Recently, the Chinese government has grown concerned about attempts by the U.S. government to pass a currency bill, which would force Beijing to raise the value of its currency. Critics of Chinese export subsidy polices say that undervaluing the Chinese Yuan has given Chinese exporters an unfair advantage. As a result of this, many American jobs were lost because businesses were unable to keep up with the Chinese competition. Fearing that the bill would pass in the U.S. government, the Chinese government responded with threats of a potential trade war with the U.S.

Washington believes that, by passing this bill, the unemployment rate will decrease. However, I believe the result would be different, as America still faces competition with other giant exporting countries like India. With the bill passed, the Chinese economy could be severely affected due to the rapid inflation of its currency and potential trade war is at stake. The Xinhua News Agency has mentioned that, by raising concern towards this issue, U.S. politicians might by drawing the public’s attention away from domestic problems. I believe this is a valid point considering that the U.S. is struggling with its economy.

Sources: Globe and Mail             Picture