This article states a problem to global economic recovery which is the disparities of growth between the emerging economies and "debt-laden regions". According to the IMF forecast, China will still be the fastest growing economy in the world in 2011. The western economies including U.S. seeks to push up the undervalued yuan. China however sought to ease the tension by raising its bank reserve for the eighth time in a year to fight inflation while still resisting western pressure by objecting to the "use of the current account,the widest measures of trade, as a benchmark" which can give a opening to the west.
Next G-20 meeting in mid-April will formulate voluntary set of guidelines for national economic policy that will be a yardstick that can be used for leverage on Yuan. Nations are clashing over policies that are needed to erase global imbalance and sustain recovery. But the agreement of G-20 finance officials to monitor global economic imbalances more closely might prevent a future crisis if it is put in to action effectively.
1 comment:
China’s currency remains substantially undervalued, and in this way, China keeps its advantage in exporting to the world. However, if Chinese governement release its policy that manipulates the Yuan value, everything that comes from China will be more expensive. In the US, Chinese manufacture steals numbers of jobs away, however, when it is really comes the time that everyone has to pay more in Wal-mart, who wants that result. On the other hand, the appreciation of Yuan makes Chinese people richer, especially for those who live in the US.
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