After reading Johnson Kim’s Bolg about the introduction of a new legislation inU.S. to add higher duties on Chinese product as a fight back to the continuing devalued Chinese currency. I have few commons to say.

U.S.parliament thought Chinese government devalues Yuan on purpose, which results in a big trade deficit forU.S.and causing lost in job opportunities. However according the data the exchange rate of Yuan has kept increasing, which means Yuan has been rising in value since 1994. So why doesAmericaannounce it as devalued? That is because the value of Yuan today is much different than it used to be.

Following figure shows the inflation rate inChinafrom 1980 to 2008, and the inflation rate in 2009 and 2010 is 15.4 and 3.3 respectively. It is easy to tell that Chinese inflation rate kept increasing. In other words we can say Chinese currency is devaluating. The same amount of money today cannot buy equal amount of goods it used to buy. That’s the reason whyU.S.says Yuan is devaluated for a long period of time.  

Resources: http://zhidao.baidu.com/question/252628817.html

         http://wenku.baidu.com/view/55a78fd149649b6648d74726.html

         http://www.forecasts.org/data/data/EXCHUS.htm