Is It Necessary to Separate Retail Banking from Investment Banking? Discuss Possible Advantages and Disadvantages of Such a Separation Using Academic Literature
Disadvantage of increase Chinese Exchange for China - International Trade
Why USA want to increase Chinese Exchange Rate
As we all know, China is a big processing and export country, we can see many products all be made in China. Therefore, when the Chinese exchange rate increased, the demand of Chinese product for American companies and residents will be reduced, because the Chinese exchange rate increase, the cost of Chinese products will be increased at the same time, so they have to expend more dollars for Chinese products. The competition of Chinese products will be decreased in American market.
For example, the price of one Chinese phone is 100 RMB that be exported to America with 8.264 …show more content…
Disadvantage of increase Chinese Exchange for China
With the higher import and lower export, the employment question in China will become more grave. Because the Chinese exchange increase, Chinese Economise Growth tendency will become slow, and labour market excess supply cause the increase of competition of job and the reduce of employment rate.
What happen if China lost control for the increase of exchange
Japan can be a good example. Now, Chinese status is similar with Japan in about early 80’s, because they are the biggest creditor countries for USA. Duo to the stress from USA and signed on Plaza Accord, the value of Japanese currency increased rapidly and the peak of japanese currency at 1 dollar only can get 79 yen in April 1995. After the increased of Japanese currency, Japanese government did not effectively controlled the tendency of increase, and Japanese economy was became an economic bubble, and also economic depression for more than 10 years. Therefore, China should control the increase of exchange rate,