Monday, October 18, 2010
U.S. Trade Deficit Widens as Gap With China Reaches Record
This article talks about the trade imbalance that the U.S. has with China. U.S. politicians want to force officials in Beijing to allow their currency to appreciate. However, as some economist point out this will not automatically fix the issue.
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This is one of the first American articles that I have read that has admitted that the trade deficit will not necessarily be fixed by a solution as simple as letting the RMB rise naturally. I am impressed - people are finally thinking critically.
ReplyDeleteI agree that the trade deficit cannot be solved with just an adjustment of currencies. The United States needs to focus on ways to increase consumer appeal towards locally produced products. An increase in demand for locally produced products will help create jobs in the economy too. The US government should consider increasing the % of GDP that goes towards research and development and possibly make greater innovation and improvements in company standards and efficiencies a bigger focus.
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