Revalue? CH 7

       The controversy over the value of the Chinese yuan is an ongoing one. I myself have mixed feelings about the situation. The Chinese government has kept the value of the yuan low making China's exports cheaper and therefore representing an unfair advantage. It is argued that the yuan needs to appreciate and following that the dollar will depreciate. In the long run Americans would benefit because a cheap dollar means US exports would be more price competitive when sold in China and elsewhere. In contrast US firms such as Wal-Mart are not sold on the idea because they are centered in the middle of this controversy. Walmart can sell their products at such low prices because of the current value of the yuan. I do not agree with Walmart's practices however I do agree with their low prices.
      The United States is currently experiencing a recession (depression). Stores such as Wal-mart keep it possible for families to survive. Wal-mart claims that it saves the average American household $2,500 every year. Wal-mart can only keep these prices because of China. Wal-mart's suppliers and competitors acknowledge that there is a wholesale price, a retail price, and a Wal-mart price but what they really mean is there is an "unbeatable" China price. China is the center of Wal-mart's supplier base. China is the largest exporter to the US economy and Wal-mart is the leading importer and retailer in consumer goods. Due to the current economic situation in the United States I have mixed feelings as to whether or not we could benefit on revaluing China's yuan.