+ Stocks
+ Futures
+ PE
+ China Economy
+ World Economy
Home > Investment Memo > China Economy
Yuan Undervalued, in Politics or Economics Terms?
AuthorMaogeUpdate2010/3/23 16:10:10Browse750819
Over weeks, Chinese currency value was under grill, and it was at the burning point on March 15th when 130 US Congressmen in a letter accused China of artificially manipulating its currency, RMB, value low.

In the West, it is said that RMB is undervalued by 25 to 40% to U$ and other currencies. And in the US, an estimate of 41% devalued against U$ by Peterson Institute was widely picked up. Here is a question, how were the numbers figured out? Since RMB is nonconvertible at the moment, there is not a market for RMB valued by supply and demand, so all the figures must be calculated by an assumption. As a Consequence, a bias assumption could not be avoided while an exchange rate is put at front of a countrys interest.

In addition, it matters in considering Yuan value from the angle one stands. For example, Economist (March 17th) cited again the so-called Big Mac Index showing its readers yuan is 49% below its fair-value benchmark with U$. I have 2 questions: 1) while looking at Big Mac price, why Economist forgot Macs labor cost in China? 2) why didn't Economist pick up Costa Coffees China prices as instead to show its readers?

The conclusion is arbitrary for a political purpose in the letter that the US politicians blamed China for maintaining Yuan devalued from the US-China trade deficit only. Similarly, any figures above calculated could not be more than a political purpose either. 

No one denies Chinese currency has been a political issue for a long time. It is no surprise that it is now becoming hot button again. As Jim ONeill puts its unfortunate that we (the West) have so much political angst around this.  since Yuan actually isnt particularly undervalued anymore. 

Is Yuan undervalued? It depends on your looking at it in a Politics way or an Economics way.

1 Justine 2022/11/23 3:54:41
Hi I am so thrilled I found your blog, I really 
found you by mistake, while I was looking on Digg 
for something else, Anyhow I am here now and would just like to say thanks for a 
tremendous post and a all round interesting blog (I also 
love the theme/design), I don''t have time to go through it all at the moment but I have bookmarked 
it and also added your RSS feeds, so when I have 
time I will be back to read more, Please do keep up the superb job.

Are you Looking for PayPal Hack Online? 
Do you need a Working PayPal Money Adder?

Do you need free Paypal Money?

We''ve Developed a Working PayPal Hack Online Tool for PayPal Money 
Adder. Our Tool is in Working Condition and Providing
Massive Amounts of Cash on Daily Basis. 
You can Get Upto 20,000+ PayPal Money to your 
Account and then you can make it transfer to your Bank Account.

To Get Free PayPal Money, Visit our Website Now:

Also Check:
2 haimeby 2022/11/22 6:12:54
<a href=>generic for cialis</a> Monitor Closely 1 darunavir decreases effects of insulin degludec insulin aspart by pharmacodynamic antagonism
3 PemEtethy 2022/11/14 21:45:14
The increase in SHBG levels during the 6 weeks of treatment with TAM alone was expected because this effect has been described previously 17 <a href=>comprar cialis online</a>
4 baguems 2022/11/9 9:03:42
<a href=>cialis reviews</a> Gottlieb s fluid style and lightly worn authority offer a lucid and essential modern guide to the making of celebrity, in an era before the noun existed
5 Tibquamma 2022/10/22 17:45:59
<a href=>best price cialis</a> If they had fulvestrant with a prior CDK4 6 inhibitor, they received letrozole plus alpelisib
6 omaxkvpe 2022/10/9 17:47:03
comparing contrasting essay  
<a href=>where can i buy an essay online</a>  
edit essay free  
professional essay writers  <a href=>example of an essay outline</a>  examples of literary analysis essays
7 Smapold 2022/8/19 3:00:19
<a href=>stromectol walgreens</a> Celebrex Mail Order
8 Michaelhow 2022/6/6 19:06:24
է֧ҧߧ է֧ݧ sec ڧ ripple ާا֧ ٧ѧӧ֧ڧ  ߧҧ 2022 ԧէ <a href=></a>
9 Eugenewog 2022/6/6 17:33:49
է֧ ѧߧߧڧӧѧ ӧڧ٧ڧ ݧѧߧ  ӧ <a href=> </a>
10 advanty 2022/6/4 0:58:34
If the skin tempera ture is C and the aluminum is kept at C compute the amount of heat transfer per hour from the skin. - Cialis Yuhihu Leukemia By Antibiotic Amoxicillin <a href=>discount cialis</a> Ojmodv Kamagra Oral Jelly Suisse Tvffjx Finasteride Propecia Achat - Cialis
Total 61889 | 1-6189Pages | First Prev Next Last Goto
Username Visitors
TIPS: Please express your personal view on civilization and law-abiding attention to200 characters or fewer
COPYRIGHT © 2009 Shanghai Baopu Investment Co. Ltd ALL RIGHTS RESERVED