Dollar being affected by Yuan
Posted by Stephen Cline on June 30th, 2010The Chinese government is deciding on appreciation of Yuan against the other currencies and more specifically Dollar. Although this has been welcomed in the west, but not what the U.S. government wants for the improvement of the economy.
The power of purchasing of the Chinese companies will rise and commodities sold by china in the U.S. will be cheaper. China will be able to import coal, oil and metals at cheaper costs, helping the multinational companies. But there is surely a flip side to this which will benefit the U.S. customers for buying cheaper goods such as computer and cell phones and the higher transportation costs will see the production being moved into America and reducing the unemployment level. Hence it is very important right now that the U.S. economy adds more jobs amid the criticisms the government is facing because of its inability to decrease unemployment.
The appreciation of Yuan has been done ahead of the G8 and the G20 summit and must be because of the pressure that U.s. and the Chinese governments are facing from all round the world. This move by the Chinese government will see an change in the Chinese defects but only the west can minimize this effects.