In recent years, the level of distrust has skyrocketed due to currency manipulation, or the tool used by the P.R.C. to keep its currency value low in order to keep exports cheap. While most all trading nations participate in currency manipulation, China is one of the largest culprits. In order to have an undervalued currency, a nation must be buying more than they are selling. The Chinese, with their cheaply made products and underpaid workers, export colossal amounts of products all around the world for inexpensive prices. At this point it is clear to see that the Chinese are selling more than they are buying, or exporting an enormous amount of goods and importing less. This fact should mean that the Chinese currency is strong and the value of the Chinese yuan should be driven up. The Chinese government does not want the yuan’s value to go up because than China’s exports will be more expensive and less appealing for other nations to buy. So to keep the cost of the yuan down, China uses its incoming wealth to buy tremendous amounts of U.S. dollars. Therefore, the Chinese economy is technically selling more than it is buying, driving the value of the yuan down, keeping Chinese exports and wages low and driving up the value of the U.S. dollar. By buying U.S. dollars, the Chinese can maintain an extremely high GDP, or gross domestic product, which is the sum of all the money inside the country's borders at any given time. China can afford to maintain such a high GDP because their biggest import is money, keeping their treasuries full and their wages low. This trick costs America millions of jobs and makes China an economic superpower at the same
In recent years, the level of distrust has skyrocketed due to currency manipulation, or the tool used by the P.R.C. to keep its currency value low in order to keep exports cheap. While most all trading nations participate in currency manipulation, China is one of the largest culprits. In order to have an undervalued currency, a nation must be buying more than they are selling. The Chinese, with their cheaply made products and underpaid workers, export colossal amounts of products all around the world for inexpensive prices. At this point it is clear to see that the Chinese are selling more than they are buying, or exporting an enormous amount of goods and importing less. This fact should mean that the Chinese currency is strong and the value of the Chinese yuan should be driven up. The Chinese government does not want the yuan’s value to go up because than China’s exports will be more expensive and less appealing for other nations to buy. So to keep the cost of the yuan down, China uses its incoming wealth to buy tremendous amounts of U.S. dollars. Therefore, the Chinese economy is technically selling more than it is buying, driving the value of the yuan down, keeping Chinese exports and wages low and driving up the value of the U.S. dollar. By buying U.S. dollars, the Chinese can maintain an extremely high GDP, or gross domestic product, which is the sum of all the money inside the country's borders at any given time. China can afford to maintain such a high GDP because their biggest import is money, keeping their treasuries full and their wages low. This trick costs America millions of jobs and makes China an economic superpower at the same