 

According to the article from CNN Money, many experts believe that this decision has a negative effect on the U.S. economy and that a low Yuan is affecting U.S. money reserves.

 

Moreover, in a difficult economic context, experts think that it is blocking U.S. companies from being competitive and creating jobs because Chinese prices are artificially low.

 

In recent months, Chinese authorities have slightly increased the value of the Yuan, but not at the level desired by the major powers and other members of the G-20.

 

As long as the Yuan remains low, the US-China trade deficit may still increase.

Submitted by Jean-Virgile Tassé-Themens

 

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