Ali
07-22-2005, 08:35 AM
Under the new system, the yuan's value will be based on a basket of foreign currencies. It restricts the daily rise of the currency, but economists say its value could increase by 10 to 15 percent against the dollar over the next two years.
The United States and China's other trading partners have been pushing Beijing for years to let the yuan rise, claiming it was undervalued by up to 40 percent and giving Chinese exporters an unfair price advantage.
Economists say the direct impact on the huge U.S. trade deficit with China - a record US$162 billion (euro124 billion) last year - should be limited. But in the longer-term, U.S. officials are hoping a rising yuan will help struggling American manufacturers, which have lost 3 million jobs since mid-2000.
"The winner in all of this will be American businesses and ultimately U.S. workers," said Mark Zandi, chief economist at Economy.com, a forecasting firm.
"It is now more likely that a person working in a U.S. factory today will still be working in that factory five years from now because American products will be more competitive." Happy now?
The United States and China's other trading partners have been pushing Beijing for years to let the yuan rise, claiming it was undervalued by up to 40 percent and giving Chinese exporters an unfair price advantage.
Economists say the direct impact on the huge U.S. trade deficit with China - a record US$162 billion (euro124 billion) last year - should be limited. But in the longer-term, U.S. officials are hoping a rising yuan will help struggling American manufacturers, which have lost 3 million jobs since mid-2000.
"The winner in all of this will be American businesses and ultimately U.S. workers," said Mark Zandi, chief economist at Economy.com, a forecasting firm.
"It is now more likely that a person working in a U.S. factory today will still be working in that factory five years from now because American products will be more competitive." Happy now?