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Why is control of the renminbi controversial?

Why is control of the renminbi controversial?. Pei-ling liu Nilar thein Arturo Peguero. Outline. Current Situation Why RMB devaluated Conclusion. Current situation. 1 USD = 6.162 RMB. Current situation. Fluctuation History. EFFECTS OF CONTROL. POSITIVE EXPORTS UNEMPLOYMENT RATE

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Why is control of the renminbi controversial?

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  1. Why is control of the renminbi controversial? Pei-ling liu Nilar thein Arturo Peguero

  2. Outline • Current Situation • Why RMB devaluated • Conclusion

  3. Current situation • 1 USD = 6.162 RMB

  4. Current situation • Fluctuation History

  5. EFFECTS OF CONTROL POSITIVE • EXPORTS • UNEMPLOYMENT RATE • GROWTH RATE • NEGATIVE • INTERNATIONAL PRESSURES • NOT FOR DOMESTIC ECONOMY REFORM • RMB INTERNALIZATION • EXPECTATION

  6. Source of controversy • Forcefully keeping RMB undervalued • Countries argue it gives China an unfair advantage in exports against countries with free floating currencies • Unfair Increased competitiveness (Cheap) of Chinese products in international markets

  7. Letting go • Appreciation of RMB: • Good for domestic economy reform: • Domestic Consumption • Growth Rate • RMB internalization

  8. REASONS TO LET GO • Economy reform • Stable society • Environment protection

  9. REASONS TO LET GO • Avoid Future Crashes • RMB Undervalued • Balassa-Samuelson Relationship (economic theory)

  10. Thank you

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