- Registration time
- Last login
- Online time
- 90 Hour
- Reading permission
Reply: No not realy
We are all not economists, and even the economists would not be able to answer the question - what is the correct rate between $ and RMB. |
But, think about it in this way - if China keep undervalued RMB for long time, meanwhile China takes the same rate to buy, what would happen? OR make it simpler in this way - China sells in low prices while buys in high prices, what would happen to this country? Yes, bankruptcy. But China isn't bankrupt, instead, the economy is booming.
When you look at China, you have to keep in mind that this is not a single country, this is a group of countries, which consist of rich east coast provinces and poor west provinces, also many central provinces in between. The population in this country is moving from poor to rich, the economy booming is spreading from rich to poor.
If you have a chance to look at the east coast provinces, you would find that this part of China is as developed as developed countries in many ways but the salary is still much lower than developed nations. Why? Very simple – the poor new comers keep coming, and the competition from poor provinces keep coming without barriers.
The developed nation always keep the door shut to the poor people from poor nations and set as many barriers as they can to keep the competition away when they became developed, but in China, none of the developed province can shut the door or set a barrier. It is a bad thing to those already lived there and had the advantage in the rich provinces but it is a good news to the poor population, also a good thing to entire country – keep the entire country full of energy and competitive.
In last 15 years, the retail prices in China actually keeps dropping, why? Very simple - 15 years ago, most people were still not part of the market economy, but now most of them are. For example, the price of fresh fish was 20-30RMB per kg 15 years ago, but now it is only 4-10, why? Simple, because much more people have fish farms now than 15 years ago.
Even right now, still hundred of millions of Chinese are still not, or no chance to be part of the market economy, for example, many poor farmers are actually only growing what they eat, but contribute to market nothing or very little. China economy in past 15 years was about motivate population into the economy. It is successful but still many of the entire population have not invilved in the economy yet.
It will take long time to motivate entire population into market economy, meanwhile, the prices of goods, services would still keep low by those new comers. This is obviously a good news for whom want to buy cheap, also a bad news to whom want to keep their jobs from competitions.
This is all about market competitiveness – if China is not able to peg US$, China would have to drop this policy, no mater you concern it or not. If China is able to peg US$, it means the current rate is about correct.
Simple, isn't it?
You just feel the bitterness of the competition from China recent few years, we, those who live in richer coastal areas in China, have dealt with this bitterness long time ago - many of my friends, class mates have lost their jobs to the poor new comers from other part of the country. Fair or unfair? well, nobody born for rich and nobody born for poor, that is fair enough.