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.

[ComradeRed]

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.

Revaluing a currency means allowing the price to float on the free market, based on trade and speculation (so the higher the demand for RMB goes, the more it will be worth). There are good arguments on both sides. Basically, if China revaluates its currency, the trade deficit with the United States will shrink, because, as more people buy Chinese goods, the demand for RMB goes up, but this also drivers the price of RMB up, which makes Chinsee goods more expensive, discouraging more people from buying them. So a floating currency basically prevents massive trade imbalances. The disadvantage is the risk of speculation, of course.