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Donna Kakonge
Donna Kakonge,
Category: Single Problem
Satisfied Customers: 335
Experience:  Owner at Donna Kay Kakonge, MA, ABD
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Should China Be Forced to Alter the Value of Its Currency?

Customer Question

Should China Be Forced to Alter the Value of Its Currency?
COUNTER-POINT: China might counter that its large balance of trade surplus with the U.S. has been due to the differences in prices between the two countries, and that it should not be blamed for the high U.S. prices. It might argue that the U.S. trade deficit can be partially attributed to the very high prices in the U.S., which are necessary to cover the excessive compensation for executives and other employees at U.S. firms. The high prices in the U.S. encourage firms and consumers to purchase goods from China. Even if China’s yuan is revalued upward, this does not necessarily mean that the U.S. firms and consumers will purchase U.S. products. They may shift their purchases from China to purchase products in Indonesia or other low-wage countries rather than buy more products from the U.S. Thus, the underlying dilemma is not China, but any country that has lower costs of production than the U.S.
Submitted: 9 months ago.
Category: Single Problem
Customer: replied 9 months ago.
i just need a brief statement on this point of view. when is the estimated time for delivery?
Expert:  Donna Kakonge replied 9 months ago.

I agree with the counter-point. You cannot have high currency rates that would equal the power of the United States dollar in countries that do not have the same Gross Domestic Product (GDP) as the United States. This is why companies in the United States would reach out to foreign countries that have a lower GDP for labor and for goods.

Kindest regards,

Donna Kakonge, LLB

Customer: replied 9 months ago.
i would have liked to know more about the impact in the US trade deficit, considering that the relative value of yuan to USD is not the main source of the deficit.
Expert:  Donna Kakonge replied 9 months ago.

Dear Customer,

You asked for a brief statement. I gave you a brief statement. For more information on the U.S. trade deficit which you can include for yourself since the price you are quoting is low, here is the information you can source:

https://www.census.gov/foreign-trade/balance/c5700.html

Kindest regards,

Donna Kakonge, ABD

P.S. Please keep in mind that the price you are quoting is low. I understand. You must meet your own budget and I am still responding based on your budget.

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