The talk about China stage-managing its exchange rates by a US Treasury official has met with great resistance and has been termed as false and hoodwinking. This, according to the Chinese officials will take the matter out of focus of the real concern on hand for the financial predicament.
However, the US Treasury Secretary reiterated its stance to the highest office in the White House about the Chinese intervention and backed it with enough supporting documented evidence. At the same time, if it is not controlled it will result in trade protective which will harm the economy from limping back to a steadfast one.
According to the latest statistics released, China was able to show case a 9% growth in the year 2008. But, the US remained on top of the world’s largest economy scales. Conversely, a Chinese official went on to clarify that the Chinese could offer the price advantage in exports because of the low cost of labor, resource and land.
Since mid-2005, the Chinese have stopped a ten year old attachment to the US dollar and encouraged its currency to rise by 2.1%. From then onwards, the Yuan has been steadily rising, and at last count was almost 20% when compared to the US dollar.
But, now is the time when they have stopped taking any steps to move with US dollar and there are many reasons of them doing so. The question is, will it have an impact on the overall global economic crisis? You better wait and see!