How Changes in the Value of the Chinese Currency Affect U.S. Imports
CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE
How Changes in the Value of the Chinese Currency Affect U.S. Imports
Index: June 2005 = 100
120
115
Value of Renminbi Relative to Dollar
110
105
100
Prices of U.S. Imports from China
95 0 Dec. 2004
Mar. 2005
June 2005
Sept. 2005
Dec. 2005
Mar. 2006
June 2006
Sept. 2006
Dec. 2006
Mar. 2007
June 2007
Sept. 2007
Dec. 2007
Mar. 2008
JULY 2008
Pub. No. 3148
A
CBO
PA PE R
How Changes in the Value of the Chinese Currency Affect U.S. Imports
July 2008
The Congress of the United States O Congressional Budget Office
Preface
his Congressional Budget Office (CBO) paper discusses factors that would limit the benefit to U.S. manufacturers from a potential appreciation of the Chinese currency. In keeping with CBO’s mandate to provide objective, nonpartisan analysis, the report makes no recommendations. Bruce Arnold of CBO’s Microeconomic Studies Division wrote the paper under the supervision of Joseph Kile and David Moore. Inside CBO, William Randolph provided valuable guidance at several points in the development of the project, and David Brauer, Justin Falk, Juann Hung, Jonathan Huntley, and Mark Lasky reviewed various drafts. Outside CBO, Judith Dean, Michael Ferrantino, and Zhi Wang, staff of the U.S. International Trade Commission, and Morris Goldstein at the Peterson Institute for International Economics provided comments. (The assistance of external reviewers implies no responsibility for the final product, which rests solely with CBO.) Leah Mazade edited the paper, and Sherry Snyder proofread it. Maureen Costantino designed the cover and prepared the paper for publication. Lenny Skutnik printed copies of the paper, Linda Schimmel handled the print distribution, and Simone Thomas produced the electronic version for CBO’s Web site (www.cbo.gov).
T
Peter R. Orszag Director July 2008
Contents
Introduction and
How Changes in the Value of the Chinese Currency Affect U.S. Imports
Index: June 2005 = 100
120
115
Value of Renminbi Relative to Dollar
110
105
100
Prices of U.S. Imports from China
95 0 Dec. 2004
Mar. 2005
June 2005
Sept. 2005
Dec. 2005
Mar. 2006
June 2006
Sept. 2006
Dec. 2006
Mar. 2007
June 2007
Sept. 2007
Dec. 2007
Mar. 2008
JULY 2008
Pub. No. 3148
A
CBO
PA PE R
How Changes in the Value of the Chinese Currency Affect U.S. Imports
July 2008
The Congress of the United States O Congressional Budget Office
Preface
his Congressional Budget Office (CBO) paper discusses factors that would limit the benefit to U.S. manufacturers from a potential appreciation of the Chinese currency. In keeping with CBO’s mandate to provide objective, nonpartisan analysis, the report makes no recommendations. Bruce Arnold of CBO’s Microeconomic Studies Division wrote the paper under the supervision of Joseph Kile and David Moore. Inside CBO, William Randolph provided valuable guidance at several points in the development of the project, and David Brauer, Justin Falk, Juann Hung, Jonathan Huntley, and Mark Lasky reviewed various drafts. Outside CBO, Judith Dean, Michael Ferrantino, and Zhi Wang, staff of the U.S. International Trade Commission, and Morris Goldstein at the Peterson Institute for International Economics provided comments. (The assistance of external reviewers implies no responsibility for the final product, which rests solely with CBO.) Leah Mazade edited the paper, and Sherry Snyder proofread it. Maureen Costantino designed the cover and prepared the paper for publication. Lenny Skutnik printed copies of the paper, Linda Schimmel handled the print distribution, and Simone Thomas produced the electronic version for CBO’s Web site (www.cbo.gov).
T
Peter R. Orszag Director July 2008
Contents
Introduction and