RMB Going Up = Disastrous Consequences?
Would a further revaluation of the RMB by 5% have disastrous consequences? Apparently, some high level Chinese officials think so.
It seems such a change would be too small to have “disastrous consequences”, but at least in the short term, it would have a negative effect on China and the US consumer. What do you think?
The following short article was translated from Chinese to English out of Modern Weekly:
The RMB Increasing in Value 5% Would Have Disastrous Consequences
Fan Gang, a member of China People’s Bank’s currency policy committee, published an article in The Wall Street Journal which states that current global economic imbalances stem from the US Treasury indiscriminately creating massive amounts of dollars. He says that if the RMB were to increase in value [relative to the US Dollar] by 5%, millions of citizen workers would lose their jobs in China. Poor Chinese people should not be sacrificed to correct a mistake made by America. This is the first time an upper level Chinese government official has published an article in the mainstream political economic media arguing the case for the Chinese currency.