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Should China revalue the yuan?
China showed a $1.68 billion trade surplus in April after a $7.24 billion deficit in March, an unexpectedly swift swing that's likely to restore pressure on China to allow appreciation of the yuan.
- Created by william westbrook
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Why would it bring low wage jobs to the US?
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A typical worker in a factory in China might make the equivalent of 1100 yuan - and this has been escalating for a while but there are other countries that are comparable or have lower labor costs.
With such expansionary US government regulatory meddling and anti-business tone, why would anyone, who didn't need to, move a business to the US?
I really don't think it matters what the Chinese government does. The fact the yuan is undervalued has simply kept prices affordable in the US.
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Many in America blame Chinese wages and the Chinese currency for American jobs going overseas, and thus see revaluatinÂg the Yuan as a solution to America's problems
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But that could hardly be true.
If labour cost was important, then even if China ceases to exist tomorrow, those jobs would NEVER go back to America.
There are plenty of countries out there with a cheaper labor force than the US. Labor jobs would simply go directly from China to these other developing countries, as some of them are starting to do.
Forcing China to revalue the yuan would have ZERO impact on bringing jobs back to America.
The only effect of appreciating the yuan is that BOTH America would be poorer as well as Americans would be poorer.
This is because BOTH the country AND the people would have to pay more for these goods. Instead of paying $1 for the goods that were not created here, you now pay $2 for the same goods that are STILL not made here
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Hello to Mr. Mike Zhang's:
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I already read some comments that I liked it from you. Management issues are not to top a rushing car ahead in long way.But Mike Zhang is clever and smart but the chinese have take the wrong road ahead.Speak to Mr. Zhang.
China has a defy right in from of her and her people, specially the growing domestic product, in a few words young cuban people are the most available and also the most expensive.
China has been graduating many professional chinese off-shore and not only chinese off-shore but many other chinese young students.
They were already learning to speak mandarin and a few others who were starting to learn spanish.Now the Yuan is one of the most controversial currencies.When your exports are with Yuans, you do it with a low value for the Yuan currency.So we have more purchasing power.When are you going to import from China their currency is strong our dollar is weak, so exports we will lower the currency Yuan and many dollars would increase the power of the value dollar when we will import with the Yuan. Any question you don't know about looking for an answer .
When you import from China their Yuan do what? their Yuan is not low value anymore.Now when China has a strong import the Yuan goes with a "soft" currency.
There are so many "soft" balls that are thrown to good hitters but with good eyes and don't losing contact we are in touch wiht humanity.
Sincerely,
Julio Gonzalez Jr.
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If the Yuan rises against the dollar those cheap imports will disapear and jobs will be lost in China. Those jobs are not coming back here. They will go to India or Vietnam or some other cheap labor nation
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Not true, why? Those other countries workers have jobs, and the reason china was chosen was because it had lower wages. As those companies assess the increased labor costs, they will have to balance whether if it is more feasible to switch those jobs to Veitnam, where among competition, wages there would increase as well, or whether it would be more cost efficient to rent a facility in the US and save on other costs such as shipping and the added value of the "made in the USA" label. Most companies forget that "Made in the USA" means better sales domestically if priced competitively. Take the case where I wanted to buy socks. I found a pair that said "Made in the USA" for $7 a pair right next to the chinese pair priced the same. I bought 7 pair of the American ones. If there hadn't been any "made in USA" socks, I might have only bought 3 pair. But because I want to help my fellow Americans out, I increased my spending by more than 100%.
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I try to refrain from buying anything that does not have a Made in the USA label. It just doesn't make any sense to see fellow Americans suffer because I want to "go cheap". Am I being stupid? No, I just have compassion for my country, and with $3,000 positive cash flow per month, I can afford it. If those who also had money did the same thing and bought American, we could turn this country around.
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"and the reason china was chosen was because it had lower wages (than other developing countries)"
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NO, THAT'S NOT TRUE !
In fact, the World Salaries Group ranks China as having the 28th highest salaries (PPP) in the world. And the data they used is based on 2004 figures. Chinese salaries since then have further skyrocketed dramatically.
Source:
http://en.wikipedia.org/wiki/List_of_countries_by_per_capita_personal_income
As for the cities, the average personal income (PPP) are even higher. In some Chinese cities, personal income (PPP) are even higher than some OECD countries.
Source:
http://www.citymayors.com/economics/usb-ipod-index.html
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John, other countries lack resources, skills and education for many of the jobs that would come back to America. The job turnaround in places like India is something like 300% per year. For all the costs of hiring and firing, shipping, and lost value of the Made in America label, it is possible that many jobs would come back to the US. To further explain, if the US created even only a small 5-10% import tax, millions of jobs would come flooding back to the US.
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Hello to every reader and writers from the Journal Community; Wall Street Journal:
There are two sides for this issue, we need first to reduce the value of the chinese money, that will lessen the exports value and second is for stronger imports, that will make a low level exportation and a stronger value of importation.
This time there will be a low value exports and the chinese money is stronger but the high importation value feels stronger.We can get together in this matter.We will get there.
Sincerely,
Julio Gonzalez J
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