- Tensions escalate over China’s currency
- China and Russia are Acquiring Gold, Dumping US Dollars
- H&M mulls ditching US dollars for Chinese yuan
- Imminent Monetary System Collapse - Sh Imran Hosein
- Tensions mount as police grab protesters in China
- Turkish premier lashes out at Russia and China over their stance on Syria
- Libya: The Questions We Should Be Asking
- US missile system expansion in Asia-Pacific angers China
- Chinese Warships Dock in Israel
- Chinese warships start 4-day visit to Turkey
- Olympic mascots made for LOCOG in Chinese 'sweatshop' factories
- Don’t be duped by Western humanitarian rhetoric on Syria, it's all about Iran
- China in talks to build UK nuclear power plants
- Nigeria: Thrown into Chaos and a State of Civil War: The Role of the IMF
- Russia and China veto of Syria sanctions condemned as 'indefensible'
You are here
China ready to say goodbye to dollar
The head of China's Central Bank has declared that the country is ready to end pegging its currency in dollars, but said that any changes would be gradual.
Press TV, 7 March 2010
Zhou Xiaochuan, governor of the People's Bank of China, described the decision as a "temporary" response to the global financial crisis, but gave no timescale for any change in policy.
"If we are to exit from irregular policies and return to ordinary economic policies, we must be extremely prudent about our choice of timing," Zhou said. "This also includes the [yuan] exchange rate policy."
His comments come as the US administration accuses China of artificially keeping the value of the country's yuan low.
"China and its currency policies are impeding the rebalancing [of the global economy] that's necessary," President Obama had told Bloomberg last month.
"My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they have got a potentially overheating economy," Obama said.
Theme by Danetsoft and Danang Probo Sayekti inspired by Maksimer
Comments
Maybe good for US; Bad for China
In the near term, worthless garbage at Kmart will become more expensive.
The cost of labor is a very small portion of the final price. According to NIKE, their cost for labor is 15% of the factory price to NIKE, and about 4% of the retail price.
I've read a lot of differing figures on the total markup from wholesale to retail on items coming from China. One site said that clothes were marked up 200%, and electronics were marked up 30-60%.
In between the factory and the wholesale price, I think there is also a desk where cost is added just from crossing the desk. Looking at the NIKE figures, I don't believe that some Chinese lady got $4 to sew a pair of tennis shoes that cost $100.
Anyway, that magic "cost plus" desk can alleviate alot of strains coming from an unpegged Chinese yuan. For some time period.
I guess China is planning on selling their junk to their own people. Maybe that will turn out to be something like the US insurance plan: The good citizen has to buy 2 pairs of NIKEs a year, 1 Tommy Hillfinger Jacket, etc...
I was listening to Max Keiser or some other economist who was saying that the Hedge funds had a lot of capitol in the China waiting for them to get unpegged. If the yuan shoots up, the Hedge Funds will pull their money out. And then the riots start.
-----------------------
"Stop judging by appearances, but judge justly."