This is another post from my 'Year of China' theme which is my blog theme for 2010, as mentioned earlier in the year, when i did the Nostalgic Chinese Cinema post series.
There has been much talk of late about China and the artificial rate that the RMB (China's official currency, called the Renminbi in full) has been controlled by the Chinese govt. The US govt especially has criticised China and accused it of currency manipulation.
I think its laughable really, for the US to point its finger at China and demand that it raise the RMB. I mean the Chinese govt is ultimately responsible to the Chinese people and if it were not for the current artificially low rate at which the RMB is, China and its export-driven economy would not have been able to grow at such a rapid rate and millions of Chinese would not have been able to pull themselves out of poverty. I mean, US and foreign companies are also responsible for the low rate of the RMB. The thousands of US and foreign investor companies in China go there precisely because of the low RMB value so that they can earn massive profits when exporting back to their own countries and the consumers in these rich countries ultimately benefit with being able to save and buy cheap consumer products. Furthermore, if the yuan were to be revalued upwards too swiftly, it'd lead to thousands of factories in China shutting down which would lead to massive unemployment and societal unrest as Chinese factories are already operating on extremely minor profit margins due to the pressure of US and foreign buyers/companies who refuse to raise buying costs by much and thus the Chinese govt cannot be expected to please and help the US and Western economies by raising the rmb value whilst at the same time jeopardising the Chinese economy by doing so. This is an unreasonable demand.
However, the most unreasonable and ridiculous statement coming out of some US politician's mouth is that the current World Economic Crisis is somehow China's fault due to it's low rmb. RUBBISH. Typical behaviour of some countries unwilling to take responsibility for the deformed financial and banking sectors of the US and Europe and trying to scapegoat China for their economic problems. What nonsense really.
And all the talk of 'imbalance in the world economy' as the cause of the current world economic crisis is similar bullshit. What imbalance? When the US and European economies and their people were spending more than they could afford and their banks were fudging the figures, who else could they blame? Their consumers wanted the cheap products and their businesses went overseas to get them. Blaming China and other Asian economies for not spending enough thus causing the 'so-called' imbalance of trade is like a person whom borrows irresponsibly from another person and then buys and buys from that exact same person and when he or she becomes bankrupt then goes on to chastise the other person for producing such cheap and useful products and not spending enough money themselves. Huh?
Typical of some to want to feel better about themselves in the mess that they've made themselves by blaming others, namely China. I never heard Asian economies complaining about the imbalance of trade and Western countries' faults back during the 1997 Asian Financial Crisis.
The US and Western world will just have to learn to accept their responsibility for creating the current financial crisis which they're just coming to recover from, quit complaining and pushing the blame to other countries and their currencies, and start reforming and restructuring their messed-up financial and banking sector as well as dodgy companies, such as Goldman Sachs, for one, just like Asian economies had to do back in 1997.
As a final note, it's ironic how some Western commentators and talking heads were talking about the impending 'collapse' of China's economy and their criticism of Chinese economic practices and corporate practices back before the 2008 Financial Collapse in the Western world when it was them whom fell with their face down..and fast. China has hardly been affected, and speeding ahead straight pass them and Western Companies such as Freddie Mae and Goldman Sachs have been found to have shoddy and unethical corporate practices.
There is the realisation now that it is the Western banking and financial sector which needed the reforms which the West was previously criticising China as needing all along.
Look who's Laughing now.