Determine the floating exchange rate

Assignment Help Operation Management

Reference no: EM131268853

With the heavy focus on trade with China, it may be surprising to discover that Canada is the USA’s largest trading partner. Perhaps it is not the amount of trade between the US and China that is such a great concern as much as the growth of the trade, the corresponding imbalances and China’s currency valuations.

The yuan renminbi is the official currency of China. It has been historically fixed and controlled by the Chinese government, but that may be changing. As China becomes a greater global exporter and economic powerhouse, critics are claiming that the currency is being undervalued and manipulated in an attempt to protect domestic markets. There are additional levels of complexity impacting China as the nation must deal not only with economic competition, but also internal political and social pressures. As China continues to loosen capital controls, there is fear that the government may lose control of inflation and interest rates, thereby causing a great deal of labor and social unrest, while negatively impacting China’s competitive advantages. There are currently platforms in place to increase the circulation of the yuan, but those platforms are currently limited and severely restricted.

1: China is a leader in international world trade, a major exporter, and currently holds the largest foreign exchange reserve in the world. The nation has one of the highest GDPs in the world, and is increasing its economic power. Is it fair for China to fix its currency by undervaluing it on the market? How does keeping its exchange rate undervalued give it a favorable position in international trade? What about from the viewpoint of consumers?

2: Why is the Chinese government hesitant to open the yuan to market forces to determine its value (floating exchange rate) inside and outside of China?

3: We often talk about manufacturing and goods related trade with China. What information can you find on trade in services between the two countries?

Reference no: EM131268853

Questions Cloud

Describe some of rick federico’s personal leadership traits : Choose three of the leadership managerial roles and explain how Rick Federico might use them as head of P.F. Chang's.

Pieces of information deals with job content : Which of the following pieces of information deals with job content?

Billing function of a company : A bank has recently taken over the billing function of a company. An agreement stipulates that the bank should process 99.2% of the bills within 4 hours.

How language and literacy development is fostered : Imagine that you are asked by a new parent or family member to explain how language and literacy development is fostered in a preschool setting.

Determine the floating exchange rate : With the heavy focus on trade with China, it may be surprising to discover that Canada is the USA’s largest trading partner. Perhaps it is not the amount of trade between the US and China that is such a great concern as much as the growth of the trad..

Managing diversity and inclusion and diversity training : Explain the relationship between “managing diversity and inclusion” and “diversity training.” Which is most effective? Why

Frequent k-mer problem : The most frequent k-mer problem seeks the set of substrings of length k (where integer k is an input) that occur most frequently

Calculate the amount that amy would pay : Amy Koy met Pat Quin on September 8 at Queen Bank. After talking with Pat, Amy decided she would like to consider a $9,000 loan at 10 1/2% to be repaid on February 17 of the next year on exact interest. Calculate the amount that Amy would pay at m..

Create powerpoint presentation describing : Write an MS Word document or create a PowerPoint presentation describing:

User Account

All Pages