Currency Concerns

China Rejects U.S. Complaints on Its Currency

The United States is right in pressuring China to raise the value of its currency.

If China was to revalue its currency, the United States would see a major increase in domestic consumption, and ultimately jobs. Right now, Americans buy so many Chinese-made products because they are cheap. With a raise in the value of its currency, Chinese products would be more expensive, and much less appealing to American consumers. For example, a toy made in China costs $1 to a U.S. customer, and the same toy made in the U.S. costs $1.03. More American customers would buy the Chinese-made toy, benefiting China’s economy. After the five percent appreciation of the renminbi, the Chinese toy would be $1.05. Americans would now most likely buy the U.S. toy, benefiting our economy. If this happened with all the Chinese products the United States currently imports, we would see a major boost, especially in jobs.

China’s willingness to adjust the value of the renminbi would also probably better the overall relationship between the United States and China. “Internet censorship, hacking attacks directed at American companies, arms sales to Taiwan and the pending visit of the Dalai Lama to Washington have all cropped up in the last month as points of conflict,” Wong and Landler of The New York Times say. For the past few months, the Obama administration has been trying to pressure China to cooperate with the United States and the U.N.’s efforts on many occasions. China just keeps doing things on its own. These decisions by both sides keep increasing tension within the extremely intertwined relationship. If China was to agree to raise the value of the renminbi, it may relieve some of the tension between these two major world powers. The cooperation of China with the U.S. and the U.N. would make world efforts much easier.