Summaries on Chinese Yuan Currency Assignment Example | Topics and Well Written Essays - 2000 words

Summaries on Chinese Yuan Currency - Assignment Example There is also a growing middle class in China that also benefits economic indicators. The article ‘White House Reviewing Proposed U.S. Legislation on the Yuan, Carney Says’ investigates potential policy legislation aimed at the Chinese yuan. White House press secretary Jay Carney has indicated that the Obama’s administrations views on the Chinese yuan currency is that the Chinese government has significantly undervalued this currency as a means of establishing Chinese economic gains. Specific measures in this policy would allow United States companies to seek duties on imports from China as a means of compensating for the unfair advantage Chinese businesses receive from the undervalued yuan currency. In terms of current statistical elements, the article indicates that, â€Å"China’s yuan rose after the central bank set a record daily reference rate, fueling speculation policy makers will favor currency gains as a means to tame inflation and support global exports. The currency gained 0.08 percent to 6.3938 per dollar in Shanghai, according to the China Foreign Exchange Trade System.† It’s also indicated that China’s current economic policies have resulted in the United States losing more than 2.8 million jobs since 2001. It remains to be seen if this legislation will have a bipartisan character. Republican Senator Orrin Hatch has not rejected the potential legislation but has indicated that he will need to learn more about its specific elements. The article ‘Yuan Has Monthly Drop as Europe Debt Crisis Spurs Dollar Demand’ examines volatility related to the Chinese yuan. The article indicates that the Chinese yuan has declined for the first time since January. The currency has declined as Europe’s sovereign-debt crisis will worsen bolstered demand for dollars. The Yuan trading volume greatly decreased in Shanghai as the Chinese government has set its strongest reference rate on record as a means of preventing further investment slide towards the dollar. The pervading notion in these regards is that investors feel the European sovereign debt crisis will slow Chinese economic growth because of strong investment between the nations; the subsequent expansion failure creates an investment environment where the dollar is a more stable investment option. In terms of global outlook in this context of discussion the article notes that, â€Å"European leaders have struggled to contain the region’s worsening debt crisis amid growing concern Greece will default. The International Monetary Fund cut China’s 2012 growth forecast to 9 percent from 9.5 percent on Sept. 20 on credit tightening and faltering demand for its exports.† Still, the Obama administration continues to note that the Chinese yuan remains substantially undervalued even though the currency appreciated 10 percent adjusted for inflation since June 2010. It’s believed that if more volatility and turmoil continue in relation to the yuan the People’s Republic of China will peg the yuan to the dollar. The article ‘Becoming number one’ considers how China’s economy could potentially overtake America’s within the next decade. Within this context of understanding it’s indicated that in 2010 the Chinese economy overtook Japan as the world’s second-largest economy. Analysts indicate that it