Chapter 8

As I understood it, the yuan is the Chinese currency that the Chinese tried to keep up at the same level of value as the American Dollar.  But now it is worth around half as much by the Big Mac principle.  I understand that China buys a lot of U. S. Treasury bonds and owes around or more than $3 trillion.  But if they were to pay it all back, it would alter the balance of money and cost of products made in China.  It would make them more expensive to be created in China, moving labor to the U.S.  The yuan used to be a powerful currency, but has fallen from favor and has been replaced by the Japanese Yen.  China had been given a surplus of money and even with that money, the economic status of the people has not changed a lot, as much of the money was invested into land or was taken by individuals.  This forces for families to hoard their own money reserves to fall back on in times of emergency or for their retirement.  China is in an unbalanced state because it produces a lot of cheap products for the U.S., which artificially inflates the prices for  their consumer in order for the companies to make a profit.  The prices of the products too expensive for the the Chinese consumers to buy what they make.  Essentially, the Chinese  are exporting their own money without seeing much of it come back into their economy.