Taking on Renminbi?

My friend shared this interesting NY Times article criticizing China’s currency policy and how America should respond to it, corresponding to the Chinese prime minister Wen Jiabao’s announcement on Sunday’s press conference. Interestingly, the comments following this article mainly voiced disagreements. While I agree with columnist Krugman’s saying on undervalued Chinese currency—Renminbi, I do have some different thought.

There is a reason why America has not been playing hardball in China, because both know that it would lead to a lose-lose situation—China will get hurt, on top of that, both American companies and consumers will get hurt badly. Think of how many American corporations have manufacture factories in China; during this economic contraction when every company is losing money, Wal-mart is one of the few retailers growing in revenue, and think of how many goods in Wal-mart are made in China?

I’m not trying to protect China. But truly I don’t think that putting surcharge on imports is a sustainable solution. There are still great amount of Chinese who are still live in poverty or barely survive. China has its own issues, way deeper and harder than lots of people expected. America, China, every country has to protect its own interest --China just does what a country is supposed to do. So of course China will not devalue its currency. That being said, start to think of who is ultimately responsible for American’s economy, to identify the real problems and to fix that first might be the real solution.

Now what’s your thought?