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Why is control of the renminbi controversial?. Pei-ling liu Nilar thein Arturo Peguero. Outline. Current Situation Why RMB devaluated Conclusion. Current situation. 1 USD = 6.162 RMB. Current situation. Fluctuation History. EFFECTS OF CONTROL. POSITIVE EXPORTS UNEMPLOYMENT RATE

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why is control of the renminbi controversial
Why is control of the renminbi controversial?

Pei-ling liu

Nilar thein

Arturo Peguero

outline
Outline
  • Current Situation
  • Why RMB devaluated
  • Conclusion
current situation
Current situation
  • 1 USD = 6.162 RMB
current situation1
Current situation
  • Fluctuation History
effects of control
EFFECTS OF CONTROL

POSITIVE

  • EXPORTS
  • UNEMPLOYMENT RATE
  • GROWTH RATE
  • NEGATIVE
  • INTERNATIONAL PRESSURES
  • NOT FOR DOMESTIC ECONOMY REFORM
  • RMB INTERNALIZATION
  • EXPECTATION
source of controversy
Source of controversy
  • Forcefully keeping RMB undervalued
  • Countries argue it gives China an unfair advantage in exports against countries with free floating currencies
  • Unfair Increased competitiveness (Cheap) of Chinese products in international markets
letting go
Letting go
  • Appreciation of RMB:
  • Good for domestic economy reform:
    • Domestic Consumption
    • Growth Rate
  • RMB internalization
reasons to let go
REASONS TO LET GO
  • Economy reform
  • Stable society
  • Environment protection
reasons to let go1
REASONS TO LET GO
  • Avoid Future Crashes
  • RMB Undervalued
    • Balassa-Samuelson Relationship (economic theory)
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