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February 24, 2006
The world can live with an undervalued Yuan

While China had been facing tremendous pressure form G7 to revalue its currency and put it on a float, their stance softened after  China undertook token adjustments and introduced a narrow trading band.

The French issued a new statement that the Yuan’s value is the sovereignty of China and it may be better to approach the subject in an informal way rather than exert formal pressure.

While, certain lawmakers in the US have threatened to introduce legislation that will erect trade barriers against China, the Bush administration is completely against the idea.

It’s the complex nature of the global economy that is making nations shy of taking a firm stance on the issue. Disturbing the equation by revaluing the Yuan could slow down the Chinese economic rate of growth as its exports would become dearer. That could prove to be disastrous for global economic growth, so why take chances.


Filed in: in Chinese Yuan (RMB)




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