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Letting the Yuan free fall/rise

Popularity 4Viewed 3014 times 2017-1-9 04:36 |System category:Economy| economy, yuan, fiscal, policies, government

I just read in a business newspaper in the Hoboken Library of the possibility of the Yuan flying 'free'.

By free, I mean letting current market forces dictate its true value without governmental tinkering.

Economics was never one of my strongest subjects in university, but the entrepreneur and Chinese native in me tend to think it may not be a bad idea overall.

Sure, if the Yuan becomes 'expensive' in the global arena then China's export industry may be hit. Conversely if the Yuan becomes too 'cheap' then how does it reflect on China's international image as the world's 2nd largest economy? Is China going to compete based on value based inventions and knowledge workers or is she going to compete based on a 'cheap' currency? There is also a question of national pride and branding at stake.

In my humble opinion, seeing how far China has come from its political, economic, social and cultural standpoint just in the last 3 decades I'd say let the market forces determine the Yuan's true value. It is a reflection of the Chinese people's hard work, sacrifices made and the Motherland's new standing in the global playing field.

 

(Opinions of the writer in this blog don't represent those of China Daily.)


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Reply Report MichaelM 2017-1-14 23:16
For China to gain the respect (economically) that it desires, it is going to have to leave it alone. America has never attempted to deal with the value of its currency. Of course, since the USD is the standard for most of the world, it would be virtually impossible for the USA to do this. China needs to know the yuan's real value based on the market. This is the only way that it will gain the trust and respect that China desires.

Oh, you did a very good job on your blog!!! Well written. Very clear. :)
Reply Report Wazed 2017-1-15 00:51
I do believe China is clearly ahead in terms of influential economic indicators than other countries and its position is constantly strengthening...one of the important distinctions of the country is that it believes on regional and international integration thus the country also playing crucial roles to the global socio-economic development...Best of luck for great, talented and industrious Chinese people and the country as well!
Reply Report Ted180 2017-1-15 04:33
Generally I favour letting the market decide the value of currencies. However, certain situations may dictate some artificial controls. China has a very big job to spread the rising wealth of its cities out to the poorer countryside.That may require some controls.
Reply Report jaseminsibo 2017-1-16 06:32
Ted180: Generally I favour letting the market decide the value of currencies. However, certain situations may dictate some artificial controls. China has a ve ...
I agree with you. Let's hope 2017 will be the year where prosperity will truly be available for all.
Reply Report Liononthehunt 2017-1-17 17:20
In the long run, a Chinese currency whose value is solely decided by the market is in the interest of the country, as it is a prerequisite for the Yuan to be sufficiently internationalized. However, as the country's financial sector currently has yet to be fully opened to the outside world, I suppose a free-floating Yuan may pose tremendous risks to the stability of China's financial and monetary markets.
Reply Report jaseminsibo 2017-1-18 00:12
MichaelM: For China to gain the respect (economically) that it desires, it is going to have to leave it alone. America has never attempted to deal with the valu ...
Thank you for the encouragement my friend :)
Reply Report jaseminsibo 2017-1-18 00:13
Wazed: I do believe China is clearly ahead in terms of influential economic indicators than other countries and its position is constantly strengthening...on ...
Thanks for your belief in us :)
Reply Report jaseminsibo 2017-1-18 00:16
Liononthehunt: In the long run, a Chinese currency whose value is solely decided by the market is in the interest of the country, as it is a prerequisite for the Yua ...
I tend to support policies that best benefits the people. And I truly believe Chinese all over the world have struggled, gained wisdom, matured and is ready to compete in the global playing field. It is never easy to let the beloved bird fly away from the nest, but it is necessary for its continuous growth and actualization.
Reply Report MichaelM 2017-1-20 05:31
jaseminsibo: Thank you for the encouragement my friend :)
You're welcome

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