Recently, subject to the continuing weak U.S. economy and the approaching mid-term election political pressure, the RMB exchange rate issue has again become the focus of international attention. China Foreign Exchange Trade Center’s latest data show that on Sept. 21 reported that the central parity of RMB against the U.S. dollar 6.6997, 113 basis points higher than the previous day. At this point, the central parity of RMB against the U.S. dollar has hit a new high for eight consecutive trading days, the appreciation rate has exceeded 1.5%.

Concern that the United States President Barack Obama’s position that the RMB exchange rate issue from escalating further. Obama said that the yuan is undervalued, this “does not meet the actual market situation and allow China to gain a competitive advantage in bilateral trade.” Given China’s economic growth, people get rich, increased exports, China should let its currency appreciate, and make adjustments based on market conditions. He also said that in order to establish more equitable trade relations, the U.S. government will take on China before the WTO for more sanctions measures.

Clearly, the American politicians and the RMB exchange rate compared to national economic recovery a bit far-fetched, it seems that “ulterior motives.” This time the United States in terms of the RMB exchange rate game, the surface is the result of bilateral trade friction is also reflected in U.S. election politics, but American society reflected back against free trade and globalization tendencies.

We see that since the global financial crisis, although the United States implemented a huge economic stimulus plan, and launch of new energy sources for the development of a series of economic measures to promote employment, but the jobless recovery of the economic situation, making the United States “to Leverage “of course, employment was extremely prominent. According to the U.S. Labor Department report showed U.S. job market is not only weak, and serious regional differentiation. Only 14 U.S. states in August non-farm employment has gone up, including the District of Columbia and 36 states, including the decline, in which the highest decline in Michigan, that the U.S. job market will need more time to be from 20 Century 30’s worst recession since the rebound cycle. While China’s exports rely on a strong competitive edge and become the biggest beneficiary of globalization. Based on this, some U.S. officials and members of Congress attempt to sluggish U.S. economy, the RMB exchange rate as a “scapegoat.”

Currently, the U.S. hopes to expand trade structure by changing jobs, but the reality is that the U.S. dollar as global reserve currency, in order to maintain global economic growth, the U.S. trade deficit is bound to the state in the long term. In this international monetary system, American politicians and trade unions against the deficit in the name of, the implementation of the “go global” process, but also about domestic politics in order to meet the needs of not solve the deficit problem.

In fact, the RMB should not appreciate the two countries depends crucially on the economic strength and productivity changes. At present, China faces complicated economic situation, various contradictions and problems are intertwined and impact, so the matter will certainly appreciate the honor and slow. Moreover, the pace of renminbi appreciation has not stopped – in June this year China announced exchange rate reform, the RMB has risen 1.53%. So, even if the RMB appreciation, and difficult to alleviate the deep contradictions in the U.S. economy. Significantly reduce China’s exports to the U.S., other countries will soon replace China as the new exporters, the Americans changed the employment situation through trade efforts will be futile. As the World Bank President Robert Zoellick said recently that the yuan appreciation is appropriate, but not a panacea to solve economic imbalances and structural problems is the fundamental problem.

All in all, in the current complicated situation of economic recovery, the RMB exchange rate will inevitably be more and more pressure, but also more and more difficult to execute. However, if a significant appreciation of both China and for global economic development is not a good idea. On the current terms of expanding within a certain range of RMB fluctuations may be a more feasible way.

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