Page 14 - SCBJ-201609
P. 14
South China Business Journal
HIGHLIGHT TTfraraacddteResFAaTcC&tEHsU|I&SNCATUH’RSISANTEDARXE’CASDHDEEAEXFNCDICHGEIEATFRNICAGITETE
E OFTEN HEAR that China “manipulates its currency” and harms the US economy. Some
WWe often hear that China “samy ifawne ippunuislhaCtheinsa aits sa mcaunirpruelantocr oyr”slaapntadriffhs oanrCmhinsestehgoeodUs iSt woeucldorendoucme ouyr.
Some say if we punish China as a manipulatotrradoe rdesfilcait.pButtawhraift fdsoeos cnurrCenhcyinmeansipeulagtioonomdesan?
{ {it would reduce our trade deficit. But wMhorae timdpoorteanstlyc, uworurled ntarcifyfs omn Cahniniepseugolaodtsihoelnp omur eecaonnom?y?
More importantly, would tariffs on Chinese goods help our economy?
By Carly Brockinton
TThough ChHinOaUGdHoeCsHcIoNnAtrDoOl EthS ecoenxtrcohl athnegeexcrhaatneg,e rate, steady Weak correlation
steady engaenggeamgeemnenttaanndd nneeggootitaitaiotniobny bthye tThreeaTsurreyaDseuprayrtment There is little evidence that China’s exchange rate affects
Departhmasenletdhtoasa l2e0d pteorcaen2t0stpreenrgctehnentinsgtroefntghtehReennimnignboifYtuhaen the US trade balance.
renmin(bRiM(BR)MagBai)nastgtahiendsotlltahr eovdeorltlhaer poavset rdetchaedepoarsstod. eIncaJdunee
or so. In20J16u,nthee2I0M1F6,fotrhteheIMsecFonfdoryetahreinseacoronwdsyaiedatrhaint Cahina’s Pre-recession Global Global recovery
rvoawlusea. iEcduvrterhennacstyoClmahrgeienloyafr’setfhlceeuctrhsraietrsnsfcahiyrevslaatlrufgoe.erElmyveernresfcolrmeictetioscfsitthasegfhraaeirershest recession
with thfaortmaesrsceristsicms aegnrete. with that assessment. Dollar weakens Dollar weakens
against RMB Exchange against RMB
Over thOevesratmheesapmeerpioedri,odt,hteheUUSS ttrraadeddeedficeiftiwciitthwCihtihnaCcohnitninaued rate stable
continutoedgrtoow,gerxocewp,t feoxrcaebprtieffoprauasebdruireifngptahue s2e00d8u-0r9inrgecession, 8.28 RMB
tshpeen2d0i0nw8gh-.e0nI9nArmfeaeccreitcs,astnihsoecnu,bt wibgahgckeenosntAsdpmreinevdreiinrcgao. nfInsthfcaecutt,ttrbhaeadbceikgdgoeensfticit per USD
is just tdhriavetr—of twhehterandeAdmefiecriticisaj’usstetchoant —omwyheinsAhmeearlictah’sy,
Americeacnonsosmpyeins dhemaltohry,eA, manerdicatnhsesypebnudymmoreo,raendththineygbsuy more 6.39 RMB
that artehimngasdtheatoavreermseadaeso, vteorose,aws,htoioc,hwdhircihvdersivuesputphtehettrraddee per USD
deficit. deficit.
2004 2006 2008 2010 2012 2014 2015
Why doesn’t the exchange rate have much of an impact Trade
on the UWShytdroaedsne’tbthaelaexnccheanwgeitrhateChhaivne am?ucPhuotf asnimimpplayc,t on the deficit US trade deficit $367
importsUSfrtoramdeCbahlainncae lwairthgCelhyinrae?pPluat cseimoptlyh,eimr pimortpsofrrotms,Cnhointa shrinks with China grows billion
US proldaurgcetlyiornep.laMceuocthheor fimwphoratst, wnoet UimS pproordtucftrionm. MCuhchinoaf what
used towbeeimimpoprtofrrotemdCfhrionma usJeadptoabne, iTmapiowrteadnf,roamndJaoptahn,eTraiwan, US trade deficit
Asian eacnodnoothmerieAss.iaOn veceornothmeiesp.aOsvterttwheopdaestctawdoedse,cAadseisa, Ansian with China grows
Ccohminpaa.ncAoiemsspChahnaiievnseahs’ashvesifhsthaeifdrteetdohtfheetiirhr eeexxUppoSortrtmtrmaandauefnadcutefuafriiccntiguttrroioCnshgein,tao.
