China needn't accelerate the appreciation of the RMB?

China needn't accelerate the appreciation of the RMB?
Sep 1, 2008 03:50
KATRINA Points: Join Date: Nov 29, 2004 Status: offline	Cheng Siwei, an influential figure in China's ecomonic policy making said China needn't accelerate the appreciation of the RMB against US dollar. His comments have made many Americans feel worried. They hope that the RMB can appreciate faster and faster. Why? They think that RMB rise will help "balance the world economies and improve prospects for US growth". According to Cheng Siwei, US dollar will not weaken forever and it maybe becomes stronger. In August, US dollar once rose very much. He also said that the RMB would appreciate against other currencies. He estimates that the oil prices will fall below 100 yuan again and China will soon cancel the fuel subsidies. What do you think of his assertion?

Sep 1, 2008 03:50

KATRINA
Points:
Join Date: Nov 29, 2004
Status: offline

Cheng Siwei, an influential figure in China's ecomonic policy making said China needn't accelerate the appreciation of the RMB against US dollar. His comments have made many Americans feel worried. They hope that the RMB can appreciate faster and faster. Why? They think that RMB rise will help "balance the world economies and improve prospects for US growth".

According to Cheng Siwei, US dollar will not weaken forever and it maybe becomes stronger. In August, US dollar once rose very much. He also said that the RMB would appreciate against other currencies. He estimates that the oil prices will fall below 100 yuan again and China will soon cancel the fuel subsidies.

What do you think of his assertion?

Sep 1, 2008 04:16

APAULT
Points:
Join Date: Mar 11, 2006
Status: Offline

Most definitely China should not be concerned about its value relative to any single currency and economy...and that is what the government changed about 3 years ago. It is now being valued against a small 'basket' of currencies.

The US is only concerned about itself and will use all the free market arguments it can - while maintaining many subsidies and other market distortions. Australia has a very open economy yet I have never heard any complaint from here. China should continue to do what it is doing...choosing policies which benefit China, while ensuring they take into account the world economy. That means continue with a slow and steady appreciation of the RMB.

Sep 1, 2008 21:57	#2
COOLSPRINGS Points: Join Date: May 19, 2008 Status: Offline	Recent high energy price to some extent is related to Beijin Olympics for which China could increased its engery reserves.

Sep 7, 2008 23:40

APAULT
Points:
Join Date: Mar 11, 2006
Status: Offline

Sorry Cool, but I doubt that. The Olympics is just a pinprick in comparison to the nation's economic activity as a whole. Energy prices are high because of a very high world demand and a limited supply of fuels.

China is a major reason for that high demand (thatis not a criticism), while the restricted supply is from the difficulty of increasing production rapidly, and maybe some deliberate restrictions by producers.

Sep 15, 2008 03:03	#4
GUEST07999	it is not so much of limited supply of fuel, there is enough to go around, just that speculators are in the game pushing up the fuel price.

Post a Reply to: China needn't accelerate the appreciation of the RMB?