Bernanke to China

Bernanke Says China Should Loosen Yuan Curbs to Fight Inflation

26 Responses to “Bernanke to China”

  1. 1 Shauna Mackenzie April 15, 2010 at 2:00 PM

    I wish I understood the ins and outs of this topic more clearly. It seems to me though that our opinion of what they should do with their currency is a moot comment. Don’t we have a huge debt to the Chinese? It doesn’t seem to me we’re ina place of financial dictation.

    Bernanke argues that it would grow their domestic market(s) but I wonder if the pain it would suffer in exports outweighs the advantage of the domestic market? Maybe I’m way off base in my logic – I’d love to kno what you think, Prof. Balassi?

  2. 2 Christopher Henderson April 18, 2010 at 12:52 PM

    Wouldn’t we want the yuan to stay low against the dollar? As Shauna pointed out, don’t we have a large debt to the Chinese? If they strengthen the yuan wouldn’t that mean we would owe them more? Maybe I’m also a bit unclear. But I agree with Obama that there should be fairness within trade. That’s the whole premise of fair trade in the agricultural business. For instance, in the produce store where I work, we sell fair trade bananas which means we pay the growers in Mexico the same price we charge for them in our store so that trade is fair and no one is taken advantage of due to a difference in currency value.

  3. 3 Matt Cardoza April 18, 2010 at 12:53 PM

    I agree with the article in saying that China should use or be more flexible to currency exchange. It would give the country more autonomy in their monetary policy. Also, it would make exchange rates and inflation decrease as well. Increasing the amount of exports would be more important than the advantage of the somestic market.

  4. 4 Anthony Azevedo April 19, 2010 at 9:57 PM

    China is controlling the trade markets. With the yuan being under valued, it makes China a stronger exporting nation. The dollar is not stronger than the yuan but with the way yuan is controlled, the dollar is stronger. China population will soon out number the USA, which mean China should be importing more items not exporting more. Population of China would live a better life by having better standard of living. I’m not sure who would have the comparative advantage but if USA dollar fall lower than the yuan then they can buy more stuff from us. This would put more people to work here until a new balance is reached.

  5. 5 Jesus Zavala April 20, 2010 at 7:53 AM

    I thought that the government wanted to U.S. dollar to be stronger than China’s currency. Apparently, the yuan is stronger since the Chinese government made it more flexible to currency exchange. Yes, this might give China an adventage in having incresed their exports, but like President Obama said, there should be a fair trade within countries.Although the yuan was undervalued and made the dollar stronger, this action helps China to export more goods that the U.S.

  6. 6 kathryn koller May 1, 2010 at 12:00 AM

    China has so much control over us and the trade markets it’s insane. I think they know what they are doing since we are in a huge debt to them. I think we should try making our dollar more flexible maybe then that would help.

  7. 7 Nhi Ho May 1, 2010 at 9:09 PM

    I hope I’m interpreting this article correctly. China is keeping the yuan undervalued to increase export. I feel that China knows what they are doing since their economy is doing so well right now. They are doing to continue improving their country’s economy.

  8. 8 Evan Schlinkert May 2, 2010 at 2:01 PM

    I agree with Kathryn it is insane how much power China has over us in the trade market. If we try and make our dollar more flexible then who knows what might happen perhaps we will see our economy start to rise like the Chinese. It just seems to me like we need to do something different then what we are doing now because what we are doing now isn’t working.

  9. 9 Kara Yamamoto May 3, 2010 at 10:03 AM

    I feel that we should want the yuan to stay low against our US dollar. I’m might be a little confused but I agree with Obama that there should be fairness in trade. Yet china has so much power over us in the trade market. But what if we made our dollar more flexible? I’m not really sure that would help the situation but at this point with our economy so low and all the budget cuts that have been happening maybe doing something different might help the economy rise.

  10. 10 Hannah Mac Dula May 3, 2010 at 9:06 PM

    Like the 130 lawmakers mentioned in the article, my dad also believes that we should increase the tariffs on Chinese exports. I fully agree with Kara. We should want the Yuan to stay low against our US dollar. As Bernanke stated, ““They should combine — it would be in their interests also to combine a more flexible exchange rate with other efforts to increase domestic demand, domestic consumption and achieve a more balanced economy”. This makes sense! It would be the best interests of both China and Yuan to combine their rates. I found this article somewhat confusing but still interesting to read about how foreign economies are faring.

  11. 11 nicholas joy May 9, 2010 at 4:27 PM

    firs thought is a asia currency something like the euro, although china probably wont want to be take down by lower economies. This to me shows the advancement of the world as more and more countries industrialize we are going to see a change of power int he world soon enough. Especially as china climbs over a billion people. The work force they have and the relaxed labor rules will soon have china passing america.

  12. 12 Hyo Kim May 10, 2010 at 8:20 AM

    Obvioulsy, the more undervaluing Chinese would be good for China’s export since it would make chinese products cheaper in other countries. The problem is, their fixed exchange rate is hurting U.S. economy. and in overall it wouldn’t good for the China either, because U.S. is their one of the main trading partner, and if the U.S. economy goes bad it would hurt their export, too. So, I think the best way of China to face this is probably invest in the U.S.