the shaArseCohfintah’seshUaSre dofetfhieciUtSfrtroamde tdhefeicirtersotseo, fthEe ashsatreAosfitahe US $162
declinedde.fiIcfitwfreomsltahpe preesdt otfaEraisftfAssoiandepclrinoeddu. cIftws efrsolamppeCdhtairnifafs, billion
we’d juosnt pgroodbuacctskfrtoomimChpinoar,twine’dg jtuhstogsoebpacrkotdouimctpsorftrionmg those 2004 2006 2008 2010 2012 2014 2015
anotherprfoodruecitgs nfropmroducer — and pay more for it. The
biggestawnoitnhenrefrosrefigrnomproadutcaerri—ffaonnd pCahy imnoerseefoirmit.pTohretsbigwgoesutld * 2015 was the last full year of data for comparison
be othewrinfonreersigfrnommaatnaruifffaocntCuhrienresse; itmhpeorbtisgwgoeusldt bloesoethresrwfooreuigldn
be Amemriacnaunfachtuoruersse;hthoeldbisg.gest losers would be American house- factors are due to unfair trade advantages, we should go
after them with legally-sound, internationally-accepted
There ahroeldfsa. ctors that make China’s exports to the Btruat wdee aarcetdieocneisv.inSgtoaunrsdeilnvegs tuopthaingkatihnast t“fiuxinnfga”iCrhtinraa’ds e
United States cheaper than those produced in other epxrcahacntigceersatiesotrhsleaprpiignhg ttatrhiffisnogntaoll dimop.orts from China
countriTehseorera, rienfascotomrsethcaatsmeask,eUCShi-nma’saedxepoprrtsotdouthcetsU.nIiftetdhSotsatees
would have much of an impact on our trade deficit— or bring
Sources: Pcehoepalep’serBathnaknofthCohsineap,rUoSduCceendsuins, oatnhdeUr ScoBuunrteraiuesoof rL,aibnorsoSmtaetistics
cases, US-made products. If those aBnuy tbewneefiat troethdeeUceSievcionngomoyu.rselves to think that “fixing”
China’s exchange rate or slapping tariffs on all imports
factors are due to unfair trade advantages, we should go after from China would have much of an impact on our trade
deficit — or bring any benefit to the US economy.
them with legally-sound, internationally-accepted trade actions.
This article was first published on http://www©.chiJnuanbuesi2n0e1ss6reUviSew-C.choimn/atrBadues-iness Council
Standing up against unfair trade practices is the right thing to do. facts-chinas-exchange-rate-us-trade-deficit/.
12
HIGHLIGHT TTfraraacddteResFAaTcC&tEHsU|I&SNCATUH’RSISANTEDARXE’CASDHDEEAEXFNCDICHGEIEATFRNICAGITETE
E OFTEN HEAR that China “manipulates its currency” and harms the US economy. Some
WWe often hear that China “samy ifawne ippunuislhaCtheinsa aits sa mcaunirpruelantocr oyr”slaapntadriffhs oanrCmhinsestehgoeodUs iSt woeucldorendoucme ouyr.
Some say if we punish China as a manipulatotrradoe rdesfilcait.pButtawhraift fdsoeos cnurrCenhcyinmeansipeulagtioonomdesan?
{ {it would reduce our trade deficit. But wMhorae timdpoorteanstlyc, uworurled ntarcifyfs omn Cahniniepseugolaodtsihoelnp omur eecaonnom?y?
More importantly, would tariffs on Chinese goods help our economy?
By Carly Brockinton
TThough ChHinOaUGdHoeCsHcIoNnAtrDoOl EthS ecoenxtrcohl athnegeexcrhaatneg,e rate, steady Weak correlation
steady engaenggeamgeemnenttaanndd nneeggootitaitaiotniobny bthye tThreeaTsurreyaDseuprayrtment There is little evidence that China’s exchange rate affects
Departhmasenletdhtoasa l2e0d pteorcaen2t0stpreenrgctehnentinsgtroefntghtehReennimnignboifYtuhaen the US trade balance.
