Chapter 8

I understand that everything revolves around the American dollar. The entire Chinese yuan and how it is valued in its country is all based off of how the American dollar is doing in comparison. The yuan has less value than the dollar and it allows for other countries to have an advantage over China when it comes to handling affairs between them with goods and imports, exports. The country seems to hold more stake in other countries currencies instead of there because of their wealth, value, and power. The Chinese are trying to get their yuan to be a threat across the globe and the only way to do this is through manipulation. The valuing of the yuan is what will keep them on top with other currencies, countries. If they want to be globally dominate with its money, investments, deals, etc then their money has to have some weight in others. China was beginning to look insecure because of their global financial transactions. Consumers and major companies were accepting bribes and other deals, so that they could profit more. China’s kept the value of the yuan steady in relation to the dollar, and then as the dollar decreased in value, the yuan’s own value remained the same which made goods exported out of china cheaper for Americans and Europeans to buy with their currencies. They don’t want to have an undervalued currency because they see that as weakness and poor habits with their currency exchanges.