http://www.nytimes.com/2010/04/04/business/04yuan.html?scp=1&sq=china%20renminbi%20&st=cse
This article is concerned with the delay of a decision whether to declare the China a currency manipulator. The reason for this delay can be attributed to the fact that President Hu Jintao will attend a nuclear security summit meeting in Washington after China give consent of stricter sanctions on Iran’s nuclear program.
Actually, the reason for which the Chinese government is reluctant to let Renminbi appreciate is that the appreciation will lead to an increase in unemployment in southern China, where there are lots of factories produce goods for exports. If Renminbi appreciates to a large degree, these factories will definitely face a bankruptcy. The appreciation of Renmibi in the previous years has actually posed pressure on these firms. Actually, workers in these factories usually just earn a minimum level of living because the exports cannot bring these firms as many profits as many people expect. The Chinese government has been working on this issue for years to try to import some high technologies in order to upgrade these factories and improve the living standard of the workers. The appreciation of Renminbi in the previous years is actually a way to push these factories to upgrade themselves. But because of the depression, exports have decreased and unemployment rate has increased. The factories cannot survive if the Renminbi appreciates to a large degree. I think if it were not for the depression, this issue would not be the center of US-China relations because the Chinese government would let Renminbi to appreciate.
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I think this article is interesting because it ties in the scale of influence economics has on IR. As we can see, China is not following its usual policy in concern for its relationship with other states. If it would let the Renminbi appreciate, this would cause inflation in the countries it trades with, and a domino effect would occur. Exploring the background of political decisions, and seeing what the important factors are, allows us to really gage what influences IR. Critical theories do this in order to give people a better understanding behind political decision, outside the realms of just mainstream theories.
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