blogs.ubc.ca/bengeorge

Recently, Chinese Premier Wen Jiabao announced plans to make the Yuan (Chinese currency) more flexible. Wen also stated that maintaining bilateral trade between the United States and China is a necessity for the world. Due to a large majority of American debt currently owned by China, it is impossible for America to simply restrict trade between the two countries. 

This move does not come as a suprise to the world, seeing as the United States have repeatedly accused the Chinese government of artificially reducing the value of their currency, so as to reduce the cost of manufacturing goods in China. This results in cheaper goods, and lost American jobs – or so they say.

China has experienced a 12% increase in the value of their currency due to appreciation and inflation this past year. No longer the cheapest place on the block, China does not need to put up with accusations from other countries.

Perhaps, it is time for American’s to look at rewriting their own policies to handle financial internal problem instead of placing the blame on others.

The Washington Post – China says U.S. policy, not undervalued currency, to blame for economic woes