agree. but the point is China has already passed that stage. you don't need to control your currency the way you been doing for as long as i can remember.
Oh, no, considering we still have more than hundreds millions people living in poverty, we still need do this.
why do you need to continue the same way, making enemies in the world.
Well, in economic field, there is no enemy but competetor.
ok. if they follow your route and peg their dollar to say 3 yuan (1:3) what will you do?
Well, the problem is that they are incapable of doing this. They have a open financial system, this strategy will make the investment in their countries extremely cheap, then the foreign captial will rush in and pull the exchange rate back. On the other hand, china's exclusive financial system keep the "hot" foreign capital out and put most of its international trade earnings in western financial market, so that china can control the rate.
This is my understanding, if i am wrong, pls correct me.
or if US were to hit back with either cutting off chinese imports or put anti dumping taxes on imports or if they source imports from other countries, what would happen?
Now, china is providing the cheapest goods to US. If US turn to other countries or produce by itself will increase the purchase cost, which leads to the larger trading deficit to US. Do you think US is willing to hurt itself in order to make China uncomfortable?
point is you have been doing this for long enough now hitting every country in your greed. growth should be fair not only to chinese but their partners too.
Business is not fair or unfair unless one side was forced to sign the deal.
Even though China is moving fast in the industry chain, the majority of chinese maufacturer is still focusing in the low-end industries in which sector price is a significant factor. So as long as china is still a low-tech producer, china will continue to seek any opportunity to reduce its price.
Business is business, nothing personal.