China Economy Essay

1130 words - 5 pages

A New Option
There is one, directly monetary, measure that the United States should contemplate taking against China: direct purchases of renminbi to counter China’s direct purchases of dollars. It is absurd, especially from a US national perspective but also from the standpoint of global financial stability, that other countries set the exchange rate of the dollar. This is a consequence of the international role of the dollar, one of several of which lead me to question whether that role remains in the national interest of the United States.
In principle there could be little objection to such “countervailing currency intervention” against manipulation by another country that was keeping ...view middle of the document...

Hence the United States would have to identify proxy assets and buy them instead. Candidates would include nondeliverable forward (NDF) contracts for renminbi and renminbi-denominated securities in Hong Kong. The magnitude of such interventions by the United States would be limited by the size of the relevant markets and thus to far less than the daily purchases of dollars by the Chinese authorities. But such an initiative by the United States would clearly indicate the seriousness of its concern over the misalignment of the renminbi, provide an unmistakable and indeed dramatic signal to the markets themselves, and add further to the pressure on China to cooperate.
There is nothing in US law or the IMF Articles of Agreement that would prohibit the United States from undertaking such “countervailing currency intervention” today. However, the Congress might want to consider amending the relevant portion (Section 3004) of the Omnibus Trade and Competitiveness Act of 1988 to authorize Treasury to conduct countervailing currency intervention operations whenever it determines that a country is manipulating its exchange rate to gain an unfair competitive advantage. Such an authority would greatly strengthen the hand of the Treasury in conducting the negotiations to remedy an unfair currency practice as called for under the Act. A version of the idea is included in S.1254 and S.3134, proposed by Senators Schumer and Graham.
The exchange rate is of course an inherently international issue because it involves at least the two countries between whose currencies it provides a price. Hence the use of countervailing currency intervention by the United States, or by any other country, should be subject to review by the IMF. Any country that believed it was being unfairly challenged by such a policy should be able to appeal to the Fund, and the countervailing country should be required to desist if its justification for the action was found to be inconsistent with the objectives and rules of that institution. This would parallel the treatment of countervailing duties by the WTO, described above, under which target countries can win disapproval of the countervailing action if they can demonstrate that their alleged subsidies are in fact not actionable under the rules of the institution.
The United States would be in a strong position to defend itself against any such protest from China, however. The IMF Guidelines for Exchange Rate Policies call on member countries to “take into account in their intervention policies...

Other Essays Like China Economy

It Is Late to Enter China

915 words - 4 pages Critique Paper INTRODUCTION Is it too late to enter China by Edward Tse the Chairman of Booz & Company, Greater China and the author of the China Strategy: Harnessing the Power of the World’s Fastest-Growing Economy? China is a tough market and the competitors may have gotten their first by the biggest mistake would be choosing not to invest in China by Edward Tse. Summary of article While many other countries have slipped into an economic

Us Trade with China Policies Essay

2118 words - 9 pages income peoples to improve their quality of life, and jobs have increased within companies selling goods imported from China; however, unemployment has increased as industries which support the American economy and way of life go out of business. Despite any advantages, dependence on and debt to China is seriously and unwisely reverting control of the US economy to China. Proposition: Trade and corporate business dealings with China should be

Global and Chinese Biomolecular Interaction Analysis Industry, Size, Share, Analysis, 2009 Forecast 2019

625 words - 3 pages 2014-2019 China Import and Export of Biomolecular Interaction Analysis Chapter Seven Analysis of Biomolecular Interaction Analysis Industry Chain 7.1 Industry Chain Structure 7.2 Upstream Raw Materials 7.3 Downstream Industry Chapter Eight Global and China Economic Impact on Biomolecular Interaction Analysis Industry 8.1 Analysis of Global and China Economy 8.2 Global and China Economy Trend 8.3 Effect to Biomolecular Interaction

The United States And China: A GrowingTrade Imbalance

1704 words - 7 pages , and other expenses. Sensible policies on taxation, energy, education, infrastructure, trade, investments, and innovation will do far more to keep us competitive than trying to isolate ourselves from China and the international economy. Works Cited urrency Revaluation. (2009). Retrieved from U.S.-China Media Brief: http://www.aasc.ucla.edu China and the US Economy. (2011, April). Retrieved March 10, 2012, from The US-China Business