renmin(bRiM(BR)MagBai)nastgtahiendsotlltahr eovdeorltlhaer poavset rdetchaedepoarsstod. eIncaJdunee
or so. In20J16u,nthee2I0M1F6,fotrhteheIMsecFonfdoryetahreinseacoronwdsyaiedatrhaint Cahina’s Pre-recession Global Global recovery
rvoawlusea. iEcduvrterhennacstyoClmahrgeienloyafr’setfhlceeuctrhsraietrsnsfcahiyrevslaatlrufgoe.erElmyveernresfcolrmeictetioscfsitthasegfhraaeirershest recession
with thfaortmaesrsceristsicms aegnrete. with that assessment. Dollar weakens Dollar weakens
against RMB Exchange against RMB
Over thOevesratmheesapmeerpioedri,odt,hteheUUSS ttrraadeddeedficeiftiwciitthwCihtihnaCcohnitninaued rate stable
continutoedgrtoow,gerxocewp,t feoxrcaebprtieffoprauasebdruireifngptahue s2e00d8u-0r9inrgecession, 8.28 RMB
tshpeen2d0i0nw8gh-.e0nI9nArmfeaeccreitcs,astnihsoecnu,bt wibgahgckeenosntAsdpmreinevdreiinrcgao. nfInsthfcaecutt,ttrbhaeadbceikgdgoeensfticit per USD
is just tdhriavetr—of twhehterandeAdmefiecriticisaj’usstetchoant —omwyheinsAhmeearlictah’sy,
Americeacnonsosmpyeins dhemaltohry,eA, manerdicatnhsesypebnudymmoreo,raendththineygbsuy more 6.39 RMB
that artehimngasdtheatoavreermseadaeso, vteorose,aws,htoioc,hwdhircihvdersivuesputphtehettrraddee per USD
deficit. deficit.
2004 2006 2008 2010 2012 2014 2015
Why doesn’t the exchange rate have much of an impact Trade
on the UWShytdroaedsne’tbthaelaexnccheanwgeitrhateChhaivne am?ucPhuotf asnimimpplayc,t on the deficit US trade deficit $367
importsUSfrtoramdeCbahlainncae lwairthgCelhyinrae?pPluat cseimoptlyh,eimr pimortpsofrrotms,Cnhointa shrinks with China grows billion
US proldaurgcetlyiornep.laMceuocthheor fimwphoratst, wnoet UimS pproordtucftrionm. MCuhchinoaf what
used towbeeimimpoprtofrrotemdCfhrionma usJeadptoabne, iTmapiowrteadnf,roamndJaoptahn,eTraiwan, US trade deficit
Asian eacnodnoothmerieAss.iaOn veceornothmeiesp.aOsvterttwheopdaestctawdoedse,cAadseisa, Ansian with China grows
Ccohminpaa.ncAoiemsspChahnaiievnseahs’ashvesifhsthaeifdrteetdohtfheetiirhr eeexxUppoSortrtmtrmaandauefnadcutefuafriiccntiguttrroioCnshgein,tao.
the shaArseCohfintah’seshUaSre dofetfhieciUtSfrtroamde tdhefeicirtersotseo, fthEe ashsatreAosfitahe US $162
declinedde.fiIcfitwfreomsltahpe preesdt otfaEraisftfAssoiandepclrinoeddu. cIftws efrsolamppeCdhtairnifafs, billion
we’d juosnt pgroodbuacctskfrtoomimChpinoar,twine’dg jtuhstogsoebpacrkotdouimctpsorftrionmg those 2004 2006 2008 2010 2012 2014 2015
anotherprfoodruecitgs nfropmroducer — and pay more for it. The
biggestawnoitnhenrefrosrefigrnomproadutcaerri—ffaonnd pCahy imnoerseefoirmit.pTohretsbigwgoesutld * 2015 was the last full year of data for comparison
be othewrinfonreersigfrnommaatnaruifffaocntCuhrienresse; itmhpeorbtisgwgoeusldt bloesoethresrwfooreuigldn
be Amemriacnaunfachtuoruersse;hthoeldbisg.gest losers would be American house- factors are due to unfair trade advantages, we should go
after them with legally-sound, internationally-accepted
There ahroeldfsa. ctors that make China’s exports to the Btruat wdee aarcetdieocneisv.inSgtoaunrsdeilnvegs tuopthaingkatihnast t“fiuxinnfga”iCrhtinraa’ds e
United States cheaper than those produced in other epxrcahacntigceersatiesotrhsleaprpiignhg ttatrhiffisnogntaoll dimop.orts from China
countriTehseorera, rienfascotomrsethcaatsmeask,eUCShi-nma’saedxepoprrtsotdouthcetsU.nIiftetdhSotsatees
would have much of an impact on our trade deficit— or bring
Sources: Pcehoepalep’serBathnaknofthCohsineap,rUoSduCceendsuins, oatnhdeUr ScoBuunrteraiuesoof rL,aibnorsoSmtaetistics
cases, US-made products. If those aBnuy tbewneefiat troethdeeUceSievcionngomoyu.rselves to think that “fixing”
China’s exchange rate or slapping tariffs on all imports
factors are due to unfair trade advantages, we should go after from China would have much of an impact on our trade
deficit — or bring any benefit to the US economy.
them with legally-sound, internationally-accepted trade actions.
This article was first published on http://www©.chiJnuanbuesi2n0e1ss6reUviSew-C.choimn/atrBadues-iness Council
Standing up against unfair trade practices is the right thing to do. facts-chinas-exchange-rate-us-trade-deficit/.
12
