1 / 15

China’s Currency Manipulation and the Effect on the United States

China’s Currency Manipulation and the Effect on the United States. Derek Griest, Fraser Hunt, & Alka Shah. Stuck on U SA. Essentially 1994 (1997 officially) until July 2005, it was pegged strictly to the dollar at about 8.28 Yuan to the dollar.

whitney
Download Presentation

China’s Currency Manipulation and the Effect on the United States

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. China’s Currency Manipulation and the Effect on the United States Derek Griest, Fraser Hunt, & Alka Shah

  2. Stuck onUSA • Essentially 1994 (1997 officially) until • July 2005, it was pegged strictly to the • dollar at about 8.28 Yuan to the dollar • Still believed to be vastly undervalued • Now adjusted nightly by Zhou • Xiaochuan according to basket of • currencies • Appreciated slightly since July 2005 • Accused of being currency manipulator

  3. Value of the Yuan Against the Dollar Over Past 2 Years

  4. Deficit • Overall U.S. Deficit $726 billion of 2005 • Deficit of $201.6 billion with China for 2005 • Almost 25% • Due to the low currency rate of Yuan, we can import from them cheaply and exports are expensive for us.

  5. Reinvest • China reinvests in the US economy • Feel that we are not going to default, though growing worried • Bonds and foreign reserves • Keeps our inflation low Deficit Reinvestments Bonds, Equities etc.

  6. M.A.F.D. • Mutually Assured Destruction, now • known as MAD 2 or MAFD • (Mutually Assured Financial Destruction) • If China stops investing then the likely • results are bad for them; world • US refusing to hone deficit and trying to • hold it over China’s head

  7. Jobless • Due to cheap imports, there has been a loss of manufacturing which put people out of jobs, especially the textile industry.

  8. Protectionism • U.S. wants to add duties 27.5% on Chinese imports until China allows its currency to float more freely against the dollar • To decrease bilateral trade deficit with China • Believed that effect could be minimal due to other countries • China feels prices are lower in U.S., therefore refuses to change currency policy

More Related