china Options

[innovation]

how much of a "threat" is the newly powerful china? what policy should america develop toward the nation?

also...
can someone explain to me the implications of "revaluating" currency?
why do so many people want china to "revaluate" the yuan? thanks.

[illumineering]

Internationally, the value of the yuan is relatively low, about 8.3 to 1 US dollar. That means it's cheaper to produce goods in China than it is in the US or Europe. With low interest rates, and stable value, that will increase consumer spending in China. For a nation that had traditionally purchased more goods than it has sold, that is a positive change from the Chinese perspective.

This condition will begin to change the traditional trade imbalance because the low yuan value will encourage the purchase of Chinese goods by other nations. This is an overall boost to an economy that has never been able to influence international markets. The stable and consistent value of the yuan and low inflation can encourage an influx of capital investment and jobs as well. (for the Chinese)

From the European and US perspectives, they cannot compete with this advantage that China now has. The easiest way to do it is to change the value of the currency so it more in line with the euro and dollar, thus making the cots of goods more even.

The "threat" can be summarized as being China can radically influence economic and trade policy, draw new investments in infrastructure, attract jobs from other countries and become a major global power.