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MORE FAILING GRADES FOR CHINA'S ECONOMIC TEAM . . . |
With the Yuan exchange rate hovering at an overvalued rate of 6.20 Yuan/Dollar ratio, Chinese products are now overpriced in Dollars, Euros and Yens abroad, and thus her exports have dived another 2.8% in May 2015, the latest statistics show.
Not only that, China's imports fell 18.1%, despite foreign goods now enjoying a lower price in Yuans, and thus are more competitive against Chinese products. That imports dropped can be due to two factors. First, the importers got greedy, and kept their prices unchanged from before, such that their profit margins got fatter, but their sales dropped because the average consumer is either experiencing a cut in pay or in hours of work, as his employer is suffering from falling sales, and narrowing profit margins, with coming debt repayments due any time soon. Second, the Chinese consumer knows that she needs to save even harder, now that China has lost its manufacturing edge, and unemployment is soon to become more widespread. This fall in imports also proved that China is not exchanging export profits for domestic consumption increases, because both are falling, with consumption of imports falling more than exports.
It is time for the Economic Team of China to either change its consistently erroneous and self-damaging Yuan exchange rate overvaluation (because of the PBOC buying Yuans with its dollar reserves), or to step down as a sign of RESPONSIBILITY to the people they claim to serve. Authority without accountability is would be irresponsible and contrary to the vision of a New China that was enunciated by Xi. It would be a reversal to egoistic self-preservation at the expense of the well-being of the people.