  13. 13 Nick Baumann May 11, 2010 at 7:31 PM

    I noticed a few people said that Chinese policymakers must know what they’re doing if their economy is doing so well. I think they missed the point of the article. If what Bernanke says is true, the artificially undervalued yuan is the only reason why China has continued to grow so quickly. No country should be given an unfair trade advantage like that. China’s actions will eventually come back to bite them when their undervalued currency causes some market failure. I just hope that the American economy does not get hurt too badly when it happens.

  14. 14 Alma Tenorio May 13, 2010 at 2:06 PM

    Very interesting. I never knew the exact effect that the imports from China to the U.S. benefitted China. However it seems to me that with their exports, they would be doing a better job, thus the increasing economy. I am not too sure about what the U.S. is to do about this. With a more valued currency it seems that it should balance out their import and exports. Inflation is always a problem by causing a reduction of saving and investment. This is what causes economic problems for this country. I do not understand, however, why China doesn’t do what is advised of them from experts. All countries are different, and thus the ever changing economy.

  15. 15 Chris Hirst May 16, 2010 at 3:08 PM

    We should tell china how to spend there money, what we really need to do is stop letting them produce all of our goods and take all of our jobs. By giving them all to asia we have killed our own economy, ans seemingly helped theirs.

  16. 16 Justin Castro May 16, 2010 at 10:10 PM

    I agree that China should be more flexible with currency exchange. It would greatly help the country in their monetary policy. It would also make exchange rates and inflation decrease as well. Even though this is the case, increasing exports is far less important than improving the domestic market

  17. 17 Daniel Reddell May 16, 2010 at 10:56 PM

    I agree with the author of this article. There should be a fairness in global trade. No country should have an advantage over the others. The fact that one country has an advantage will only push the other countries lower and in turn will backfire on that country, causing less trade. In the long run, having high exports but low imports will only hurt China.

  18. 18 Miles Atkinson May 17, 2010 at 2:33 AM

    Clearly China wants to keep the yuan as low as possible to benefit themselves with exporting their products to foreign countries. The US needs to focus more on producing their own products rather than just importing it from China. If the US wants to improve their economy, they must start providing themselves.

  19. 19 Caitlin K May 17, 2010 at 3:56 PM

    I’m confused at why we are concerned about the yaun being valued less than the dollar. I thought it would be a good thing to be able to import more from china for less. It seems like bad news for China, but then again the U.S. buys so much from china because it is cheap, that we depend on China to support our economy. I agree, we need to focus on building up our own products, so that we don’t have to go elsewhere.

  20. 20 Jamie B May 17, 2010 at 4:59 PM

    It is unfair what the Chinese are doing and it is completely unorthodox and is totally working. They are the only super power to have an economy based on exports, by devaluing their own money it makes it impossible for other countries not to purchase their goods. China’s economy is booming but the money is not necessarily going into their domestic category.

  21. 21 Luke Napier May 17, 2010 at 5:21 PM

    Although China may strictly benefitting their own economic situation it also affects their own people. With how much China exports to all over the world; it is understandable why they would do such things, but it is up to the U.S to stop relying on their products. Not only will it provide the country with more money, but it will also create more jobs in the work force. We need to stop sending all of our money to far off lands and focusing on how we can get out of our current situation.

  22. 22 Meaghan Madgett May 17, 2010 at 8:17 PM

    I agree that China should be more flexible. However it is up to the United States to start improving their economy. The US should start making their own items, and importing them and selling them to other countries. Not only would it provide our country with more currency it would help the unemployment rate making our over all economy stronger and more stable.

  23. 23 Ibrahim Jamil May 17, 2010 at 8:52 PM

    China is a huge market and there is no denying its importance.It has managed to deal with the global economic recession fairly well. Yes its currency is stronger than the dollar but one must understand that exchange rates fluctuate frequently. Imports and exports must still be efficient in order for an economy to grow

  24. 24 Ji Young Yoo (Macro) May 18, 2010 at 7:34 PM

    Since the recent financial crisis in Greece, many investors have lost faith in euro and now, I heard, they are trying to invest more in dollars. If the demand for dollar is increasing in the global exchange market, it will further strengthen the dollar. My question is, since China pegged its currency at about 6.83 to the dollar, will the growing strength of dollar make Chinese Yuan more unsustainable unless they revalue their currencies? Or will they simply take advantage of strong dollar with their export-oriented trade policy? I read the other day that China, because sudden popularity of dollar in int. market, China can’t threaten the US to sell off its bond anymore…

  25. 25 Alex Plascencia May 19, 2010 at 12:25 AM

    The article was a bit confusing but I agree with it. The Chinese currensy would have to be revalued. We need the US dollar to stay strong against the yuan. There axports are their power, but if we tariff their exports they will not be able to increase our debt.

  26. 26 Blanca Cerda May 19, 2010 at 12:41 AM

    I also agree with most people who have already commented, i agree that China should be more flexible to the currency exchange. The Yuan is definitely more stronger because of how much the Chinese export to other countries. I think the Chinese are very smart and know exactly what they are doing.

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