Why is control of the renminbi controversial
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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)