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. Pro-Higer Yuan, Anti-Hi Yuan
. Pro-Pressuring China, Anti-Pressuring China.
. Congress Bill : Protectionist
. Strength of China Trade Surplus is not reflected in the exchange rate.
. US buys more than it sells to China
. Unequal trading partners.
. I buy more from you than you from me.
. You make more from me than I from you.
. And you are making your currency cheaper so my people can buy from you more.
. Not fair !
. However pressuring China may have retaliatory effect
. However raising Yuan may work in China favor as well,
. As it can then buy US assets cheaper.
. Although it means their US denominated assets will also devalue.
. Higher Yuan is good for China based companies
. As far as trade is concern,
. Some favor higher Yuan to stem the flow of imports.
. As a means to reduce the Trade deficits .
. US then should discourage imports domestically.
. Encouraging US citizens to consume less.
. Go back to savings mode
http://www.reuters.com/article/2011/06/24/businesspro-us-usa-china-currency-idUSTRE75N5JE20110624
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