Why is the US still claiming China "manipulates" currency? (2014, buy)
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The CNY has appreciated by over 30% since 2005, with greater flexibility.
As of Sept 2014, China's trading surplus was 2% of GDP, this compares with about 7% for Germany, 13% for Switzerland, 11% for Norway and 20% for Singapore. But Obama keeps saying China manipulate exchange rate.
There doesn't seem to be any justification of currency manipulation currently. Or is it just a catchword whenever America feels like to throw at others?
It is better if China does manipulate it for most readers here, a lower RMB value means cheaper Chinese products for the entire world except people in China. Especially for African countries which cannot afford it if RMB continues to rise. Africa does not have the ability to support factories like China does, cheaper RMB is good for Africa.
Are you saying China doesn't manipulate the exchange rate? Nothing wrong with it, don't understand what the big deal is.
What does "manipulate" mean? If you mean the government intervenes with exchange rate, of course they do.
However, Hong Kong dollar has a fixed peg to USD. The Danish Krone is pegged to the euro. Are they all manipulating currency?
On March 12, 2009, the Swiss central bank announced that it intended to buy foreign exchange to prevent the Swiss franc from any further appreciation. Swiss franc weakened from 1.48 against the euro to 1.52 in a single day. At the end of 2009, the currency risk seemed to be solved; the SNB changed its attitude to preventing substantial appreciation. Unfortunately, the Swiss franc began to appreciate again. Thus, the SNB stepped in one more time and intervened at a rate of more than CHF 30 billion per month. Is that manipulation?
There are many kinds of exchange rate policies, floating, fixed, crawling peg, peg within a band (as the case with China). It is foolish to say anything other than floating rate is currency manipulation.
There are advantages and disadvantages in all of them, and no economist says "not floating is manipulation".
I guess manipulation is when the government use exchange rate to take advantage of other countries, particularly in terms of trading. However, I fail to see China qualifies that definition with its shrinking trade balance (used to be over 10% a decade ago).
It is better if China does manipulate it for most readers here, a lower RMB value means cheaper Chinese products for the entire world except people in China. Especially for African countries which cannot afford it if RMB continues to rise. Africa does not have the ability to support factories like China does, cheaper RMB is good for Africa.
the fact is, China's current account balance is low - 2%, and it is half of the 4% threshold economist consider too high to cause alarm for current manipulation.
The US ALWAYS complain about China because China runs a large surplus against the US, but not other countries (China is trade deficit with countries like Germany, Japan and Taiwan for example). So it doesn't seem to be China's problem, but rather America's problem of buying too much? But America's logic seems to be: I don't care about the rest of the world - if you have a big surplus against ME, then you are manipulating the CNY.
And I agree with you that china's cheap exports actually helped poor countries to be afford to buy a lot of necessities - clothes, machines, tools etc.
Most countries in the world are manipulating their currencies.
^ and they are also always looking out for their own best interests. China is no different. The US gov't or businesses may make comments about Chinese currency manipulation where it benefits them to do so; what does it matter, one way or the other?
^ and they are also always looking out for their own best interests. China is no different. The US gov't or businesses may make comments about Chinese currency manipulation where it benefits them to do so; what does it matter, one way or the other?
This is a non-issue.
I agree. It's standard practice in the age of QE. In fact, only the fools aren't doing it.
The CNY has appreciated by over 30% since 2005, with greater flexibility.
As of Sept 2014, China's trading surplus was 2% of GDP, this compares with about 7% for Germany, 13% for Switzerland, 11% for Norway and 20% for Singapore. But Obama keeps saying China manipulate exchange rate.
There doesn't seem to be any justification of currency manipulation currently. Or is it just a catchword whenever America feels like to throw at others?
To keep Xi inline. What do you care? You live in the safety of canada with clean water, sanitation, and the free press.
I think one way of this supposed "manipulation" is by making use of CNY to buy oil in the Middle East by countries like Russia, Iran and ofcourse China.
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