Current Currency in china

China has quickly emerged as one of the most dominant economic forces of the 20th century . The exponential increases in production have vaulted the Chinese Yuan to the top of the basket of currencies that are currently being traded in the world market . Despite the efforts of Chinese officials to stem the rapid increase of the Yuan 's value over the years , the weakening dollar and the robust Chinese economy have kept the Yuan 's value higher than the economic level . This rapid increase in value over the years has also been the

cause for much of the inflation that the Chinese consumers are currently experiencing . Lately , however the Yuan has been experiencing a slight decline due to the manipulation of Chinese officials in to keep China competitive in the Global Market and to stave off any bouts of inflation that will occur . This short discourse will therefore discuss the events following the recent slowdown in the value of the Yuan in the context of China 's position in the global market

The key to understanding the devaluation of the Yuan lies in being able to understand the steps that Chinese Officials have taken to protect the Chinese Currency and economy . In to address the previous rise in the value of the Chinese Yuan and the growth of the Chinese economy Chinese officials have made many attempts to curb this sharp increase of currency value . In 2005 , the Yuan declined in value as it dropped the dollar peg that it traditionally had in favor of a basket of currencies This caused the Yuan to decline in value against the other currencies of the world . These efforts are not effective however as the Yuan still continued to appreciate in value

The reason for the currency control programs that the Chinese are implementing is quite easy to understand . In for China to maintain its place at the top of the production chain , it needs to maintain a low currency value versus other currencies . The rationale behind this is that by maintaining an undervalued currency , China is able to export its goods at a lower price thus encouraging the market to purchase more of its goods . This results in the imbalance of trade that most countries are currently experiencing with China . Recent calls for China to increase the value of its currency have remained largely unheeded by Chinese Officials

Now that the interest of China in keeping an undervalued currency has been explained , a discussion on the recent steps and events must be undertaken so as to provide a better picture of this economic phenomenon . With the American economy entering a recession and the dollar decreasing in value , most currencies that have been pegged against the dollar have also experienced a slight decline in their value . While it may seem like it is a negative effect , the reality is that it is actually a boon for these Asian currencies . The reason , as explained earlier , is because it now allows these...