China’s Monetary Policy Is Fine, No Need for Her Currency to Float

Contrary to the conventions and misguided wisdom, China is wrongly criticized for not allowing her currency to float. This is absolutely misguided and is based on the simple, yet incorrect, assumption that the more Chinese goods cost, the less quantity of them we will buy, and the cheaper our goods are, the more quantity of USA products we can sell. The theory goes that if currencies float freely, trade deficits will decrease, and more Americans will get jobs. Historically, this hasn't worked. Closer examination of the underlying theory explains why. If the Chinese currency floats freely, we will just spend more money for the same amount of goods, further aggravating our balance of trade deficit.

At the theoretical level, it assumes that certain goods are like freely tradeable, completely available commodities like Gold. A bar of gold is a bar of gold, and there is an ample supply if you are willing to pay for it. Chinese goods, like oil, are not similar commodities where market forces will solve all problems. There is a limited supply of oil, regardless of the price. The US is in no position to substitute domestic production of goods for cheaper imported goods, especially those imported from China.

First and foremost, given what we pay and buy for Chinese goods, a price increase will not diminish demand. We will just pay more money for the same things, and thus have less money for others. Why is this? Because imported Chinese goods are not substitutable for USA made goods. Whether a Chinese worker is paid $1,000 US Dollars a month for wages, or $1,200 a month for wages, we still can't compete. Our workers are simply not prepared to work in factories for minimum wage and produce low cost goods.

Out strength lies in higher end, high technology goods, which is the reason we should focus our policies on education and on research into cutting edge technologies and into supporting the later. For example, the airline industry is a perfect example. Since the invention of the airline, until Airbus, only the USA manufactured and produced the largest and most technology advanced aircraft, especially for commercial (non-military) uses.

There are other structural reasons as well. Our economy is structural and not easily changed. Even if the price of goods suddenly shot up, we can't just build factories for low cost substitutes for imported Chinese products.

Imported oil is a perfect example. We need what we need, and we will purchase what we need, as long as we have the money to do so. Being an affluent country, we have many assets. When the price of oil rises, as it has, we do not stop driving or filling our gas tanks. The tremendous rise in the costs of a gallon of gasoline caused us to complain and hurt our wallet, but we have not cut our use of our automobile.

Not allowing their currency to float actually hurts the Chinese. By selling their goods at an artificially low price, they are only throwing away hard currency revenues which would make their country richer and more affluent. Since quantity of exports won't diminish, we would just pay more for each item exported. The Chinese would have more money without losing exports. There mistake is our benefit, and that is a shame. Because we have no one to blame but ourselves and our complacency and laziness. On the other hand, no people have suffered so extensively (much of which suffering was at the hands of foreign powers including the Western countries and their allies) as much as the Chinese for thousands of years, yet are so decent and hardworking and ethical. They have an ancient culture which was prescient and enlightened and very ethical which remains engrained in the lives of the Chinese to this day. They remain poor and suffering, and deserve to have decent lives.\
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公约和误导的智慧相反，中国是错误的批评，不容许她的货币浮动。这绝对是误导和简单，但不正确的假设，即更多的中国商品的成本，他们的数量较少，我们会买，而我们的商品更便宜，更多的美国产品的数量，我们可以卖。理论上，如果货币汇率自由浮动，贸易赤字将减少，而更多的美国人将获得就业机会。从历史上看，这并没有奏效。关于建立更紧密的基本理论的研究解释了为什么。如果中国的货币自由浮动，我们会为相同数量的商品只花更多的钱，进一步加重了我们的贸易赤字。




在理论层面，它假定，某些商品，如自由可交易的，完全可用的商品，如黄金。一个金条是金条，并有充足的供应，如果你愿意为它付出。中国商品，如石油，不类似的商品，市场的力量会解决所有问题。有一个有限的石油供应，不管价格。美国是在任何位置，以更便宜的进口商品，尤其是那些从中国进口的的商品的国内生产。



首先，由于我们的支付和购买中国商品，价格上涨不会减少需求。同样的事情，我们只是将支付更多的钱，从而较少的钱为他人。这是为什么？由于进口中国商品为美国制造的商品替代。无论是中国工人支付$ 1000美元为一个月的工资，或工资每月1200美元，我们还不能竞争。我们的工人根本不准备在工厂上班，最低工资和生产成本低的商品。



出的优势在于较高档次，技术含量高的产品，其中的原因是，我们应该着眼于教育和研究到尖端技术，并支持后，我们的政策。例如，航空业是一个很好的例子。航空公司的发明以来，只有美国，直到空中客车公司，制造和生产规模最大，技术最先进的飞机，特别是商业（非军用）使用，。



以及有其他结构性原因。我们的经济结构，并不会轻易改变。即使商品价格突然飙升，我们不能仅仅建立工厂对进口中国产品的低成本替代品。



进口原油是一个很好的例子。我们需要什么，我们需要，我们会购买我们所需要的，只要我们有足够的金钱这样做。作为一个富裕的国家，我们有很多的资产。当石油价格上升，因为它，我们不会停止驾驶或填写我们的气罐。一加仑汽油的成本的巨大上升引起我们抱怨和伤害我们的钱包，但我们并没有减少我们使用我们的汽车。



允许其货币浮动实际上伤害了中国人。通过人为压低的价格出售他们的商品，他们只能扔掉硬通货收入，这将使自己的国家更丰富，更富裕。由于出口量不会减少，我们将只支付每个导出的项目。中国将有更多的钱，而不会失去出口。有错误是我们的利益，这是一种耻辱。因为我们已经没有人指责，但我们自己和我们的自满和懒惰。另一方面，没有人遭受如此广泛千百年来中国人之多（其中很大的痛苦，在外国列强手中，包括西方国家和他们的盟友），但如此体面和勤劳和道德。他们有一个古老的文化，这是有先见之明和开明和非常道德，这在中国人这一天的生活仍然根深蒂固。他们仍然贫穷和苦难，并配有体面的生活。