StudentShare solutions
Triangle menu

Yuan Revaluation: Its Impact on the Economy of China and U.S - Coursework Example

Not dowloaded yet

Extract of sample
Yuan Revaluation: Its Impact on the Economy of China and U.S

It is more important to recognize that the Chinese government should avoid repeating the mistakes brought about by the appreciation of the Yen.

Over all, the RMB exchange rate reform for more than three years was successful. First of all, the renminbi exchange rate flexibility is constantly enhanced by releasing the pressure of RMB appreciation and second, the operation of the exchange rate reform is under control. The exchange rate reform of RMB appreciation through China's influence is a theory transformed into reality. Meanwhile, the main economic sectors are influenced by the appreciation of the renminbi or the RMB exchange rate reform.

It was in July 2005 that China announced a move that would have major implications on the global economy: it was revaluing the Yuan. Since then, economists, analysts and businessmen have wondered how much impact the Yuan revaluation would cause. Would it cure the seemingly infectious diseases of the global market or would it finally give the world economy a slow and painful death

For a long time now, China's effect on the world market has been undeniably noticeable. The big nation's influence has surpassed the prejudice of only producing cheap goods and labor. Now, it has a say to the price of capital, services, goods and other assets.
Moreover, it has not only brought effects upon the global stage but also on the smaller scale economies of other countries. For example, it has contributed to America's debit by putting out great amounts of export products. For most critics, the global monetary policy has been controlled by the Chinese and not the Americans.
It was in 2004 that the price of oil doubled, the difference only being is that inflation rates did not spike up and cause a big demise in the economy, allegedly because of China's doing. This was because China caused the oil prices to jump after their previous demand for it. However, job pays and inflation remained low after countries got scared of the competition that the "sleeping giant" brought upon them.
Also, the famous ability of the said country to produce cheaply kept world prices and wage rates at certain minimum. Since China was a factor in reducing inflation, major banks were able to keep interest rates lower than they usually should have been. Also, with the presence of low interest rates, most borrowers were encouraged to get loans which were bigger than the usual.
Such occurrences led into a great investments flowing into assets, specifically to realty. Back then, American bond yields were low even if economic growth was steadily increasing and government borrowing was also done in big amounts. These were all brought about by China's actions of buying great quantities of American treasury bonds in order to hold down the Yuan. China's central bank also supported the US mortgage businesses by buying out its securities.
Now that the United States has started to recess, the growth of the market has no choice but to rely on the powerful China.
This isn't going to be as easy it looks though.
With this great of a challenge facing their beloved economy pace-dictating country, Chinese power players must think of ways to handle the social, economic and political consequences. And now that China is causing inflation ...Show more

Summary

China's currency is generally known as the renminbi (RMB) while the unit of measurement is the Yuan (terminology that parallels "dollar" in the U.S. (USD). The RMB exchange rate reform is closely related with the appreciation of the said currency…
Author : cicerobogisich
Yuan Revaluation: Its Impact on the Economy of China and U.S essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the coursework on your topic
"Yuan Revaluation: Its Impact on the Economy of China and U.S"
with a personal 20% discount.
Grab the best paper

Related Essays

China history questions
There are a huge variety of reasons for this trend in history. One is that China is relatively contiguous, featuring few major geographic boundaries that would form distinct provinces able to distance or defend themselves from each other, and yet is also relatively isolated from the rest of the world, with the Gobi Desert and the Mongolian highlands to the west, the Himalayas to the south west, tundra to the north, and only minor tropical kingdoms to the south east, not to mention the pacific ocean on the east.
16 pages (4000 words) Coursework
The Economy and the Impact on Students, Parents and Colleges
According to the paper one of the questions that arises in the minds of the people is related to the fact that why does the employees with college degrees tend to earn higher in comparison to those without college degrees. By comprehending how education as well as training interacts with the economy, people can easily realize the reasons behind the success of a few workers while the failure of certain others.
11 pages (2750 words) Coursework
The role of ombudsman in ADR and its impact on sovereign government
The commonly held notion of Ombudsmen is that of a person who, outside the usual legal framework, acts on behalf of individuals or groups with little or no access to legal or administrative recourse.The ombudsman in this context acts as their legal agent and negotiator in settling grievances against a government or other public agencies, private companies and institutions.
16 pages (4000 words) Coursework
Discuss the Impact of International trade or Inward FDI on economic growth or development in an Emerging Economy
Keeping record of statistical data regarding FDI is a must for making policies and analyzing economies. The need for comparable, comprehensive and updated data on FDI is increasing as it is assumed to be an important factor for the internationalization of various economic activities.
10 pages (2500 words) Coursework
The anti-terrorism law in the U.K. and its overall impact
The threat of terrorism has reshaped the world. It is a huge phenomenon that has affected everything from the lives of the people to the laws governing the people. Every government in the world has responded to the threat of terrorism and done its utmost to design laws and strategies that would ensure the safety of its citizens.
6 pages (1500 words) Coursework
Merger and Acquisition in China
The significance of this study is twofold. First, the advantages of the merger and acquisition activity in China will be identified, as there has been a growing trend in the prevalence of mergers and acquisitions all over the world, especially in developing economies like China (Finkelstein 1999).
28 pages (7000 words) Coursework
China and Monetary Policy
In 2005, China attracted 18 percent of the US$334bn total FDI flowing into the developing economies (UNCTAD, 2006). Over the past two decades, there have been significant changes in the sectoral distribution of FDI in China. In the early 1980s, a large part of FDI in China was directed to geological prospecting, real estate and tourism.
40 pages (10000 words) Coursework
China
China’s isolation resulted to declines in trade and eventual economic stagnation. At the beginning of the 20th Century, China was still getting nowhere. In fact, constant domestic conflict hampered economic growth and pushed China deeper into poverty.
2 pages (500 words) Coursework
China Economy
The country itself has a large internal market and given that its produce is becoming more export oriented, it is a good indicator of economic growth. Growth in inward FDI indicates economic development in China. A country
4 pages (1000 words) Coursework
Monetary policy in china
The financial system of China is highly developed. But china has experienced a slow economic growth in the 1st quarter of 2015. The government is required to adopt adequate measures restricting the further fall in the growth rate of the economy. But despite
6 pages (1500 words) Coursework
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation