Wen Warns Against Renminbi Pressure

With the world’s largest population and concentration of manufacturing, China cannot revalue the renminbi quickly, contends Wen Jiabao, China’s premier. And pressuring China to do so could lead to global economic “disaster” is his assessment as reported by the Financial Times. Currency revaluation would lead to job loss and social unrest with Chinese firms already operating on narrow profit margins and low wages for workers. However, China may not avoid the pain of currency competition, as other nations adopt the philosophy, “If you can’t beat them, join them,” and manipulate to lower the value of their currencies. The analysts of every nation, regardless of governance, ponder global trade and currency intricacies, speculating how any move up or down might contribute to inflation, immigration, employment, unrest or political upheaval. – YaleGlobal