China's Currency Not Costing U.S. Jobs

[ze_dscherman]

WASHINGTON (Reuters) - China's currency peg to the dollar puts its economy at risk of overheating, Federal Reserve chief Alan Greenspan said on Thursday, while dismissing U.S. manufacturer charges that the tie has cost America jobs.

"A rise in the value of the renminbi would be unlikely to have much, if any, effect on aggregate employment in the United States, but a misaligned Chinese currency, if that is indeed the case, could have adverse effects on the global financial market and, hence, indirectly on U.S. output and jobs," Greenspan told the World Affairs Council of Greater Dallas.

SNIP

However, Greenspan argued any decrease in Chinese imports into the United States from a stronger yuan would likely be offset by a pick-up in imports from other low-wage countries.

He said while Chinese exports to the United States had risen, that gain had come at the expense of other East Asian exporters. The U.S. trade gap with China hit a record $103 billion in 2002 and is expected to top $120 billion this year.

More: http://news.reuters.com/newsArticle.jhtml?type=businessNews&storyID=3979222

[54anickel]

1. Check out what else Greenman had to say about us UE folks

in this article. This is not a good sign. These folks are way out of touch with reality, once again. I don't know about anyone else that's unemployed, but I was in the IT industry. I get so tired of people saying the UE made poor career decisions and need retraining. Especially in manufacturing. The SO became a machinist 30 years ago working for a company that his grandfather, father and uncles retired from. High skills, good pay, good pension, etc. Things are moving so fast now that ANY career choice will be a bad one before your working days are over (except for upper management).
This SUCKS!

http://www.chron.com/cs/CDA/ssistory.mpl/business/2289202

Greenspan, addressing the World Affairs Council of Dallas, acknowledged that "in recent years, competition from abroad has risen to a point at which our lowest-skilled workers are being priced out of the global labor market."

But the answer, he said, is education and retraining, not protectionism or adopting the position of antiglobalization forces that favor "employing the power of the state to override the outcomes arrived at through voluntary exchange."
------------------------------------------------

He also seems to be going against Snow on this:

http://news.bbc.co.uk/1/hi/business/3311843.stm

Earlier this year, US Treasury Secretary John Snow expressed the US Government's concern that the yuan may be dangerously undervalued.

US manufacturers have argued the yuan could be undervalued by as much as 40%.

Last year, the US trade deficit with China was $103bn and it is estimated to be more than $120bn this year.

[Kolesar]

2. What is "the renminbi "? eom

[ze_dscherman]

3. Renminbi = Chinese Currency

http://www.chinatoday.com/fin/mon/

[54anickel]

4. China's currency, pegged to dollar at 8.2:1 ratio according to this

http://www.gold-eagle.com/gold_digest_03/petch111403.html

The US allows their currency to float (although intervention has occurred until the decline since 120) and the Chinese Renimbi is pegged to the US dollar at around 8.2:1. Quoting Ernest H Pregg (Manufacturers Alliance/MAPI, October 2, 2002) "In the case of China, the renimbi is fixed to the dollar, but is non-convertible on capital account.

[54anickel]

5. Question for the economics gurus........

Would it not be in the best interest of self preservation if US consumers avoided buying "made in China" whenever possible?
That and Wally World for obvious reasons.

I've bought stuff from Sweat-X, try to find stuff made in USA, or anywhere but China. Would this help our problem or make it worse down the road?

I'd rather pay a bit more now than see our economy go down the crapper making ALL my dollars worthless to anyone, excepting for the neighbors goat.

[rman]

6. so what? US outsourcing to China is what's costing US jobs

amongst other causes.