Quote:
Originally Posted by aceventura3
However, on the other side of the "C" manipulation is the cost it imposes on the Chinese people, sure they benefit from increased export demand, but they pay for it by reduced living standards because they have to support the "C" manipulation below market.
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Their standards are rising, though. They benefit from a burgeoning domestic industry. They make the cars they buy, etc.
Also, the personal savings rate in China is currently 30%. Compare that to 5% in the U.S. (previously zero).
China's imports are heavily weighted towards resources and commodities. They turn a lot of that over to building infrastructure, but I'm sure much of it is also turned around to exported manufactured goods...for a decent profit.
This, in addition to China also ramping up their own export industry as far as resources are concerned.
Sure, the standard of living in China ain't what it's like in North America, but it's certainly better than it has been and it's getting better.
I don't think the suppressed yuan is hurting them. I think it's helping them; that's why they're doing it.