Analyse The Impact Of Globalisation On An Economy Other Than Australia

1263 words - 6 pages China has a unique and unusual economy. The country runs under a split economy, where it is partially communist, and partially free-market. The recent emergence of China as one of the world's major economic powers is resulting in greater regional integration in East-Asia, and the world. Its integration within the economy has indicated a tremendous move toward Globalisation, and the removal of the barriers that have previously surrounded the

Aging Problem in China

602 words - 3 pages China would move from a vast supply of low-cost workers to a labor shortage economy, it could quickly lose its competitive edge to other emerging economies that still enjoy significant demographic dividends.”(Yanzhou Huang) “According to an OECD report, China will be surpassed by both India and Indonesia in terms of economic growth rate after 2020” Second, China’s workforce shrank in 2012 for the first time in decades (Charles Riley). And this

Business Culture and Strategy

2417 words - 10 pages principles of the organization. The mission of China Telecom is “Sharing the Best of This Information Age”, which not only indicates the aim to keep up-to-date with the internationally advanced level in the background of economy globalization, but to realize sustainable and healthy development. The deeply meanings of this mission are “Sharing” “Information civilization” “Keeping pace with the world”. China Telecom excise a solemn promise

China's Growth

684 words - 3 pages The global economy consists of all countries in the world at different stages of economic development that produce goods and services and contribute to the world GDP. The global economy is divided into four categories of countries AIE’s, NIE’s, LDC’s and TEC’s. Collectively the GWP IS $61 trillion. The most impressive growth has been china. China has generated impressive 8-10% GDP in the last 10 years while reducing poverty however this has come

Marketing on China's Economy

1067 words - 5 pages Marketing 5000 MBN Exercise 1: Estimating Market Demand Aaron Binder China and its Growing Economy China is the most populous country in the world with approximately 1.35 billion people and is still exhibiting signs of population growth (The World Factbook, 2013). To go along with the large population size, China is also one of the fastest growing economies. The average median income throughout China has increased dramatically in recent

Global Cultural Analysis

5210 words - 21 pages locals conducting business in China, how do both of the above items compare with US culture and business and what are the implications for US businesses that wish to conduct business in China. The answers to these questions can be utilized to further define China’s standing in the today’s global economy from a cultural point of view. Introduction The People’s Republic of China (PRC) in most recent years has made its

The Forgotten Legacy of China as a Great Ally

1285 words - 6 pages population faced a toll of 14 million or more deaths. Around 80 million of those who did not die became refugees, shockingly higher amounts of death and disorder than what the United States or Britain saw. An eight-year battle against Japan on home soil had huge consequences for China’s most treasured cities, economy, and society. The shambles that China was left in immediately postwar was not promising for how China would look long-term

Related Papers

Rise Of China Economy Essay

4998 words - 20 pages Foreign Policy Research Institute FOOTNOTES Vol. 16, No. 06 The Newsletter of FPRI’s Wachman Center June 2011 THE RISE OF CHINA’S ECONOMY By Thomas G. Rawski Thomas G. Rawski, Professor of Economics and History, joined the University of Pittsburgh's faculty in 1985 after fourteen years at the University of Toronto. His research focuses on the nature and implications of recent developments and long-term changes in the economy of China. He

Economy Of China, China Between The Fall Of The Kmt And Mao Tse Tung's Death

455 words - 2 pages The time from 1949-1976 was a time of transition for China. Many social andeconomic changes occurred through this period. When the Kuomintang governmentcollapsed and Mao Tse-Tung assumed control, this marked the beginning of massivereformation for what would become the People's Republic.With Mao Tse-Tung's rule came governmental reform which led to socialbetterment. His first years of rule included careful development and reorganizationbacked by

Outsourcing To Mexico Essay

661 words - 3 pages China, n.d.). There are also disadvantages to outsourcing in China. China is a communist government and is very prone to piracy and counterfeiting. There is a lot of internet hacking that is a cause of concern when outsourcing to China. China is also a growing economy because of the outsourcing and we all know with growth comes the demand for higher wages and better benefits. This, of course, contradicts the entire point of outsourcing to

Debate Notes Essay

690 words - 3 pages much money by buying their goods, China will continue to invest into the US Economy so that we continue to buy their goods. Worst case would be that China begins to invest less into the US Economy because we are not buying as many of their goods, however that would mean that the trade deficit would diminish. -more purchasing power because cheap products -can’t just look at china, but rather entire deficit, such a small factor -no possible