I don’t know about you, but I always have a good laugh, when I hear the comments of the USA regarding the Chinese currency, the Chinese Yuan.
The US politicians say, that the fixed exchange rate is unfair and that the market should decide about the value of the yuan. A fixed exchange rate supports exports from China to the USA, while products from the USA have a hard time finding their way into the Middle Kingdom. Well, not only the USA is crying about the exchange rate, also several other Western governments happily chime in.
As far as I can remember, prices are a question of supply and demand. Let’s assume the Chinese yuan is freely tradeable. Who is then going to stop the USA from printing money and increasing the supply of US-Dollars? It could be called currency manipulation as well. A lot of people around the world hold dollar assets at the moment. They will do something to prevent US-Dollar devaluation. However it won’t go on like this forever as the US-Dollar’s position as world-currency is weakening. The US government can just print money or remove money to control the value of the US-Dollar. That, at least to me, is similarly manipulative as a fixed exchange rate.
The US should rather improve their economy, the US people should work harder instead of spending time on crying about the Chinese Yuan. In fact the US people should be happy about China trying to move forward economically. Each Chinese person who leaves poverty behind and gets hold of some money is a potential buyer of Western luxury brands like Apple, Bentley or Luis Vitton.