Seattle Post: Let China set its own currency
( 2003-09-03 14:43) (Seattle Post)
China is managing the world's most prosperous economy. It is creating jobs, exporting goods and boasts a gross domestic product that grew at more than 8 percent during the first half of the year.
But some see this economic success as a threat to America -- and US jobs. These critics -- including many in the Bush administration -- particularly dislike China fixing its currency on the US dollar.
China's central bank fixes the yuan -- known also as the renminbi, or "people's money" -- at about 8.28 to the dollar. The currency is allowed to fluctuate only slightly. This peg, in turn, gives China the stability to plan its enterprises -- and avoid the risk from currency trading that hit other Asian nations during the 1997 financial crisis.
The United States says this makes China's currency too cheap (as well as the sneakers, computers and other products we Americans like to purchase from Chinese manufacturers). It's an election issue in manufacturing states that claim China has an unfair advantage.
Perhaps that's true. But the United States should not be the world's economic adjudicator. China is a sovereign nation that ought to be able to determine how it trades its own currency. If pegging the renminbi to the dollar works, then so be it.
Over the long haul, we need China as a partner in the world economy, instead of blaming that nation for a manufacturing shift that's already occurring at home.
China has found a system that works. We ought to accommodate those contributions, rather than push China toward a wrong step just because we say so.
(by the Intelligence Editorial Board of Seattle Post, US)
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