China Currency Overview
Historical Background and the Current Debate
China’s policy of intervention to limit the appreciation of its currency, the renminbi (RMB), or yuan, against the dollar and other currencies has become a major source of tension with many of its trading partners, especially the United States. Some analysts contend that China deliberately “manipulates” its currency in order to gain unfair trade advantages over its trading partners. They further argue that China’s undervalued currency has been a major factor in the large annual U.S. trade deficits with China and the loss of millions of U.S. manufacturing jobs, and because of the current high rate of U.S. unemployment, can…
