Rising Yuan Won't Help Jobless Americans

DailyFinance:

The dollar value of the Chinese yuan was at its highest level since the early 1990s on Monday as the Beijing government continued to allow its currency to slowly appreciate. But hopes that the new policy would result in a dramatically different trade picture -- slowing exports to the U.S. and helping to create American jobs -- are unlikely to be realized.

Read the whole story: DailyFinance

Comments

[Ron1951]

08:04 PM on 07/13/2010

First, the Chinese are facing their own bubbles in real estate and banking, so they are not going to let the RMB appreciate too much.

Second, we are in no position to press them too hard re their currency lest they take their money and go home.

Third, most jobs lost in manufacturing are not coming back to the U.S. They will move to other countries where costs are low. The furniture industry is a relevant example. They moved all their wood furniture production to Asian factories, laid off their workers, sold off their equipment, and became merchandisers/distributors. To move their production back to the U.S. would mean sizeable investments in equipment and training workers to use the newest equipment. This is just not going to happen.

[mike72]

04:34 AM on 07/15/2010

Everybody knows it. The Congress knows it. But they still want to have pressure on Yuan for one main reason: if you don't keep on lending us money, we will keep pressuring you on the Yuan appreciation issue.

And that is exactly what China has been doing, keep lending money to US by buying off the T-bills.

It is basically a backmail. Of course everyone pretends it is a trade balance issue while it is really not. It is "drug addict" issue. The drug is money, free, easy flowing credits to keep everyone placaded.

[mamababa]

05:07 PM on 07/13/2010

Bahahahahaaa-once the rate goes up high enough and jobs still don't come back, fooktards here will have to find another whipping boy to blame their shiftlessness on while manufacturing just moves to another cheaper place.

Put the blame where it belongs, people - it's what American businesses, as a culture, think is fair value of labour versus capital, along with its relationship to profit.

[pastgone]

03:27 PM on 07/13/2010

Here's a headline that says "Rising Yuan Won't Help Jobless Americans" that immediately refers you to a completely one-sided opinion piece by a paid agent of the corporate oligarchy. So Huffpost is blatantly stating opinion as fact.

China has been engaging in a trade war against the US for a long time now, by keeping it's currency undervalued. Certain US retail profiteers (Wal-Mart being the prime example, but there are many others) have been raking off their share of the trade war profit bootie and using some of it to pay off our reps (and other oligarch wanna-be's like the author of this article) to look the other way and pretend there's no trade war.

But undervaluing your currency is an act of trade war, a SERIOUS act, and China's been doing it for a long time now. If the Yuan was properly valued, homegrown manufacturing would be doing a lot better. That's a fact, whatever this article's author wants to spin out of thin air.

[Ron1951]

08:06 PM on 07/13/2010

I've spent a lot of time in Asia over the years developing and buying wood furniture for American companies. When I can buy the same product at various factories in China and at various factories in Malaysia or Vietnam for the same price, where is the evidence of undervaluing their currency?

[mike72]

04:40 AM on 07/15/2010

In 2005, the Yuan is at 8.9 for one dollar. Today it is 6.7 for one dollar. It is close to 30% increase.

Has US gained ANY jobs back?

Most of the exports from China to US is by international corporations who gut out the manufactoring bases in US and moved to China.

It is not a trade issue. It is a fundamental problem with US outsourcing its manufactoring BASES to third world nations FOR WIDER PROFIT. Your enemy is in Wall St.

[Erdgeist]

02:45 PM on 07/13/2010

Whatever we do with China it should be in our own best interest -- not China's. From 2001 to 2008, 2.4 million U.S. jobs were lost because of China. The biggest losses were in Silicon valley. China, in other words, is stealing the U.S. tech sector. The main culprit in the great Chinse ripoff is currency misalignment.

Source: http://www.economicpopulist.org/content/24-million-jobs-lost-due-china-2001-2008

[mike72]

04:43 AM on 07/15/2010

I completely disagree with you. If your assertion is correct, how can you explain the fact that over 5 years the Yuan has increase by 30% in value against the dollar yet the trade imbalance is actually wider.

It is more to do with Wall St. sysmatically moving the manufactoring bases to third world nations, including China.

Your jobs are not coming back until you solve the root of the problem at home.

[Tom95134]

02:34 PM on 07/13/2010

This is a great trick by the Chinese. They are using the approach of gradually raining the temperature of the water (raising the value of the Yuan) until the frog cooks. This keeps us from jumping out of the Chinese manufacturing pot and back into manufacturing in the U.S.

[mike72]

04:45 AM on 07/15/2010

There is no manufactoring in US anymore. That is a false premise to begin with. But it will certainly make you feel good though, that once day the jobs will come back.

They won't unless you address the sysmatic problem of Wall St gutting out manufactoring bases in US and shipped them to third world nations for WIDER PROFIT.

[jumperpin]

01:27 PM on 07/13/2010

No one's really surprised. As long as the multi-nationals, hiding behind sub-sub-sub contracting enjoy the fruits of exploited labor from Asia's bowels, all is well to their lapdog trade press.

[BBackSoon]

12:50 PM on 07/13/2010

Until the US implements a real trade policy nothing will change.

Small Tariffs on ALL good coming into the states would make it more economic to produce some things in the states once again.

[JNarragansett]

12:49 PM on 07/13/2010

Surprised that you posted a link to this. Normally this is a soap box for the Campaign for America's Future where they tell us that if we increase prices for consumers enough by engaging in protectionist trade policies, then China will have to appreciate its currency and jobs will come back.

Acknowledging that an appreciating renminbi does not mean more jobs for Americans ruins the justification to use the government to protect the backers of Campaign for America's Future with tariffs.

[judiNJ]

11:31 AM on 07/13/2010

Well, I wonder who has the guts to call to bring all the jobs lost to offshore back to the USA. Compared with the American workplace before the late 70s on, we are a barren, barren country that just doesn't make anything now. All we do is move money around.... and I wonder when THAT will be sent to China or India.