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Thread: Why does US call for RMB appreciation?
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[quote=WCTMAN,237458]The US doesn't think that the Chinese are playing fair since the rmb is not a free floating currency. That is, the value of the rmb is not determined by international currency markets, but by the Chinese govt. A low priced currency stimulates exports, since Chinese goods cost less to produce and sell abroad. A tshirt made here in China is one less tshirt made somewhere else in the world. At the same time, a low valued rmb makes imports to China more expensive, resulting in a large surplus in the balance of payments for the Chinese govt. The US is not comfortable with this. Not only does money flow here, but jobs too. And, the Chinese and the US do not share the same political philosophy, with the US now worrying that too much of this "new" money flowing into China is being spent on the military. [/quote]
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