This is an interesting article and looks like it ties the loose ends about whether or not China will do anything about their monetary policy. China will no adjust the exchange rate for its currency. With their lowered currency, Chinese goods have been bought, thus making China the largest exporter in the world. Adjusting the exchange rate would cause appreciation to their currency, which would lower net exports.
The United States is trying to pass a bill through Congress giving it the Commerce Department the right impose tariffs on Chinese goods. Although, it seems some congressmen are fully aware of how imposing tariffs will not affect net exports, but instead cause appreciation of the American dollar. Other options include multilateral talks through the G-20 pressing China from different nations instead of just one nation.
Chinese export market is the biggest in the world meaning the relative price of Chinese goods must be low compared to other nations. This sheds light on the fact that China infact is growing at the expense of the goods and service market of other economies. If Chinese are to set their exchange rate high, the appreciation would definitely cause their goods to lose appeal in the world market. But there has to be a fine line of balance where both US and China come to a conclusion about the exchange rate. An optimum solution would be to increase the exchange rate negotiating with other G-20 leaders.
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