Comments on: How does China Manipulate its Currency?

By: terry

terry — Fri, 02 Jul 2010 15:35:42 +0000

But aren’t the Chinese using many of these dollars to purchase US debt?

By: Alternative Energy Supply

Alternative Energy Supply — Mon, 28 Jun 2010 04:24:17 +0000

Makes perfect sense. However, I don’t see them being undervalued as an advantage. It means that their money is worth less. They have less buying power. In the short run, yes, an exchange rate change means they lose that 20 Yuans. But in reality, they should be raising their prices as their currency gains power. So they will make the same money, but we will have to pay more for it. That’s the problem with having less power in currency. When China buys from us, they are paying a lot of money for goods. When we buy from them, we get a killer deal. To me, the Chinese are the ones who are losing out by keeping their currency so low.

I guess what matters is what you’re trying to do. They just want to keep their exports going, so they don’t mind making less. We want to stop from importing so much, so we want their rate to go up. But things are still cheaper when made there, so the exchange rate change isn’t going to solve our problem. It will eliminate some exports, but not the majority of them. The US still doesn’t manufacture a lot of things and we must source out of the country to get them. The good news is clothing might stop coming from China, which should be made here!

By: beth

beth — Mon, 01 Mar 2010 02:09:29 +0000

Thanx,
I have a test in ecp geo monday n my profeesor is like Buller’s. Anyone anyone…. thanx again, makes sense now. very organized

By: Alexx

Alexx — Thu, 18 Feb 2010 14:15:43 +0000

Hi,

Thanks for the article! It was very enlightening. Your misuse of hyphens was rather irritating, though. A hyphen should only be used – for example, like this – when the bit inside the hyphens can be removed completely from the sentence without removing the meaning of the sentence. And it should never be placed randomly in the middle of a sentence.

By: Kunal

Kunal — Sun, 17 Jan 2010 02:51:34 +0000

Thanks for explaining it in a simple and lucid manner. No matter how much I read about currencies and foreign markets I find it difficult to understand. Is there any book you guys referred to when studying MBA finance which makes it easier to understand ?

By: Alex

Alex — Sun, 10 Jan 2010 22:28:33 +0000

I always thought the Chinese government buys and sell the Chinese currency (Yuen) to control its currency, and no doubt, I was wrong.

Thank you for clarify this for me

By: Manshu

Manshu — Thu, 12 Feb 2009 23:16:21 +0000

Thanks Hank, it will be interesting to see how this plays out.

By: Hank

Hank — Thu, 12 Feb 2009 22:39:18 +0000

Great post! You really laid it all out there for us. Thanks!

By: Manshu

Manshu — Thu, 29 Jan 2009 21:23:06 +0000

Well, Biplab, I guess it can’t be that hard to buy dollars when you make everything in the world!

By: Biplab Das

Biplab Das — Thu, 29 Jan 2009 10:11:57 +0000

I read about this in Lee Iacocca auto biography also. This has been going on for say last 60 years. How they (chinese central bank) are able to manage it?